Green energy: despite talks of a coalition bust-up, wind farm subsidies are …

January 14, 2014 by  
Filed under Green Energy News

Wind farms: here to stay, whatever Dave says (Photo: AFP/Getty)

Voters could be forgiven for being puzzled about what the Prime Minister’s real position is on climate change and renewable energy. He came to office in 2010 promising the greenest government ever, having won the Tory leadership in 2005 telling the electorate that it should “Vote blue and go green”. Then by late last year he was – in the words of a senior Tory – telling staff that he was now focused on getting rid of “all this green crap”. This delighted climate change sceptics on the Tory benches, although the Lib Dem leader Nick Clegg said it was not an accurate representation of the Prime Minister’s views. The possibility remains that Mr Cameron says one thing in the presence of the Deputy Prime Minister, and quite another (the very thought!) to Tory ministers and advisers, who want the Government to reduce the subsidies paid for renewable energy, in order to concentrate on reducing the tax burden and boost the economy.

But now, as of last week, the Tory leader is back talking about climate change. After the storms and widespread flooding in parts of the country in recent weeks, climate change activists have attempted to put the subject back on the agenda. Last week the Prime Minister said in the Commons that he suspected climate change was responsible for the storms. “I think it was just one of those moments when he was put on the spot at Prime Minister’s Questions, felt he had to say it and probably went a bit further than he meant to,” a minister told me.

Scientists welcomed Mr Cameron’s comments, although the Met Office acknowledged that it is not possible to blame one specific weather event on man-made climate change. After the Prime Minister’s remark there was some signs of unease on the part of Tory MPs. “It’s back to green crap again – I do wish we’d make our minds up,” said one.

But it is highly unlikely there will be a shift back. It would cause a Tory revolt. Conservative ministers are pleased that they managed to move government policy somewhat towards the end of last year, following a sustained campaign at Westminster and in Whitehall. In his Autumn Statement in December, the Chancellor announced a cut in the Energy Companies Obligation (ECO), a scheme which funds the insulation of homes.

Although the concessions won from the pro-green Lib Dems were limited, and most of the other green obligations adding to energy bills remain, it was a shift that allowed the Tories to say they are prioritising cutting bills rather than anti-climate change measures. While they were keen to respond to Ed Miliband’s offer of a price freeze, made in his party conference speech, what really drove the Tory change of direction was the electoral reality that, since the financial crisis and the recession dramatically transformed priorities, there are few votes in green issues. Another minister says: “No voter has ever mentioned climate change to me. People are interested in the economy and what is happening to their bills.”

Despite all that, most of the green subsidies stay. While the Tory rhetoric has toughened to some degree, and there have been minor adjustments in policy, the thrust of government action remains relentless. The drive to impose high and rising energy costs on business continues, as the UK races to meet its international obligations, signed up to by successive governments. By 2050 greenhouse gas emissions are to be cut by 80 per cent, compared with 1990 levels. And the EU demands that Britain must eventually produce 15 per cent of its energy needs from renewables such as wind power.

To achieve this aim, the hard-pressed taxpayer subsidises the wind farm industry, although there have been some reductions announced in the scale of future financial support. There is little room for manoeuvre on any of this, as long as the Coalition is in place and the Lib Dems remain in government. Nick Clegg would not let the Tories go further on reducing eco-subsidies, even if the Prime Minister had an appetite for change. If a Lib-Lab coalition emerges after the next election, in the event of a hung parliament, do not expect Ed Miliband or Nick Clegg to concede any watering down of the green agenda.

I mention all this because in recent months the green energy fandango has offered observers a classic of the coalition genre. Lots of ambitious rhetoric about getting tough, talk of a big coalition bust-up, a tweak of taxes here and there and in the end the policy stays, basically, the same.

More by Iain Martin:
• Nick Clegg thinks he’s back in business
• Immigration is set to give Nigel Farage a boost
• Booming London is becoming a separate country

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