Osborne castrates Green Bank plan

There were more broken promises from George Osborne earlier with the castration of the Green Bank plan and axing of support for Carbon Capture and Storage technology, reports Joss Garman.

Back in November the prime minister appeared before the cross-parliamentary energy and climate change committee and told MPs that despite newspaper reports of rumours to the contrary, the Green Investment Bank would indeed be a bank and not a fund.

A few weeks later when those rumours and news reports just wouldn’t go away the energy secretary Chris Huhne wrote to The Guardian saying:

“The green investment bank must be a bank. Ducks quack, and banks borrow as well as lend.”

In what is undoubtedly the single most significant decision for the low carbon agenda since this government came to power, the Financial Times reports this morning that the Bank won’t in fact be able to borrow and operate as a proper bank until at least 2015.

Tomorrow’s budget will see the announcement of a duck that can’t quack, or can’t fly, or something. Mr Osborne and his officials have seen off Mr Huhne’s plan and prompted just the latest green u-turn.

Ernst and Young (E&Y) calculated there is a £370 billion low carbon funding gap that needs to be filled by the Green Bank. The Bank was intended to use relatively small amounts of public money to leverage much larger sums of private capital for investment in clean energy and energy efficiency. It was anticipated that a real green bank with the ability to borrow could raise £200-£300bn in private sector investment.

Even before today’s news E&Y warned that confidence in the UK clean tech sector is faltering. Their survey in January found that fewer UK-based corporates, financiers and clean tech companies now believe UK investment in clean energy and clean technology will increase in 2011 compared to 2010.

Just 7% of those surveyed expect there to be sufficient investment in 2011 to give the UK competitive advantage, compared to 17% in research a year earlier.

Hot on the heels of the bad news about the Green Investment Bank, the FT also reports this morning that the key funding stream for the UK’s programme of building at least four Carbon Capture and Storage (CCS) demonstration projects in the UK will also be axed by Mr Osborne later this week. This leaves the coalition agreement pledge to build four CCS demos unfunded with no indication of whether the money will now be raised from general taxation of if the coalition plans to simply renege on their commitment altogether.

The demos had been due to be paid for by a levy on energy bills, which would have raised £9.5 bn, but the scheme would in turn have raised £6.5bn each year, created about 100,000 jobs and made the UK the world leader in developing this cutting edge technology.

The CCS cuts follow confirmation that the government’s scheme for supporting large scale solar power generation via so-called ‘Feed in tariffs’ was cut by 70 per cent last week, just a year after it was created, prompting fury from the clean tech industry and the loss of hundreds of jobs that were in the pipeline.

Like the cuts to CCS technology, this news will deter investment and see jobs and industries going overseas. A partner at Ernst and Young told the BBC:

“The whole investor market was totally disengaged as a result of the feed in tariff being ripped up.”

Equally, Ray Noble at the Renewable Energy Association, a trade body, said:

“No new (solar) projects will start after this comes into effect.”

Now with extremely limited funding for the proposed CCS programme, insufficient funding for renewables and energy efficiency, and with reports in the last few days suggesting even Mr Huhne admits that following Japan there may be delays and cost increases for the government’s proposed new nuclear programme, today’s news casts doubt over the coalition’s entire low carbon strategy.

It’s apparent that only an intervention by the prime minister to reign in Treasury officials, and prevent them from running energy policy entirely out of Number Eleven, will be able to breathe new life into their increasingly laughable claims to be the “greenest government ever”.

45 Responses to “Osborne castrates Green Bank plan”

  1. Tory Aardvark

    RT @leftfootfwd: Osborne castrates Green Bank plan: http://bit.ly/fy7fLv reports @JossGarman

  2. Tory Aardvark

    Osborne castrates Green Bank plan: http://bit.ly/fy7fLv reports ecomentalist & polar bear plummeting move eco tard @JossGarman

  3. Amisha Ghadiali

    RT @leftfootfwd: Osborne castrates Green Bank plan: http://bit.ly/fy7fLv reports @JossGarman

  4. Will Tucker

    RT @leftfootfwd: Osborne castrates Green Bank plan: http://bit.ly/fy7fLv reports @JossGarman

