Osborne's anti-green agenda is strangling growth

The government's refusal to commit to a decarbonisation target is preventing the creation of tens of thousands of manufacturing jobs.

With growth in the British economy so anaemic, you would have thought George Osborne would welcome it wherever it could be found.  Particularly in the manufacturing sector, whose weak performance in recent years has kept the UK stuck in trade deficit. Yet this week the Chancellor stands accused of actively preventing the creation of tens of thousands of British manufacturing jobs. 

The charge is levelled in an extraordinary letter sent to Osborne (along with Business Secretary Vince Cable and Energy Secretary Ed Davey) by six of the world’s largest energy manufacturers. These companies – Alstom, Mitsubishi, Doosan, Areva, Vestas and Gamesa – between them already employ over 12,000 people in the UK. For the past few years they have all been developing investment plans, collectively worth hundreds of millions of pounds, to build factories in Britain to supply the country with low carbon energy equipment, in fields such as offshore wind, nuclear power, energy efficiency and carbon capture and storage. But in their open letter they warn that these investments, and the jobs they will create, will not go ahead if the government does not commit to a long-term low carbon electricity target in its Energy Bill now passing through Parliament. And it is no secret that it is Osborne who is blocking that commitment. 

Energy policy can be an arcane affair, but this issue is pretty straightforward. Since Labour’s pioneering Climate Change Act in 2008, UK energy policy has been on a long-term trajectory to cutting greenhouse gas emissions by shifting supply towards renewables (particularly wind), along with some nuclear, and gas fired power stations fitted ultimately with carbon capture and storage.  As a result, global manufacturers in these fields have been looking to build factories in Britain to supply the required equipment – with at least six companies developing sites on the east coast to manufacture offshore wind turbines alone. But over the last six months uncertainty has suddenly crept in, putting these investments at risk. And the reason is Osborne.

At present the UK only has an energy policy out to 2020. But investors need a longer timeframe than that – anything they plan now will barely be in operation by then. So the policy they are calling for is a legal limit to the emissions which the electricity sector will be allowed by 2030. This will give certainty to energy companies and their suppliers about the technologies to be installed. There is remarkable unanimity around the need for such a ‘decarbonisation target’ – last month 35 companies, NGOs and other organisations signed a joint statement in support.  It is well known that Ed Davey, the Lib Dem Energy Minister, wanted such a target in the Energy Bill, but Osborne objected. Hence the very pointed addressing of the letter from the six global manufacturers this week to the Chancellor as well as to Davey.

The wider context here is rather remarkable. The British economy now produces far more jobs in green industries than it does in brown or dirty ones. Last year the CBI produced a report, The Colour of Growth, estimating that over a third of the UK’s economic growth in 2011-12 came from green business. Now worth £122bn annually to the UK economy, the environmental sector has been growing (despite the recession) at over 2 per cent a year for the last five years. It employs just under a million people and is taking an increasing share of a rapidly growing global market, so also reducing Britain’s trade deficit.  These facts have in turn made CBI into a rather remarkable cheerleader for stronger environmental policies. 

So why is Osborne setting himself against one of the few job-creating sectors of the otherwise flatlinng British economy? (He has also interfered to obstruct new regulations enduring that new homes are low-carbon.) The answer appears to be entirely political.  Fired up by rural opposition to onshore windfarms and a more general anxiety about rising energy bills, and backed by an increasingly strident campaign in the Daily Telegraph and Daily Mail, a revolt against low carbon policy has developed among a number of backbench Tories, and it’s their support that Osborne is now after. 

His alternative energy policy is the so-called ‘dash for gas’. In the US the exploitation of cheap shale gas has revolutionised energy supply, displacing coal, and this has led to hopes that the same might happen in the UK.  But there is no evidence that we have anything like the reserves found in the US, and being part of a competitive European market there is no guarantee that they would be cheap. On the contrary, a report by the IPPR last week showed that relying on volatile gas markets would cost the economy more than the decarbonisation target if gas prices rise in line with market expectations – and much more if gas prices are higher.  It is high wholesale gas prices which have been responsible for almost the entire rise in energy bills over recent years, not green policy.

But Osborne is now under pressure.  For the Tory chairman of the environment select committee, Tim Yeo, has tabled an amendment to the Energy Bill inserting a 2030 decarbonisation target. Labour have committed to supporting it. Now six Liberal Democrats, defying agreed Coalition policy, have done the same, with the party’s president, Tim Farron, indicating that he too will vote for it.  It will take only a few more Lib Dems to break ranks in support of their own party policy and the government will be facing defeat.  

This may come down to the increasingly abrasive relationship between Nick Clegg and David Cameron.  Buoyed by the Eastleigh by-election, the newly assertive Lib Dem leader faces intense pressure from his own party to tell Cameron that he must finally make good on his tattered promise to lead "the greenest government ever". But in doing so the Prime Minister knows that he would have to defeat his own Chancellor. 

George Osborne wears a high visibility jacket as he makes a visit to the Prysmian Group factory in the constituency of Eastleigh. Photograph: Getty Images.

