Ed Balls is backing calls for the Government to stop “dithering” on its support for low carbon targets if it is to avoid losing billions of pounds of green investment.
The Shadow Chancellor’s comments come as research by think tank Green Alliance shows £180 billion of new infrastructure investment, the same as 12% of GDP, is at risk because of uncertainty about the UK’s commitment to its current low carbon direction.
The analysis of the Treasury infrastructure pipeline shows more than 70% of planned spending on projects is on infrastructure built to support a low carbon economy in Britain.
But GDP could fall by 2.2% and potentially push the UK back into recession if the £60 billion of low carbon projects planned for the next two years don’t go ahead, warns the think tank.
The Shadow Chancellor said: “As the Green Alliance rightly reminds us, greater certainty on energy policy and a stronger commitment to a low-carbon future can unlock long-term investment that will both be good for our environment and for our economy too. The government should start by ending the dither and finally setting a decarbonisation target for 2030.”
Last week the Prime Minister David Cameron showed his support for wind power by visiting the London Array. Industry will be watching closely to see if he heeds their concerns.
Matthew Spencer, Green Alliance director said: “Unfortunately the big beasts of British politics have been largely silent about this opportunity and investor confidence has dropped as the perception has grown that the UK is not fully committed to its current low carbon direction. This is perverse.
“Whether you are a fiscal conservative or a Keynesian you should back these projects because of their big short-run growth impact and their low requirement for government funding,” he added.
The research also shows low carbon infrastructure projects are worth more than four times high carbon ones, while offshore wind projects alone are worth more than four times planned gas power spending.
Terence Watson, President of Alstom UK said low carbon is the “biggest potential growth area” for his company with great export opportunities: “We provided 700 new jobs in the last year, with another 600 on the horizon. But this is only the start.”
Dr Tony Cocker, chief executive of E.ON UK added it is “critical that we continue to have policy clarity and clear direction and this is just as important for the end customer”.