Bloomberg News

Cameron Urged to Heal Rift Over U.K. Green Growth Plan

November 19, 2012

U.K. lawmakers joined the WWF environmental pressure group in pressing Prime Minister David Cameron to heal a rift in the government that’s holding up proposals to reform the energy market.

The House of Commons Environmental Audit Committee urged Chancellor of the Exchequer George Osborne to spell out plans in his autumn statement to Parliament on Dec. 5 for Britain to achieve its carbon-reduction targets. Osborne should consider a tax incentive to clean up power generation and consumption, the cross-party panel said in a report published in London today.

“The Treasury must end the uncertainty on energy policy and give investors and businesses the confidence to seize the enormous opportunities presented by new clean technologies,” the panel’s chairwoman, Joan Walley from the opposition Labour Party, said in a statement.

The split in the coalition government over support for low- carbon energy has pushed back publication of the Energy Bill, which is designed to spur 110 billion pounds ($175 billion) of new power plants and grid upgrades. Sticking points include a target to cut power sector emissions opposed by the Treasury because it doesn’t match Chancellor George Osborne’s preference for gas plants. Liberal Democrat Ed Davey, who leads the Energy Department, said he supports such a target.

‘At Odds’

“Investors are seeing a government and a party at odds with itself,” said Samantha Smith, leader of WWF’s Global Climate and Energy Initiative. Smith accompanied Cameron when he was the opposition leader on a 2006 trip to observe climate impacts in the Norwegian Arctic. Photos including Cameron with husky dogs helped recasting the party’s reputation on the environment.

The coalition government has sent mixed signals about the pace of boosting renewables as part of the U.K. energy supply. John Hayes, a junior energy minister from Cameron’s Conservative Party, said last month that enough wind turbines have already been erected and that should be the “end of story.” Davey says there’s no change in the policy to encourage wind. WWF said Cameron is breaking his own pledges.

“They promised us the greenest government ever. I believed him. He was very convincing. What we’re seeing is actually not that kind of leadership,” Smith said by phone.

Hayes calling for a moratorium on new wind turbines “added an impression of inconsistency in environmental policy making,” the lawmakers said in their report.

Company Pressure

Companies including Siemens AG (SIE) and Areva SA (AREVA) said Oct. 8 suggestions the U.K. will change policy on clean power threatened “stranding” their investments. Vestas Wind Systems A/S (VWS) shelved plans for a factory in southeast England on lack of clarity for subsidy programs.

The panel also backed Davey in calling for a 2030 decarbonization target in the Energy Bill. A spokeswoman for the Department of Energy and Climate Change said today by phone that government still plans to introduce the Energy Bill in Parliament in November.

Lawmakers said today they’d heard suggestions that Osborne should consider introducing an incinerator tax to encourage recycling, taxing the use of plastic bags in supermarkets and providing local tax rebates for energy-efficient homes.

To contact the reporters on this story: Gonzalo Vina in London at gvina@bloomberg.net; Sally Bakewell in London at sbakewell1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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