Green Budget 2012: Barker hails Budget’s 'crystal clear commitment' to green economy

Climate Minister: "This is the Budget where the green economy joined the economic mainstream"

I have to say I am not convinced by this...... you ?

Climate Minister Greg Barker has heralded yesterday's Budget as clear evidence of the government's "unwavering commitment" to the renewables sector, arguing that it should lay to rest speculation that Chancellor George Osborne is luke warm towards the green economy.

The Budget was widely criticised by green groups yesterday, who accused Osborne of undermining the low carbon economy by handing £3bn in tax breaks to the oil and gas industry and offering no significant new measures to drive green growth.
Barker countered that Osborne's clear indication that renewables will play a "crucial" role in the UK's energy mix, coupled with a host of business-friendly measures, would provide a major boost to the green economy.

"Those who thought the Chancellor was going to walk away from renewables will be sorely disappointed," he said. "This was a crystal clear commitment to building a world-class renewables sector in the UK... There is an unwavering commitment to building our renewables resource in the most cost-effective way."

He added that following previous comments from the Chancellor that had been interpreted as hostile to the green economy, Osborne had clearly stated, for "the avoidance of any doubt", that the government wants to see a thriving renewables sector in the UK.

A spokesman for trade association Renewable UK yesterday welcomed the shift in tone from the Chancellor, and predicted his statement of support for renewables could help convince companies such as Vestas and Siemens that are currently considering locating wind turbine factories in the UK to move forward with their investment.

Barker said he was hopeful the Chancellor's words would help secure the new investment, although he added that the government was "not complacent" and would continue to work with the firms to ensure there is an attractive environment for wind companies to invest.

"We want to make it clear that we are green business friendly," he said. "It is important to remember that other moves like the cut in corporation tax, the expansion of enterprise zones, and the support for science and R&D will also provide a big boost to innovative green businesses."

Barker also rejected criticism of the government's latest tax breaks for fossil fuel companies planning to drill to the west of Shetland – a move that prompted green NGOs to brand the Budget as a "polluters' charter".

"That sort of language undermines the credibility of the critics," Barker said, adding that while the government recognised it had a long way to go to build a genuinely green economy it was "nonsense" to suggest that having an effective gas strategy would inevitably undermine the wider low carbon strategy.

Reiterating the Department of Energy and Climate Change's stance, Barker argued that gas represented an important "transition" fuel, was intended as a replacement for coal power rather than low carbon alternatives, would not impact renewables targets, and would ultimately be utilised with carbon capture and storage technology.

He also stressed that the Green Investment Bank, which will begin investing next month under the guise of Green Investment UK while the institution awaits EU State Aid approval, will provide a greater boost to the green economy than many people are predicting.

"The Chancellor is anxious that we get investment flowing into the green economy," he said, outlining how the bank will invest £775m over the next 12 months and a further £1.3bn the year after. "Very few people have appreciated what's coming down the line. In terms of its scale and ambition it is way beyond anything envisaged at the election."

He acknowledged that the bank may not now be allowed to borrow until 2016/17 after the Chancellor confirmed that the time table for removing the deficit had slipped, but he insisted that the long-term goal remained the creation of a green bank with borrowing powers that will provide a major growth engine for the green economy.

Barker also acknowledged the removal of a crucial tax break for combined heat and power (CHP) plants could impact the sector's growth, confirming that DECC and the Treasury were looking at alternative options for improving support for the technology.

Barker said the central message for green businesses from the Budget was that they were now part of the economic mainstream – a fact that will be underlined next month during a government-backed Clean Energy Week timed to coincide with a London Clean Energy Summit attended by ministers from across the G20.

"This is the Budget where the green economy joined the economic mainstream," he said. "It is part of our plan for sustainable growth and rebalancing our economy. The Chancellor made it clear it is an important part of our growth plan."

However, political opponents accused the government of still not doing enough to support the green economy and drive genuine low carbon growth.

Caroline Lucas, leader of the Green Party and MP for Brighton Pavilion, said the Budget represented the "nail in the coffin for this government's ‘greenest ever' pledge".

"The determination to plough ahead with growth-at-any-cost planning reforms and aviation expansion, throw money at North Sea oil and gas, and ignore the potential of green energy shows that this administration's environmental policy is blue, not green," she said.

"The Chancellor's stubborn refusal to accept that investment in clean renewable energy and energy efficiency can simultaneously tackle the environmental crisis, stabilise the UK economy and create jobs is depriving this country of a more prosperous future."