Osborne confirms DECC and Defra budget cuts in spending review

The Chancellor George Osborne has confirmed in today's spending review that the Department for Energy and Climate Change's (DECC) budget will be cut by 8%, while the Department for the Environment, Food and Rural Affairs (Defra) has agreed a 10% cut.

In May, DECC agreed with HM Treasury to cut its budget by up to 10% but the Chancellor announced today that the cut would be set at 8%.

He also confirmed that Defra would see a 10% budget cut after the chancellor announced in May that he would aim to reduce departmental spending by £11.5bn by April 2015.

Osborne also confirmed his backing for shale gas saying: “Now we make the tax and planning changes which will put Britain at the forefront of exploiting shale gas.

“We will provide our country with the energy of the future at a price we can afford,” he added.

According to Osborne, the changes will facilitate around £100bn of private investment in energy.

In addition to shale, the Chancellor also confirmed plans to increase investment in renewables and nuclear saying “this country is already spending more on renewables than ever before. Now we’ll provide future strike prices for low carbon”.

On nuclear, the Chancellor said: “We’re restarting our civil nuclear programme when other countries are unable to continue theirs. Now we provide guarantees for new nuclear”.

During questions from the opposition, Ed Balls asked the chancellor why the coalition has not set a 2030 decarbonisation target, which will provide certainty to investors and is what “energy providers are asking for”. The Chancellor did not comment on the Government’s position on the target.

Labour MP Barry Gardiner asked the Chancellor how the Government was to carry out the “biggest energy infrastructure reform in history” after he cut DECC’s budget. In answering his question, Osborne stressed that the department had agreed that the reform would be achievable despite the cut.

Leigh Stringer

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