Ed Balls: George Osborne is scaring away long-term green investment
Ed Balls has slammed the Coalition Government for restricting growth in the green industry by its failure to agree a decarbonisation target in the Energy Bill and "shackling" the Green Investment Bank.
Writing for the New Statesman, the Shadow Chancellor also criticised the Government for raising the prospect of a new ‘dash to gas’ instead of renewables and by failing to implement the scale and certainty of policy needed to effectively de-risk investment in the sector.
He stressed that because of this the Government has “actively undermined business plans to create jobs and growth” adding that it has failed to set the clear long-term targets that business needs to invest with certainty.
In the article, Balls says: “In 2010, the UK was third in the world for investment in green growth – but we have since fallen down the league tables. The danger is that we will see investment and manufacturing expertise which should be based here in Britain going to other European countries instead”.
He commended the Government for remaining formally committed to carbon targets for 2050 through the Climate Change Act, which require largely decarbonising electricity by 2030, but then hit out at George Osborne for blocking the Government from making a clear commitment in law to a 2030 target.
However, he said Osborne could not be solely blamed for the lack of goals set on decarbonising UK industry, blaming the Government for blocking moves to set ambitious renewable and efficiency targets for 2030 at an EU level.
Again, hitting out at Osborne, Balls claimed that the Chancellor has “fostered exactly the kind of policy uncertainty that scares away long-term investment”.
“By talking up the possibility of an implausible shale gas bonanza to justify tacking away from renewables after the 2020 targets run out, he has cast further doubt on the government’s long-term commitment to a low carbon future. Business is being denied the confidence of knowing they will have a market and a price structure they can rely on over the investment horizon they need”.
Balls comments turn to the launch of the Green Investment Bank, which he says the Coalition is taking credit for, despite being proposed by Labour.
“The Government has undermined [The Green Investment Bank] from the start. Giving the Bank the power to borrow on the open market would lever in several times more capital and get considerably more bang for the Government’s buck,” he added.
“Perversely the Chancellor arbitrarily tied this decision to him meeting his target on the national debt. Now, thanks to his wider economic failure meaning he is now not set to meet that target until 2017, the Bank has been left in limbo with neither co-investors nor the sector able to plan ahead. It is an opportunity that George Osborne seems incapable of grasping”.
Another failure by Government, according to Balls, has been implementing an effective energy efficiency strategy, highlighting the poor take-up figures of the Government’s flagship scheme, the Green Deal.
“The construction industry is crying out for clarity on the next steps in Labour’s successful zero-carbon homes strategy. The Green Deal, which replaced previous successful domestic energy efficiency schemes, has so far helped just four households this year,” said Balls.
Earlier this week, Shadow Energy and Climate Change Minister Luciana Berger said energy efficiency must be ‘central’ to discussions around building a sustainable low carbon economy, lifting people out of fuel poverty and saving the planet.
Speaking at Carbon Connect and the Westminster Sustainable Business Forum’s Energy Efficiency summer reception, Berger reaffirmed the Labour Party’s commitment to the energy efficiency agenda and in the Green Deal.