Michael Jacobs is visiting professor in the Department of Political Science / School of Public Policy at UCL and at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics. He is co-editor of the Political Quarterly

Photo: Getty
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The UK press’s timid reaction to Brexit is in marked contrast to the satire unleashed on Trump

For the BBC, it seems, to question leaving the EU is to be unpatriotic.

Faced with arguably their biggest political-cum-constitutional ­crisis in half a century, the press on either side of the pond has reacted very differently. Confronting a president who, unlike many predecessors, does not merely covertly dislike the press but rages against its supposed mendacity as a purveyor of “fake news”, the fourth estate in the US has had a pretty successful first 150-odd days of the Trump era. The Washington Post has recovered its Watergate mojo – the bloodhound tenacity that brought down Richard Nixon. The Post’s investigations into links between the Kremlin and Donald Trump’s associates and appointees have yielded the scalp of the former security adviser Michael Flynn and led to Attorney General Jeff Sessions recusing himself from all inquiries into Trump-Russia contacts. Few imagine the story will end there.

Meanwhile, the New York Times has cast off its image as “the grey lady” and come out in sharper colours. Commenting on the James Comey memo in an editorial, the Times raised the possibility that Trump was trying to “obstruct justice”, and called on Washington lawmakers to “uphold the constitution”. Trump’s denunciations of the Times as “failing” have acted as commercial “rocket fuel” for the paper, according to its CEO, Mark Thompson: it gained an “astonishing” 308,000 net digital news subscriptions in the first quarter of 2017.

US-based broadcast organisations such as CNN and ABC, once considered slick or bland, have reacted to Trump’s bullying in forthright style. Political satire is thriving, led by Saturday Night Live, with its devastating impersonations of the president by Alec Baldwin and of his press secretary Sean Spicer by the brilliant Melissa McCarthy.

British press reaction to Brexit – an epic constitutional, political and economic mess-up that probably includes a mind-bogglingly destructive self-ejection from a single market and customs union that took decades to construct, a move pushed through by a far-right faction of the Tory party – has been much more muted. The situation is complicated by the cheerleading for Brexit by most of the British tabloids and the Daily Telegraph. There are stirrings of resistance, but even after an election in which Theresa May spectacularly failed to secure a mandate for her hard Brexit, there is a sense, though the criticism of her has been intense, of the media pussy-footing around a government in disarray – not properly interrogating those who still seem to promise that, in relation to Europe, we can have our cake and eat it.

This is especially the case with the BBC, a state broadcaster that proudly proclaims its independence from the government of the day, protected by the famous “arm’s-length” principle. In the case of Brexit, the BBC invoked its concept of “balance” to give equal airtime and weight to Leavers and Remainers. Fair enough, you might say, but according to the economist Simon Wren-Lewis, it ignored a “near-unanimous view among economists that Brexit would hurt the UK economy in the longer term”.

A similar view of “balance” in the past led the BBC to equate views of ­non-scientific climate contrarians, often linked to the fossil-fuel lobby, with those of leading climate scientists. Many BBC Remainer insiders still feel incensed by what they regard as BBC betrayal over Brexit. Although the referendum of 23 June 2016 said nothing about leaving the single market or the customs union, the Today presenter Justin Webb, in a recent interview with Stuart Rose, put it like this: “Staying in the single market, staying in the customs union – [Leave voters would say] you might as well not be leaving. That fundamental position is a matter of democracy.” For the BBC, it seems, to question Brexit is somehow to be unpatriotic.

You might think that an independent, pro-democratic press would question the attempted use of the arcane and archaic “royal prerogative” to enable the ­bypassing of parliament when it came to triggering Article 50, signalling the UK’s departure from the EU. But when the campaigner Gina Miller’s challenge to the government was upheld by the high court, the three ruling judges were attacked on the front page of the Daily Mail as “enemies of the people”. Thomas Jefferson wrote that he would rather have “newspapers without a government” than “a government without newspapers”. It’s a fair guess he wasn’t thinking of newspapers that would brand the judiciary as “enemies of the people”.

It does seem significant that the United States has a written constitution, encapsulating the separation and balance of powers, and explicitly designed by the Founding Fathers to protect the young republic against tyranny. When James Madison drafted the First Amendment he was clear that freedom of the press should be guaranteed to a much higher degree in the republic than it had been in the colonising power, where for centuries, after all, British monarchs and prime ministers have had no qualms about censoring an unruly media.

By contrast, the United Kingdom remains a hybrid of monarchy and democracy, with no explicit protection of press freedom other than the one provided by the common law. The national impulse to bend the knee before the sovereign, to obey and not question authority, remains strangely powerful in Britain, the land of Henry VIII as well as of George Orwell. That the United Kingdom has slipped 11 places in the World Press Freedom Index in the past four years, down to 40th, has rightly occasioned outrage. Yet, even more awkwardly, the United States is three places lower still, at 43rd. Freedom of the press may not be doing quite as well as we imagine in either country.

Harry Eyres is the author of Horace and Me: Life Lessons from an Ancient Poet (2013)

This article first appeared in the 20 July 2017 issue of the New Statesman, The new world disorder