ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: Now then in June this year I was due to interview the Chair of the Energy Select Committee Tim Yeo, but a short time before the show was due to start, Mr Yeo had to pull out. The Sunday Times had published a story that morning accusing the MP of breaking lobbying rules. He has now been cleared of any wrongdoing by the Parliamentary Commissioner for Standards and I’m delighted to say that he joins me now. Welcome to you, Mr Yeo, a few months late. You’ve been cleared, you were convinced as you said at the time of your innocence on the allegations that were made against you, why didn’t you turn up?

TIM YEO: Well it was a very unpleasant surprise to me to find a lot of things that were not true in one of the Sunday papers and I thought that there wasn’t much merit in giving that story more credence at the time. I’m very pleased now after an examination lasting over five months, that the Parliamentary Standards Committee has completely exonerated me of all the charges made by the Sunday Times.

DM: And they said, and you said, you were in a sense entrapped by the journalists. If you felt that, why did you go that route? Why didn’t you go to the Press Complaints Commission?

TIM YEO: I thought it was important that parliament itself, which sets very rigorous standards for what MPs can do, should have the chance to examine this in great detail – which they have – and I think that’s the verdict on which I’m happy to rely. That document is now a public document, accessible online and I welcome the fact that it has been published. I look forward very much on Tuesday to chairing the next meeting of the Energy and Climate Change Select Committee.

DM: The last question on it, and again you said you were quoted out of context but some of the quotes were in full and this is the key one isn’t it, when you said to the undercover reporters, “If you want to meet the right people I can facilitate all those introductions and I use the knowledge I get from what is quite an active network of connections” and you went on to say that included government ministers. I mean you did say that?

TIM YEO: Well I am very disappointed that you’ve chosen to do exactly what the Sunday Times did …

DM: Well is that selective?

TIM YEO: … which is to take one sentence out of a conversation lasting an hour and a half. The Parliamentary Standards Committee has looked at the whole conversation and they’ve concluded that the only misrepresentation that took place was that of the journalists themselves so I hope you will be very careful about …I’m telling you that the people who have taken the trouble to look at more than one sentence have concluded that I broke no rules, that my conduct did not in any way contravene any of the House rules and that the only people who made any misrepresentation in this case were the journalists themselves. I hope very much that Sky News are not going to fall into the same trap.

DM: No indeed but we have got that quotation, as I say. Did you say that in a different context but in the order of those words?

TIM YEO: I invite your viewers to access the full report online and they can see the conclusion which was reached which was that I was totally exonerated.

DM: Okay, let’s move on then to you being back in the chair there and you have got an awful lot of important work to do with this issue of energy prices. Do you agree with Labour about the idea, given that you are going to be talking to the regulator, Ofgem, that in a way the market doesn’t work, it does need to be reset?

TIM YEO: Well of course there is legitimate concern about the way in which energy bills are going up, they are a real burden for many families now. They constitute a bigger proportion of household spending than they’ve ever done before. I believe that the regulator needs to be much more rigorous. I think we’ve not seen sufficient competition amongst the Big Six companies, they are now what we call vertically integrated, they are both generators of electricity and suppliers. That’s not how the industry was privatised and there is a good case for saying that we should go back to the old system.

DM: But what happened? The seeds are in privatisation, it was botched wasn’t it?

TIM YEO: No, it wasn’t. At that time companies could either generate electricity or they could supply it. Now you and I buy our electricity from the supplier, if that supplier is not also a generator that supplier has an interest in trying to buy the electricity from a generator as cheaply as possible for the benefit of the consumers. We’ve allowed, under both governments, we’ve allowed vertical integration to take place so that’s an issue that needs to be addressed. The other issue which needs to be addressed is that one fifth of your electricity bill comes from what we call the transmission and distribution costs, that’s getting the electricity from the power station to the local network and then to your home. Now those services are provided by monopolies. National Grid do the transmission, the local power networks do the distribution. I believe that Ofgem should now direct its attention at those elements in the cost, one fifth of the total bill, we need to be far more rigorous about the way in which we regulate monopoly suppliers.

DM: Another element in the bill of course, something attributed to the Prime Minister, the ‘green crap’, the environmental levies. Do you as a Conservative think that’s something you should look at to lighten the burden on consumers?

TIM YEO: Well firstly, I’ve never heard the Prime Minister use that phrase so I’m not sure where it actually originates.

DM: You don’t think he would have said that?

TIM YEO: I don't think he would, no. Secondly, I think it is perfectly right to look at all aspects of the bill. The green levies account for about one tenth of it, half of that which is in the distribution and transmission. If there was a way of, for example, moving the cost of what we call the ECO, the Energy Company Obligation, which is designed to promote energy efficiency investment which is very important, if we could shift that from consumer bills on to the taxpayer, that is something worth considering but the truth is that actually the real emphasis should go onto trying to make the competition in the market work better than it does and to make sure that we bear down on the charges levied by the Monopolies.

DM: But it’s interesting on what you say there, I mean there are two questions that flow from that, on those levies, that they should go into general taxation. How much would that cost the tax payer? Have you computed how many extra billions that would be?

TIM YEO: No and one of the reasons why I don't think this is a tremendously fruitful area is that actually taxpayers and electricity consumers are for the most part the same people so it is moving it from one pot to another.

DM: Well indeed but it is spreading it more broadly.

TIM YEO: Slightly more broadly and slightly less regressively because obviously electricity bills are particularly burdensome for low income families but I don't think there is a huge gain from this, that’s why my committee has not done much work on it. We think there are other priorities including the ones we’ll be taking up with Ofgem when we meet on Tuesday.

DM: But there are those that are saying, some of them in your own party, saying hold on, this whole thing about climate change has been overdone and the fact is, well let’s not get into the scientific data but there are some quotations saying well, global warming hasn’t been increasing in recent years and I don’t want to get into that but they are saying in actual fact it is not about who pays for these levies but that they just shouldn’t be there, they’re unnecessary.

TIM YEO: Well I’m very glad to say that David Cameron is not one of those people.

DM: No, but there are others, Lord Lawson and plenty of others.

TIM YEO: Only last week David Cameron said that we should take the science more seriously. When you think there is a risk that your house might burn down, that is not the time when you stop paying …

DM: But to take the science more seriously, do we put up these tariffs, do we really go for those?

TIM YEO: Well I believe that the countries that are now taking this more seriously are the two biggest economies in the world, the United States and China are now accelerating their programme of low carbon investment. Britain should be doing the same thing, by whatever means. I am very pleased we are going ahead with a nuclear power station, that’s a good move. I’m very pleased that we are sticking to our priority on energy efficiency, we should increase that even more because if we can make the use of energy more efficient that’s the best way of saving money, saving energy and addressing climate change.

DM: Okay, well Tim Yeo, good to see you in the studio in the end. Better late than never! Thank you very much indeed for your time. Tim Yeo there, Chair of the Energy Select Committee once again.