Danny Alexander picks an important fight with Osborne

Scrap over climate change policy.

In tabling a motion for the Liberal Democrats autumn conference on low carbon policy, Danny Alexander MP, Chief Secretary to the Treasury, has picked an important fight with his boss, the Chancellor George Osborne. Alexander’s feet must be kept to the fire on this if Britain is to have any chance of achieving its legal obligations to decarbonise the power sector.

Alexander’s motion roundly criticizes "the refusal of the Conservatives to acknowledge that investing in carbon reducing technologies has the potential to make an important contribution to long-term growth".

There is no one this accusation can be more squarely aimed at than Alexander’s boss in the Treasury, the Chancellor George Osborne.

Since his autumn 2011 conference speech, Osborne has been almost wholly negative on the low carbon agenda. "We are not going to save the planet by putting our country out of business", he said putting himself squarely at odds with business groups like the CBI and EEF who see the green economy as a key driver of growth. Indeed, the green economy grew by 2.3 per cent in real terms in 2010/11, and made up a third of what little growth Britain managed in 2011/12.

Most recently Osborne was heavily rebuked by the Energy and Climate Change Committee for undermining the development of the government’s flagship Energy Bill, which is intended to bring forward vast amounts of investment in low carbon energy sources. Osborne seems far more interested in making the UK a fossil fuel hub and frightening the wind industry than going low carbon.

The Chancellor is likely to be particularly angered by Alexander’s proposal for the Government to establish a 2030 decarbonisation target for the power sector, in the range of 50 to 100 grams of CO2 emissions per kilowatt hour of energy produced. 2030 is a crucial staging post towards the UK reducing its emissions by 80 per cent 2050, and, while the independent Committee on Climate Change and the Energy and Climate Change Select Committee have recommended that a target of 50g by 2030 for the power sector is adopted, it is something to which Osborne appears firmly opposed. The mismatch between Alexander’s proposed target range of 50g to 100g, instead of the stricter 50g recommended by the Committee on Climate Change, is something that requires an explanation.

It is our view, set out in our submission to the Energy and Climate Change Select Committee, that adoption of a 2030 power sector target is the single most important step the Government can take to provide certainty to industry about the direction of travel for the energy industry. Providing this certainty, we believe, will ensure that energy bills are kept as low as possible and the UK reaps the maximum benefits from growth in low carbon sectors, while at the same time emissions are reduced.

Danny Alexander is right to challenge the Chancellor on climate change policy because going low carbon is the only credible economic policy. It is now time for others to come out in support of the 2030 target and ensure it is adopted by government in the Energy Bill. This includes the Labour party; prominent green-minded Conservative MPs like Zac Goldsmith, Oliver Letwin and William Hague who are witnessing the rapid deterioration of their party’s reputation on climate change; and industry pressure groups like the CBI that are supportive of ambitious emission reduction policies.

Reg Platt is a Research Fellow at IPPR. He tweets at @regplatt

George Osborne. Photograph: Getty Images

Reg Platt is a Research Fellow at IPPR. He tweets as @regplatt.

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The tale of Battersea power station shows how affordable housing is lost

Initially, the developers promised 636 affordable homes. Now, they have reduced the number to 386. 

It’s the most predictable trick in the big book of property development. A developer signs an agreement with a local council promising to provide a barely acceptable level of barely affordable housing, then slashes these commitments at the first, second and third signs of trouble. It’s happened all over the country, from Hastings to Cumbria. But it happens most often in London, and most recently of all at Battersea power station, the Thames landmark and long-time London ruin which I wrote about in my 2016 book, Up In Smoke: The Failed Dreams of Battersea Power Station. For decades, the power station was one of London’s most popular buildings but now it represents some of the most depressing aspects of the capital’s attempts at regeneration. Almost in shame, the building itself has started to disappear from view behind a curtain of ugly gold-and-glass apartments aimed squarely at the international rich. The Battersea power station development is costing around £9bn. There will be around 4,200 flats, an office for Apple and a new Tube station. But only 386 of the new flats will be considered affordable

What makes the Battersea power station development worse is the developer’s argument for why there are so few affordable homes, which runs something like this. The bottom is falling out of the luxury homes market because too many are being built, which means developers can no longer afford to build the sort of homes that people actually want. It’s yet another sign of the failure of the housing market to provide what is most needed. But it also highlights the delusion of politicians who still seem to believe that property developers are going to provide the answers to one of the most pressing problems in politics.

A Malaysian consortium acquired the power station in 2012 and initially promised to build 517 affordable units, which then rose to 636. This was pretty meagre, but with four developers having already failed to develop the site, it was enough to satisfy Wandsworth council. By the time I wrote Up In Smoke, this had been reduced back to 565 units – around 15 per cent of the total number of new flats. Now the developers want to build only 386 affordable homes – around 9 per cent of the final residential offering, which includes expensive flats bought by the likes of Sting and Bear Grylls. 

The developers say this is because of escalating costs and the technical challenges of restoring the power station – but it’s also the case that the entire Nine Elms area between Battersea and Vauxhall is experiencing a glut of similar property, which is driving down prices. They want to focus instead on paying for the new Northern Line extension that joins the power station to Kennington. The slashing of affordable housing can be done without need for a new planning application or public consultation by using a “deed of variation”. It also means Mayor Sadiq Khan can’t do much more than write to Wandsworth urging the council to reject the new scheme. There’s little chance of that. Conservative Wandsworth has been committed to a developer-led solution to the power station for three decades and in that time has perfected the art of rolling over, despite several excruciating, and occasionally hilarious, disappointments.

The Battersea power station situation also highlights the sophistry developers will use to excuse any decision. When I interviewed Rob Tincknell, the developer’s chief executive, in 2014, he boasted it was the developer’s commitment to paying for the Northern Line extension (NLE) that was allowing the already limited amount of affordable housing to be built in the first place. Without the NLE, he insisted, they would never be able to build this number of affordable units. “The important point to note is that the NLE project allows the development density in the district of Nine Elms to nearly double,” he said. “Therefore, without the NLE the density at Battersea would be about half and even if there was a higher level of affordable, say 30 per cent, it would be a percentage of a lower figure and therefore the city wouldn’t get any more affordable than they do now.”

Now the argument is reversed. Because the developer has to pay for the transport infrastructure, they can’t afford to build as much affordable housing. Smart hey?

It’s not entirely hopeless. Wandsworth may yet reject the plan, while the developers say they hope to restore the missing 250 units at the end of the build.

But I wouldn’t hold your breath.

This is a version of a blog post which originally appeared here.

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