From power to post and coal to comms: meet the minister for nearly everything

Stephen Timms talks to Clayton Hirst about nuclear fallout, electricity blackouts, and the Royal Mail maelstrom
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The Independent Online

British Nuclear Fuels Limited: £1.09bn loss; future - bleak. British Energy: £4bn Government-led bailout; future - critical. Royal Mail: £611m loss; future - uncertain. UK coal industry: 15,000 potential job losses, future - on a knife edge.

If politics is all about the intoxication of power, then Stephen Timms should be as high as a kite. But the minister with the unfeasibly long job title - for energy, postal services and e-commerce - appears unaffected by the power he wields in overseeing the turnaround of this list of British business failures.

Promoted in the badly managed summer reshuffle, the then plain old post and e-commerce minister was given the contentious energy brief vacated by Brian Wilson. Timms, a devout Christian, comes across - in public at least - as a politician more interested in getting his head round the nuances of nuclear liabilities than playing party politics in the Westminster village. "It's a great brief, yeah; there's a lot going on; never a dull moment," says Timms, who confesses that his promotion came as a surprise.

Sitting in his now slightly larger office, with a view of Westminster Abbey, the minister has an imposing report on his desk. It is covered with Post-it notes filled with acronyms - NGT, NDA, BNFL - and these are pointers to the enormous tasks facing the minister.

NGT probably refers to last week's report by National Grid Transco and regulator Ofgem on the state of the electricity market. Showing that Britain has a safety cushion of less than 20 per cent of supply over demand - in other words, a relatively narrow margin if power use surges - the report was greeted with panic and relief depending on who was doing the reading. The doom merchants focused on the falling margin. But Timms believes that the gap means that the lights are unlikely to go out this winter and he dismisses claims that the country's privatised electricity market is "bust".

"I don't want to sound complacent about this at all - we have had serious problems with the transmission in London and I don't think anyone should take it for granted that everything is fine - but the evidence I've seen points to the system working as it is supposed to do," he says.

The minister is, however, in the process of radically restructuring the UK's energy industry. He has day-to-day responsibility for the rescue of British Energy, which is now in the hands of the European Commission. He is also setting up the Nuclear Decommissioning Authority (NDA) to assume the country's £48bn of nuclear power liabilities. Expected to be included in next month's Queen's Speech, the NDA will take on some waste liabilities from British Nuclear Fuels Limited (BNFL), the troubled state-owned company.

Asked if he thinks BNFL has a future, Timms says: "Yes I do. I think there is a long-term future." In a further sign that BNFL may live to reprocess another rod of spent fuel, the minister is due to meet Japanese government officials next month and is expected to urge them to buy Mox fuel from BNFL. This follows the scandal in 1999 when quality-assurance documents relating to a shipment to Japan were found to be falsified.

Timms says the wider nuclear question - whether Britain will ever contemplate building new nuclear power stations, something that was dodged in the recent Energy White Paper - won't be addressed for years. Instead, he wants to give renewable energy a head start.

"A decision will be taken on whether or not we need new nuclear capacity. There was a line of argument that it should have been addressed in the White Paper, but in practical terms it was not the right time," says Timms.

So when will be the right time? "When we know whether we have hit the 10 per cent renewables target [by 2010]."

The minister also wants Britain, by 2050, to have cut its carbon emissions by 60 per cent. This week his boss, the Trade and Industry Secretary, Patricia Hewitt, along with the Environment Secretary, Margaret Beckett, and the Deputy Prime Minister, John Prescott, will host a summit to encourage the construction industry to build more environmentally sustainable properties.

Timms believes that householders also need incentives to think green. During the summer the Treasury quietly published a paper which ruled out providing certain tax breaks to promote energy efficiency. It is understood that Timms, himself a former Treasury minister, had pressed for a reduction in stamp duty on fuel-efficient homes. "The fact that a particular measure was ruled out doesn't worry me," he says. "What we need - on the part of the Treasury as well - is a willingness to contemplate some quite significant means over time of a fiscal character."

As Timms pushes the low-carbon energy agenda, the coal industry is starting to feel the heat. Within the next four weeks Timms and his colleagues at the Department for Environment, Food and Rural Affairs must make a decision that could have a profound effect on the industry: how to implement a European directive to cut sulphur dioxide emissions.

The Government has two options: force power stations to buy coal with a lower sulphur content from foreign suppliers; or fit special sulphur filters to generators.

UK Coal, Britain's largest mining company, has warned that if the first option is taken it would wipe out the country's pits, costing 15,000 jobs and £700m a year to the economy. The company's chairman, David Jones, recently met Timms to make the case for filters, and a group of MPs with coal fields in their constituencies have also lobbied Tony Blair.

Timms refuses to say if the coal industry will be spared. "A decision hasn't been made. We certainly need to take full account of what the industry is saying, but also of what others are saying. There are issues for the aluminium and steel industry too."

He says one of the reasons he was given the energy brief was the good progress made in postal services and e-commerce. The state-owned Royal Mail, under the chairmanship of Allan Leighton, has begun to reduce its losses but is still blighted by vicious rows with its regulator, Postcomm. The latest dispute centres on how much money Royal Mail can charge rivals to gain access to its distribution network. Mr Leighton claims the company's restructuring plans will be undermined by Postcomm's proposals and has said that Royal Mail is prepared to go to the courts over the matter. The regulator has so far stood firm.

Timms refuses to intervene in the dispute: "I am certainly not saying to Postcomm, 'back off'. I want an agreement that Postcomm and Royal Mail reach together. There are certainly some tough challenges, but I think that Postcomm is doing a good job."

It must be a relief to Timms that at least one of his areas of responsibility - e-commerce - doesn't involve restricting a loss-making monolith. Instead, however, the sector is dogged by accusations that BT, a profit-making monolith, is stifling competition. Alternative telecoms companies - such as Cable & Wireless, Kingston Communications and Energis - believe the problem is that BT is in effect two companies in one. It provides retail services to customers and it is a wholesale supplier of telecoms services through its wire network. The problem comes when BT retail is also a customer of BT wholesale, prompting accusations of favourable deals - something the company denies.

"There are some entirely legitimate concerns that the alternative carriers are raising," says Timms. "There are particular instances where undoubtedly a very firm regulatory stand needs to be taken."

Nevertheless, the minister believes that the new multimedia regulator, Ofcom, which will come into effect on 29 December, must address telecoms competition as a priority.

Ofcom, he says, "will bring a fresh look at these questions. David Currie [the regulator's chairman] has got a very distinguished record and [in the past] has expressed views quite similar to those made by the alternative carriers".

One solution proposed by some competing telecoms companies is to break up BT. "This is often suggested as a panacea - to take away the local network from BT," says Timms. "I would not rule that out for a moment, but I think the complexity in doing it - effectively tying up the whole comms industry for several years - is a big downside that should be factored into the equation. Ofcom will need to take a view on that."

With responsibility for three fiercely independent regulators, four companies on their uppers and one dominant company on the up, Timms is undoubtedly one of the Government's most overworked ministers. Critics have claimed that, while he is regarded as competent and a safe pair of hands, the job is too big for one man.

If he proves his critics wrong, then who knows what extra responsibilities will be heaped on him come the next reshuffle?