21 Jan 2013

Why is the Treasury against green growth?

It's a very interesting time to be involved in construction here in the UK. And I mean interesting not in a good way. There is a marked political divide, the like of which I have never seen before.

The majority of the construction industry, together with the Lib Dems, the Labour Party and the left pro-European side of the Tories, are in favour of promoting green growth. This is highlighted in a letter to the Chancellor from the great and the good in construction, backing Building Magazines's Green for Growth campaign. In it lurks a request to reinstate the so-called conservatory tax, a subject much covered by House 2.0 last year.

But set against them is the Treasury and the Tory right (and presumably UKIP) which calls for a scrapping of red tape, looser planning restrictions and a relaxation of the Green Belt. The state of play is well summarised by Fiona Harvey in the Guardian today (Jan 18).

Bit by bit, it seems the Chancellor George Osborne and the Treasury is picking apart the Green Growth agenda. Here is the charge list.

• Feed-In Tariffs have been drastically pruned, and in a haphazard way, creating a feast or famine scenario which, in turn, undermines confidence.
• Renewable Heat Incentive: delayed, seemingly interminably
• Part L Consequential improvements axed, despite previous assurances that "this time it will happen."
• Green Deal: funding remains unclear. And the lack of Consequential Improvements removes one of the Green Deal's main drivers.
• Display Energy Certificates: roll out blocked by Osborne
• Zero Carbon Homes: the lack of a definition, promised within weeks of the Coalition taking power, is now seriously undermining the project which was dependent on there being a target in place long before 2016 so that businesses and planners could plan.
• Code for Sustainable Homes: now under review. It too formed part of the 2016 targets
• A red tape challenge in place for the building regs which further weakens the likelihood of there being any challenging environmental targets ahead
• Energy Market Reform: slow progress is causing firms like EDF to delay/postpone investment plans
• Delaying decision on grid decarbonisation targets

Many of these items are Treasury neutral. There is no cost involved to the Government and so there is no particular reason that Osborne or the Treasury should be bothered either way. And furthermore you can easily marry much of the Green Growth Agenda with many of the Right's aims and ambitions. There is no particular reason why you couldn't both loosen the Green Belt (Right) and yet commit to zero-carbon homes (Left). Or allow 8 meter extensions (Right) and also demand Consequential Improvements (Left). Or scrap excess planning requirements (Right) yet keep Display Energy Certificates (Left). In other words, we could create a road map which could both make it easier to build (Right) and yet demand that we build to a higher standard (Left) which would involve using new techniques and materials and would make us better prepared for a world of high energy prices.

But that's not the way the Right sees it. Anything that hints at green growth is being systematically undermined or overruled, on the grounds that the extra costs involved will act as a drag on growth.

Yet one thing that the Treasury is pushing through at the moment is the Community Infrastructure Levy (CIL). It's a very significant tax on new development and it is already causing self builders and small developers to pull projects or put them on ice. Now you can argue the pros and cons of CIL, but you'd find it very difficult to defend an argument that it promotes growth in any shape or form. Quite the reverse. If ever there was a measure designed to put a dampener on housing growth, this is it.

It's hard not to conclude that Osborne and the Treasury are not so much "pro growth" as "anti green." The Treasury has become the power base of the climate skeptics and Osborne is their man. Apparently, according to an article in the Independent, Osborne has taken to calling the Green Growth Agenda lobby within parliament the Environmental Taliban. I can believe it. If you don't, take a look at these videos.

The great thing about these tactics is that no one has to come out of the closet and say they don't believe in climate change, or anything as controversial as that. All they have to do is to plant endless anti-green stories in the Mail and the Telegraph, which serve to whip up the squeezed middle, and then delay implementation of various green measures, whilst quietly dropping others. In so doing, they manage to destroy the confidence of those businesses planning to invest in the Green Growth Agenda. It's base politics, but it's very effective.

One final point today. David Cameron has had that millstone of wanting "the greenest government ever" hanging around his neck ever since he took office in 2010. Most cynics say he never meant it and that it was just an election ploy to make the Tories seem more cuddly. But there is a fascinating video of Bryony Worthington talking about how the Climate Change Act came into being and it is clear that it was Cameron's green conversion which frightened the Labour Party into putting it in place. It's around 5:30 in if you don't want to watch it all. My feeling is that Cameron probably still feels much the same now as he did then, but he's been comprehensively outmanoeuvred by Osborne.

One thing is now clear: the Treasury is being run by lizards!

1 comment:

  1. I can only see the true way forward is really hard growth. We all need to pump really very hard to get errections to the size the general public want to see.

    This may cripple the idea of eco housing but we need to get our fingers deep in the pie and hope it is still hot.