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MPs slam Chancellor's mixed messages on energy policy



Environmental Audit Committee makes fresh call for decarbonisation target to be included in forthcoming Energy Bill


As Energy and Climate Change Secretary Ed Davey prepares to give evidence to MPs on the forthcoming Energy Bill today, a separate committee of MPs will issue a blistering attack on the coalition for undermining investor confidence across the energy industry.


MPs on the Environmental Audit Committee will urge the Treasury to ensure that next month's Autumn Statement provides a clear message that it backs green growth, following a series of "mixed messages" from government.It will also reiterate a call for the coalition to include a decarbonisation target in the forthcoming Energy Bill, in order to provide a clear signal for businesses that it is committed to driving low carbon investment.


The report raises fresh concerns that the Treasury sees environmental policies as a barrier to economic growth and criticises the Chancellor over reports he referred to some MPs and green groups as the "environmental Taliban".


The MPs also highlight the recent departmental row over wind power, which has seen Energy Minister John Hayes twice contradicted by Davey over his stated opposition to the continued expansion of onshore wind farms in the UK. 


Joan Walley MP, chairwoman of the Environmental Audit Committee, urged the Chancellor to use the Autumn Statement to unequivocally state his support for green growth.


"The Treasury must end the uncertainty on energy policy and give investors and businesses the confidence to seize the enormous opportunities presented by new clean technologies," she said.


The Committee's comments echo those of Hayes' predecessor Charles Hendry, who yesterday warned that continuing political uncertainty over the Energy Bill and wider low carbon policy was adding significantly to the cost of capital for energy infrastructure developers.


Tim Yeo, chairman of the Energy and Climate Change Committee, which will today quiz Davey on the Energy Bill, also suggested this weekend that the government's handling of energy policy increasingly resembles a "laughable plotline from The Thick of It".


The Environmental Audit Committee will urge the Treasury to explain how a proposed new incentive scheme for gas-powered plants is compatible with the UK's legally binding targets to cut carbon emissions.


"A second 'dash for gas' could lock the UK into a high-carbon energy system that leaves us vulnerable to rising gas prices," added Walley. "The government needs to reassure investors by setting a clear target in the Energy Bill to clean up the power sector by 2030."


The report also calls on the Treasury to find ways of boosting the uptake of energy efficiency measures, following a recent report from the Department of Energy and Climate Change, which found such measures could avoid the need for up to 22 power stations.


It suggests the government could recycle revenues from carbon taxes to support a wide-scale rollout of energy efficiency measures. A recent report found such a move could boost the UK's gross domestic product by 0.2 per cent and create 71,000 jobs by 2015.


In related news, WWF UK chief executive David Nussbaum today called on the Prime Minister to urgently take control of the government's climate change strategy. In an interview with the Guardian, he warned a "rogue pack" of senior ministers, including Chancellor George Osborne and Energy Minister John Hayes were actively seeking to undermine the UK's green economy.


"It's time for Cameron to be the prime minister he told us all he would be and deliver on his earlier promises," he said. "His lack of vocal leadership on climate change and energy is jeopardising some of the most promising green shoots of recovery. The UK needs significant investment in green infrastructure, yet he is letting a rogue pack within his party play politics with such an important issue."


The EAC report comes as the government is today expected to announce the Prime Minister's high-profile plan to force energy companies to move customers on to their lowest tariffs.


According to reports from ITV, the policy will include an element of compulsion in line with the Prime Minister's recent commitment in the House of Commons, although it remains unclear how the law will be used to get customers on to lower tariffs without undermining competition in the market.