Chancellor’s green backtrack offers hope to energy sector

George Osborne has backtracked on green policies by announcing a £250m package of help for energy intensive users. The Chancellor used his Autumn statement this lunchtime to announce a range […]

By Sumit Bose

George Osborne has backtracked on green policies by announcing a £250m package of help for energy intensive users.

The Chancellor used his Autumn statement this lunchtime to announce a range of measures designed to help the energy sector, but many have seen this as a U-turn. Mr Osborne said he had listened to the concerns of energy intensive users who feared carbon taxes would make them uncompetitive with their international rivals. Mr Osborne told Parliament that was a concern.

“I am worried about the combined impact of the green policies adopted not just in Britain, but also by the European Union, on some of our heavy, energy-intensive industries. We are not going to save the planet by shutting down our steel mills, aluminium smelters and paper manufacturers. All we will be doing is exporting valuable jobs out of Britain.”

The Chancellor said he would provide £250 million to help counteract this. “We will help them with the costs of the EU Trading Scheme and the carbon price floor, increase their climate change levy relief and reduce the impact of the Electricity Market Reforms on these businesses too. This amounts to a £250 million package over the Parliament and it will keep industry and jobs here in Britain.”

But already the sustainable energy lobby have voiced criticism of the measures. Juliet Davenport CEO of Good Energy said: “While Chris Huhne is heading to Durban trying to secure an international deal to cut global emissions, it’s a shame that the Treasury isn’t putting their money where their LibDem colleague’s mouth is and announcing a major boost in green investment. Despite touting his green credentials, the Chancellor has missed yet another opportunity to fulfil his claim that the Treasury will be the ally of green investment, the green infrastructure and the green economy.”

But Mr Osborne insisted today’s measures were right for the country: “We shouldn’t price British business out of the world economy. If we burden them with endless social and environmental goals – however worthy in their own right – then not only will we not achieve those goals, but the businesses will fail, jobs will be lost, and our country will be poorer.”

The Chancellor’s statement was made just hours before Energy Minister Greg Barker faces a grilling on the cut of the Feed-in Tariff subsidy levels for the solar industry.

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