A £191m kitty of cash known as the Fossil Fuel Levy is at the centre of a row over renewables and the Green Investment Bank between Prime Minister David Cameron and Scotland’s First Minister Alex Salmond.
The levy is a Scottish government fund which, in last week’s Spending Review, George Osborne stated could only be spent on “promoting the use of energy from renewable sources”.
Mr Salmond says this is unacceptable given other spending constraints on his governmental budgets. He wants to use some of the levy for infrastructure spending which will in turn, he says, benefit renewable energy.
In a letter to Mr Cameron yesterday, the First Minister said: “To be told that we should access the Fossil Fuel levy and spend more on renewables with no increase in Scotland’s Departmental Expenditure Limit and therefore, by implication, spend less on health and education is frankly incredible, particularly in the current financial climate.
“In response, we have made it clear that the ‘ring fencing’ of 250 million pounds into the proposed Green Investment Bank with no details on the timing of its creation, its governance, business model or funding sources, is a proposal that Scottish Ministers are unable to accept.”
Mr Salmond added that “with a significant proportion of the UK’s renewable energy industry and resource, Scotland could reasonably expect to have a much larger share than this from the Green Investment Bank funding once that institution is eventually up and running and lending”.
He said Scotland “needs immediate access to the Fossil Fuel Levy in order to leverage much needed investment into infrastructure which will in turn support the offshore renewables revolution”.
Mr Salmond told the Prime Minister that “the failure of your government to make progress on the Fossil Fuel Levy is deeply disappointing, a sentiment that will be shared by the industry, as well as other stakeholders”.