Will Cameron stand by the Green Deal?

The flagship environmental policy is in trouble. If it fails, the PM will want Lib Dems to get the b

The government's elaborate confusion over tax breaks on charitable donations has distracted attention from another intriguing policy row that erupted over the weekend. On Sunday, it emerged that three Tory ministers - Eric Pickles, Chris Grayling and Grant Shapps - are lobbying to have one of the coalition's flagship environmental policies scrapped. The "Green Deal" is a substantial project to insulate Britain's drafty housing stock by creating a consumer market for eco-friendly home improvements. In theory, householders benefit from lower bills and the world benefits from fewer carbon emissions.

Hostile Conservatives worry that the plans will effectively force people undertaking everyday home improvements to pay more in the name of eco-friendliness. They have dubbed the whole thing a stealth "conservatory tax." This is a pretty popular insurgency on the right of the Tory party, where environmentalism is generally suspected of being a false idol. Chris Huhne, the former Energy Secretary who put in most of the work on the Green Deal, has lashed out at Tory critics for "posturing".

From this little skirmish you might easily get the impression that the Green Deal is a Lib Dem policy, opposed by Tories. That isn't quite the case. Greg Barker, the Conservative climate change minister, has defended the programme, pointing out that it is inscribed in the coalition agreement. David Cameron himself has regularly cited it as evidence of his government's eco-credentials. The Prime Minister has, in the past at least, been quite enamoured of the policy. A market-driven device, harnessing the aggregate power of many individual consumers to achieve a great environmental goal and improve Britain's housing stock; bottom-up solutions from ordinary households instead of top-down state meddling - it all seemed so clever, modern, progressive … so big society!

The problem is that it relies on two important drivers over which government has little control: First, private sector companies must offer competitive Green Deal packages and, second, consumer demand has to hold up for the market to work. People will have to borrow money to do the relevant improvements. The policy is designed in such a way that households should always gain more from cheaper bills so, in net terms, they are better off. But in the current climate, borrowing at all is a toxic concept for many people. Industry sources are whispering quietly that the whole project is way off track and might unravel altogether.

Much of the financing early on will end up coming from the fledgling Green Investment Bank. The Department for Energy and Climate Change insists this was always meant to be the case, but that doesn't quite square with the idea of a programme driven by the private sector. It looks more like one government green policy bailing out another one.

Presumably, the Tory ministers sharpening their knives for the Green Deal are well aware that it might fall over of its own accord. Under such circumstances it doesn't do any harm to line up a good we told you so" especially one that plays well with Conservative party grass roots. The interesting thing to watch will be whether Cameron continues to stand by the Green Deal and cite it as a badge of eco-honour or discreetly distances himself from it.

If the PM treats it as a fully fledged coalition policy, Heaven and Earth will be moved to make it work. If, however, Downing Street allows it to be portrayed as a purely Lib Dem initiative a hobby horse of the junior partner, conceived by an ex-Secretary of State currently awaiting trial for a driving offence we'll know the Green Deal is being lined up for the chop.

The Green deal aims to protect house owners against rising heating costs Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

Photo: Getty
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Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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