Treasury trying to shut down climate department and axe clean energy funds

The credibility of the coalition’s claim to be the ‘greenest government ever’ suffered a huge blow today following reports the Treasury is planning to axe DECC.

The credibility of the coalition’s claim to be the ‘greenest government ever’ suffered a huge blow today with The Guardian revealing Lib Dem climate secretary Chris Huhne has had to battle to stop George Osborne’s Treasury shutting down his Department of Energy and Climate Change altogether.

The Guardian reports:

“Huhne is having to resist the Treasury on numerous policy fronts.”


“When all government departments were asked to model the effect of 40 per cent cuts over the summer, officials at DECC told ministers that cuts of that level to its £3.2 billion budget would make it unable to stand alone as a viable entity.

The department is still facing huge cuts in the upcoming comprehensive spending review (CSR), which could cripple attempts to meet UK climate and clean energy targets.

The newspaper quotes senior sources at DECC confirming Whitehall rumours that the Treasury have been seeking to axe support for low-carbon technologies in the CSR, in addition to cuts already announced earlier this year.

In particular, the pot of money for funding four carbon capture and storage (CCS) demonstration projects, set up by Mr Huhne’s predecessor Ed Miliband, was said to have been at risk – though the paper reports:

“Senior sources concede the money for CCS4 was in jeopardy but insist that it is now safe.”

It is not yet known if other clean energy funds, like the renewable heat incentive, designed to support renewables energy schemes, will survive the cuts. Equally, it is not yet known if the Green Investment Bank that has been promised by George Osborne and Vince Cable will have any public money inside it. Without public finance, it would be completely ineffectual.

With so little money, and facing regular attacks from Tory right, Mr Huhne was limited in what he could say in his speech to Lib Dem conference yesterday. He promised an energy efficiency drive and that by the end of the parliament Britain would boast the “fastest growing” renewable industry in the European Union. But other European countries’ renewables sectors are already so large that this wouldn’t be as difficult as it sounds.

All this comes after The Guardian reported yesterday that the coalition has dropped two of its other key green election pledges – one to tackle illegally logged timber, and another to support green energy pioneers. In turn, these u-turns followed the putting on hold of the coalition’s totemic green pledge to introduce new regulations to limit carbon pollution from new power stations.

Environmental campaigners have also attacked the coalition for breaking with the US and Europe and failing to introduce a moratorium on risky deep sea oil drilling off Scotland despite the fact that the independent reviews into the Gulf blowout have yet to conclude. Greenpeace lawyers have threatened to sue the government over this, and the groups’ activists are currently blocking a Chevron deep drilling attempt off Shetland.

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