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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New Digital Editor: Serena Kutchinsky

The New Statesman appoints Serena Kutchinsky as Digital Editor.

Serena Kutchinsky is to join the New Statesman as digital editor in September. She will lead the expansion of the New Statesman across a variety of digital platforms.

Serena has over a decade of experience working in digital media and is currently the digital editor of Newsweek Europe. Since she joined the title, traffic to the website has increased by almost 250 per cent. Previously, Serena was the digital editor of Prospect magazine and also the assistant digital editor of the Sunday Times - part of the team which launched the Sunday Times website and tablet editions.

Jason Cowley, New Statesman editor, said: “Serena joins us at a great time for the New Statesman, and, building on the excellent work of recent years, she has just the skills and experience we need to help lead the next stage of our expansion as a print-digital hybrid.”

Serena Kutchinsky said: “I am delighted to be joining the New Statesman team and to have the opportunity to drive forward its digital strategy. The website is already established as the home of free-thinking journalism online in the UK and I look forward to leading our expansion and growing the global readership of this historic title.

In June, the New Statesman website recorded record traffic figures when more than four million unique users read more than 27 million pages. The circulation of the weekly magazine is growing steadily and now stands at 33,400, the highest it has been since the early 1980s.