Rishi Sunak has established a Department for Energy Security and Net Zero as part of his first cabinet reshuffle.
The UK Prime Minister appointed Grant Shapps to oversee the new Whitehall office which will be responsible for securing the country's future energy supply and transitioning from fossil fuels to renewables.
No 10 Downing Street said the establishment of the department recognises “the need to secure more energy from domestic nuclear and renewable sources as we seize the opportunities of net zero”.
It is one of four new or redesigned government departments set up by the Sunak administration.
As part of his reshuffle just over 100 days into his time in No 10, Mr Sunak appointed Greg Hands as chairman of the Conservative Party and Minister without Portfolio.
He replaces Nadhim Zahawi who was sacked last week for breaching the ministerial code regarding his tax affairs.
Responding to his new appointment, Mr Shapps tweeted: “Delighted to become the first Secretary of State for the new Department for Energy Security & Net Zero. My focus will be securing our long-term energy supply, bringing down bills and thereby helping to halve inflation.”
Kemi Badenoch, former trade secretary, has been given the new title of Secretary for Business and Trade as part of the merging of the two departments. She will retain responsibility for trade negotiations, including the prospect of a UK-GCC free-trade agreement.
A dedicated Department for Science, Innovation and Technology will be overseen by Michelle Donelan in an effort to “drive the innovation that will deliver improved public services, create new and better-paid jobs and grow the economy", No 10 said. George Freeman was named as a minister in the department.
Lucy Frazer has been appointed Secretary for Culture, Media and Sport to oversee a department that previously included the digital agenda. Graham Stuart has been named as a minister in the department. His previous title was minister for energy and climate at the Department for Business, Energy and Industrial Strategy (BEIS).
Nusrat Ghani, who has previously claimed the Tory Party is institutionally Islamophobic, has been given the roles of Minister of State jointly in the Department for Business and Trade and the Cabinet Office. She previously served as minister for industry and investment security at BEIS.
During the Conservative leadership race last summer, Mr Sunak pledged to re-establish a stand-alone Department for Energy to secure the UK’s future power supply.
Energy security has been drawn into focus across Europe and the wider world since Russia’s invasion of Ukraine.
In a message posted on Twitter, Mr Sunak said: "The Department for Energy Security and Net Zero will focus on giving the UK cheaper, cleaner, more secure sources of energy — cutting bills, cutting emissions, and cutting our dependence on international energy supplies, like those of Putin’s Russia."
He said the creation of new departments would help focus on issues that are important to the British people and "build a better future for our children and grandchildren".
No 10 said the issues of net zero and energy security were closely linked.
Asked if the creation of the new department would signal greater prioritisation of reaching the zero emissions target, the Prime Minister’s official spokesman said: “I think the public will judge us by our actions and our continued approach on net zero.
“We do think it’s right to more clearly pull out the government’s focus on that linkage to long-term energy security because the two very much go together.
“Seeking to achieve net zero is, in part, obviously about the importance of keeping 1.5°C alive, but equally it’s about making sure we have energy security, whether that’s offshore wind or nuclear.”
He said the creation of the new departments was not expected to incur additional costs. They are expected to be up and running from Tuesday, he added.
The Liberal Democrats claimed the reshuffle would cost £60 million.
Party spokeswoman Christine Jardine said Mr Sunak's “rudderless reshuffle” added weight to the claim he was “looking weaker by the day”.
“This reshuffle will cost the public millions while failing to change the trajectory of this government in crisis,” she said. “Rather than fritter away tens of millions of taxpayers’ cash on costly vanity projects, Sunak should spend the money where it’s most needed. This cash could fund 25 million free school meals.”
Mr Hands took to Twitter to post a photo of himself and the Prime Minister to celebrate his new role. He said he was “excited” to chair the Conservative Party after joining in 1986, and called his new position “an honour”.
“The work starts right away,” he wrote.
Lee Anderson was appointed deputy party chairman.
Lisa Fischer, an energy expert at climate-change think tank E3G, said the creation of an energy department with a transition focus could harness change.
“A separate energy department if linked with climate can give useful prominence and focus to the energy transition,” she said.
Sam Richard, founder and chief executive of Britain Remade, a pro-growth campaign group, said the creation of the Department for Energy Security and Net Zero was "broadly pointless — unless the government is willing to overhaul the planning system at the same time".
"You can’t make the UK energy secure — or hit our net-zero targets — when it takes up to 13 years to build a new wind farm," Mr Richard added. "Only by reforming our broken planning system can we deliver the clean energy Britain needs and secure the thousands of well-paid jobs across the country that come from speeding up building new clean energy infrastructure.”
The reshuffle came hours after oil giant BP announced profits had hit record highs as the company benefitted from runaway energy prices caused by the war in Ukraine.
Last year BP’s profits more than doubled to £23 billion ($27.56 billion).
The company also said it had scaled back emissions reduction targets by a third, and would produce much more oil and gas by the end of the decade than previously thought.
Taxes on Britain’s oil and gas sector sit at 75 per cent — among the highest in the world.
Asked if the Prime Minister would consider increasing taxes on energy companies, his spokesman suggested there would be no change.
“We think we are striking the balance on [offering] cost-of-living support for families and businesses, whilst encouraging investment in the North Sea to boost things like the UK’s energy security,” the spokesman said on Tuesday.
Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
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Brief scoreline:
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
