Osborne's Spending Review is a huge environmental setback

By Simon Barrow
November 26, 2015

There was a time (2006, in case we had forgotten) when then opposition leader, now Prime Minister, David Cameron was keen to be photographed with huskies on an environmental research trip to Norway, and to proclaim that his party would lead “the greenest government ever”.

The reality has been something quite different. The day before the COP21 (Conference of Partners) Paris climate talks start to get underway, under the auspices of the UN Framework on Climate Change (UNFCCC), Chancellor George Osborne used his Autumn Statement on the UK government budget to cut support Britain’s renewables sector, hit domestic heat conservation, and undermine a massive carbon capture venture.

 In addition, in an under-publicised allied move, the UK Department of Energy and Climate Change (DECC) has slashed its forecasts for new renewable power capacity by more than a third over the coming decade.

 You would have thought that this incredible divestment from the fabric of a sustainable, non-carbon future would have made headlines. Not least at a time when the World Meteorological Organisation (WMO) has just announced the “bad news for our planet” that global average temperatures in 2015 are likely to be the warmest on record.

But as with so many other significant measures coming in, or associated with, the Spending Review, the government has managed to deflect increasingly butterfly mainstream media attention away from substance and on to the easy headlines of its apparent tax credits ‘U-turn’ – something that also bears much more critical scrutiny than it has generally received.

As Andrew Sims, New Economics Foundation (NEF) fellow and founder of the New Weather Institute, comments: “Last year renewables globally added more new capacity than coal and gas combined. But, off-trend, the UK is slashing its renewables forecasts.” This says a lot about the government’s intentions, which need to be carefully examined and soundly challenged.

First, the bigger picture. Despite its poor economic prospects and long-term safety risks, the heavily lobbying nuclear industry and its incoming overseas operators will receive huge handouts from the taxpayer at the same time as backing for renewables is being cut.

Last month (October 2015), the government, having long denied nuclear subsidies publicly, let the cat out of the bag in a small footnote to the announcement of a French-Chinese deal to build a new nuclear power station at Hinkley point. “The government confirms that it is not continuing the ‘no public subsidy policy’ [for nuclear power] of the previous administration,” it coyly declared. 

The day before, energy minister Andrea Leadsom had said: “It is vital that industries over time stand on their own two feet. I don’t think anyone here would advocate an industry that only survives because of a subsidy paid by the bill payer.” But she wasn’t talking about nuclear, coal or gas. She was seeking to get her government off the hook of an 87% cut to support for solar power, and the loss of around 1,000 jobs in the sector, just as it is on the verge of becoming cheaper than gas.

As Guardian environment editor Damian Carrington commented at the time: “Down in the bunker, ministers are hacking back successful, cheap clean energy and throwing enormous subsidies at failed, expensive nuclear power. As ever the missing guest at this gloomy party is energy efficiency, the best of all energy policies.”

Scottish Government energy minister Fergus Ewing, whatever his shortcomings in embracing a fully non-carbon future, has sensibly declared: “[We are] opposed to new nuclear capacity in Scotland. It would divert billions from renewables, where we have a key competitive advantage.”

Now back to the Autumn Statement. Almost unnoticed, the chancellor has slashed funds for draft proofing and insulation, despite the importance of energy conservation and a 15% rise in deaths of vulnerable people from cold homes. The tax support for cooperative solar power initiatives goes this weekend, while shale gas extraction expands.

Most dramatically, without actually mentioning this in parliament, the Chancellor has cut the entire £1 billion funding for the UK’s Carbon Capture and Storage programme (CCS) – which will completely devastate the industry and is the exact opposite of what the Conservative 2015 general election manifesto promised: ““We will protect our planet for our children…committing £1 billion for carbon capture and storage.”

As Phillip Pearson, a senior policy officer in the Trade Union Congress’s Economic and Social Affairs Department. commented: “The Prime Minister will go to the Paris climate change treaty talks next Monday first having crushed the UK’s renewable energy and now its carbon capture industries. The TUC had initially welcomed today’s relief package for energy intensive industries, such as steel. But now, in private phone calls to industry, the government has revealed that it has scrapped public investment in a vital breakthrough technology for our foundation industries like steel, cement and chemicals, with massive energy bills and carbon emissions.”

George Osborne also used the projected 94% fall in world oil prices to have a dig at the Scottish government, failing to note that the damaging impact of this on Britain as a whole results from the consistent failure of UK governments to create contingency funds to insure against price fluctuations and enable the much-needed transition away from carbon dependence.

This is where the debate really needs to move – towards investment in a post-fossil fuel economy and society. At present, we are being led backwards.


© Simon Barrow is co-director of Ekklesia.

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