Yet again the prime minister’s credibility is under attack from his chancellor – this time it’s over the direction of UK energy policy and David Cameron’s pledge to lead the greenest government ever.
But it’s also about growth in the economy, where it’s likely to come from, and how ideological politics from Osborne are putting a green-tinted, low-carbon recovery under threat.
On the face of it, today’s announced cuts in wind subsidies by 10 per cent – instead of the 25 per cent pushed for by the chancellor – is a victory for energy and climate secretary Ed Davey and the development of a low carbon economy.
While the modest subsidy cut is certainly good news – and reflects the falling costs of renewable technologies – the sting in the tail is a disturbing concession by the energy secretary that gas will continue to play an important part in the energy mix beyond 2030.
This statement threatens to completely undermine Mr Davey’s more positive push on renewables.
Back in April, David Cameron highlighted the challenges facing UK’s energy future saying:
“One of the most important of all is how we meet our growing energy demands in a way that protects our planet for our children and grandchildren.”
But the PM’s responsible, careful framing is steadily being undone by George Osborne – wielding his right-wing wrecking ball. The Chancellor favours a new generation of gas-fired power stations and a continued reliance on fossil fuels for decades to come.
Such an approach would drive a coach and horses through the UK’s legally-binding climate targets, steered through the Commons in 2008 by Ed Miliband. The government’s own climate committee – also formed by the Climate Change Act – have warned that the UK’s electricity market should be largely decarbonised by 2030 to enable the UK to meet its climate requirements.
A clean energy future isn’t just good for the planet. It’s good for UK business too; we have an overwhelming abundance of free, natural energy on and around our islands – and exploiting is getting cheaper.
• The government has no ambition on carbon reporting 21 Jun 2012
Earlier this month the CBI took the chancellor to task over his failure to boost the huge financial opportunities a low-carbon economy will bring. Its director-general John Cridland warned:
“The so-called ‘choice’ between going green or going for growth is a false one. We are increasingly hearing that politicians are for one or the other, when in reality, with the right policies in place, green business will be a major pillar of our future growth.”
While the UK economy as a whole has contracted in recent months, the green economy is growing at more than four per cent per year.
Investing in the UK’s huge clean energy potential will create hundreds of thousands of new jobs and stimulate regions of the country where work is currently in short supply, such as the north east and south west.
A low carbon energy system will also help wean the economy off of increasingly expensive, imports of fossil fuels. The main reason cash-strapped households have been struggling with increasing energy bills is largely down to soaring gas prices; already energy companies have warned of more gas price hikes this winter.
The Energy Bill, shortly to go through Parliament, will set out the framework for the UK’s future electricity system for decades to come – and will have important economic and environmental repercussions for future generations.
It’s time for the prime minister to show his true colours – and insist on a gas-free, carbon-light, 21st century electricity system by 2030.