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

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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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