  5. Mike Ranscombe

    RT @leftfootfwd: Osborne castrates Green Bank plan: http://bit.ly/fy7fLv reports @JossGarman

  6. Charles Holland

    RT @leftfootfwd: Osborne castrates Green Bank plan: http://bit.ly/fy7fLv reports @JossGarman

  7. samantha

    RT @leftfootfwd: Osborne castrates Green Bank plan: http://bit.ly/fy7fLv reports @JossGarman

  8. Guppi Bola

    Just love the title for this one @jossgarman : Osborne castrates Green Bank plan: http://bit.ly/fy7fLv on @leftfootfwd

  9. Casper ter Kuile

    RT @guppikb: Just love the title for this one @jossgarman : Osborne castrates Green Bank plan: http://bit.ly/fy7fLv on @leftfootfwd

  10. Joss Garman

    RT @leftfootfwd: Osborne castrates Green Bank plan: http://bit.ly/fy7fLv reports @JossGarman

  11. Rob Hughes

    RT @leftfootfwd: Osborne castrates Green Bank plan: http://bit.ly/fy7fLv reports @JossGarman

  12. Guy Shrubsole

    RT @leftfootfwd: Osborne castrates Green Bank plan: http://bit.ly/fy7fLv reports @JossGarman

  13. Roger Lawrie

    RT @leftfootfwd: Osborne castrates Green Bank plan: http://bit.ly/fy7fLv reports @JossGarman

  14. Daniel Pitt

    Osborne castrates Green Bank plan: http://bit.ly/fy7fLv #ConDemNation

  15. Hugh Potter

    RT @leftfootfwd: Osborne castrates Green Bank plan: http://bit.ly/fy7fLv reports @JossGarman

  16. Robert Jones

    Ducks quack, says Huhne, but the government's duck will have its bill stapled shut until 2015 http://bit.ly/gJJDjP @leftfootfwd

  17. Darren Shirley

    RT @leftfootfwd: Osborne castrates Green Bank plan: http://bit.ly/fy7fLv reports @JossGarman

  18. Caroline Lucas

    RT @danielvockins: Announcing Green Investment Bank duck that can’t quack, or can’t fly … http://bit.ly/hWszPz .>Hugely missed opportunity

  19. Joe Cassels

    RT @CarolineLucas: RT @danielvockins: Announcing Green Investment Bank duck that can’t quack, or can’t fly … http://bit.ly/hWszPz .> …

  20. Richard Openshaw

    RT @leftfootfwd: Osborne castrates Green Bank plan: http://bit.ly/fy7fLv reports @JossGarman

  21. Mark Turner

    RT @CarolineLucas: RT @danielvockins: Announcing Green Investment Bank duck that can’t quack, or can’t fly … http://bit.ly/hWszPz .> …

  22. *mutley*

    RT @CarolineLucas: RT @danielvockins: Announcing Green Investment Bank duck that can’t quack, or can’t fly … http://bit.ly/hWszPz .> …

  23. Kieron Bryan

    RT @leftfootfwd: Osborne castrates Green Bank plan: http://bit.ly/fy7fLv reports @JossGarman

  24. Vinay Nair

    RT @CarolineLucas: RT @danielvockins: Announcing Green Investment Bank duck that can’t quack, or can’t fly … http://bit.ly/hWszPz .> …

  25. josh ryan-collins

    RT @CarolineLucas: RT @danielvockins: Announcing Green Investment Bank duck that can’t quack, or can’t fly … http://bit.ly/hWszPz .> …

  26. Andrew Harmsworth

    RT @CarolineLucas: RT @danielvockins: Announcing Green Investment Bank duck that can’t quack, or can’t fly … http://bit.ly/hWszPz .> …

  27. Miguel Mendonca

    RT @CarolineLucas: RT @danielvockins: Announcing Green Investment Bank duck that can’t quack, or can’t fly … http://bit.ly/hWszPz .> …

  28. EastOxfordGreens

    RT @CarolineLucas: RT @danielvockins: Announcing Green Investment Bank duck that can’t quack, or can’t fly … http://bit.ly/hWszPz .> …

  29. Susie Arnott

    RT @CarolineLucas: RT @danielvockins: Announcing Green Investment Bank duck that can’t quack, or can’t fly … http://bit.ly/hWszPz .> …

  30. Political Dynamite

    RT @CarolineLucas: RT @danielvockins: Announcing Green Investment Bank duck that can’t quack, or can’t fly … http://bit.ly/hWszPz .> …

  31. Danny@thecapertree

    RT @leftfootfwd: Osborne castrates green Bank plan http://bit.ly/gJJDjP such a tragic shame we have such a crap government.

  32. Colin Reynolds

    RT @CarolineLucas: RT @danielvockins: Announcing Green Investment Bank duck that can’t quack, or can’t fly … http://bit.ly/hWszPz .> …

  33. Anon E Mouse

    Joss Garman – It’s ok for rich posh boy eco toffs like yourself who don’t have to work to earn a living and just live out of the pockets of Big Daddy but for the rest of us on twelve hour shifts who have to drive to work this really stinks.

    For you to be even considering solar cells in the UK shows your complete naivety on this whole subject.

    Since your Plane Stupid campaign seems to have been a complete success why aren’t you now doing something else other than constant self promotion?

  34. WarringtonGreenParty

    RT @CarolineLucas: RT @danielvockins: Announcing Green Investment Bank duck that can’t quack, or can’t fly … http://bit.ly/hWszPz .> …

  35. george

    RE, comment from an0n. just wait till oil is at 150$ plus a barrell – then you will be whingeing that you cant afford to drive, shop – if action isnt taken now with a credible forward looking energy plan – we are all going to suffer. the governement needs to think beyond the next election and pu tin place policy that both investors and consumers support

  36. Anon E Mouse

    george – So far we have had global cooing, global warming, peak oil crisis in the 1970’s blah blah blah

    And still there is no alternative to oil because economically there isn’t one – I work designing energy saving devices and can you that the number of people who are against nuclear power is frightening. Even when you explain that our electricity from France is generated that way they still dislike it.

    Wind power is no good. Tidal power technically unfeasible (currently) and photovoltaic doesn’t last long enough to cover the investment.

    The wind doesn’t always blow george. A point somehow seemingly lost on this eco toff who doesn’t care what price the petrol is, because unlike the working classes he doesn’t inhabit that world where filling a tank with fuel is a concern.

    You are right long term but this crisis in refilling your car is now…

  37. Anon E Mouse

    Cooling I meant!

  38. Budget 2011: We need a strong Green Bank to bridge green investment gap | Left Foot Forward

    […] for chancellor George Osborne as he contemplates his budget speech, which, as Left Foot Forward reported yesterday, seems set to curtail plans for a Green Investment Bank […]

  39. Brandi Evans

    Osborne castrates Green Bank plan | Left Foot Forward: The Bank was intended to use relative… http://bit.ly/e7mbSG my site, DIY Videos

  40. Plan Of Salvation « Salvation Plan

    […] Osborne castrates Green Bank plan | Left Foot Forward […]

  41. Savvas Papasavva

    RT @CarolineLucas: RT @danielvockins: Announcing Green Investment Bank duck that can’t quack, or can’t fly … http://bit.ly/hWszPz .> …

  42. Nick Clegg has already broken his promise on nuclear subsidies | Left Foot Forward

    […] from the treasury, to delay the introduction of borrowing powers for the Green Investment Bank. Delays on the GIB, assaults on the newly introduced feed-in tariff, and a general conviction that the […]

  43. Vince Cable caught seeking to scupper UK’s climate efforts | Left Foot Forward

    […] in HMT and the Transport Department are lobbying against them and as with the argument over the Green Bank (an argument Huhne lost), it will ultimately be Cameron’s decision when it comes on […]

  44. Tory Right’s “deregulation zealots” threatening UK’s green growth | Left Foot Forward

    […] zero carbon by 2016 has been significantly watered down. Equally, the Green Investment Bank has been curtailed – prohibited from acting as a bank until 2014 at the […]

  45. Left and right should unite to support the creation of a National Infrastructure Bank | Left Foot Forward

    […] the Green Investment Bank is a start, its initial capitalisation of £3bn, limited powers of borrowing, and concentration on […]

Leave a Reply