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Green Subsidy War Escalates: David Cameron Between Wind Lobby & Her Majesty’s Treasury

David Cameron has been urged to intervene in a rapidly escalating row between the chancellor and the energy secretary that threatens to derail planned reforms to the UK’s energy sector.

George Osborne has demanded that the Liberal Democrats accept a watering down of green targets as the price for sparing the onshore wind industry from swingeing subsidy cuts.

But the concession that the chancellor is offering is worth only a few million pounds a year to one part of the renewable energy industry, while his attempts to scrap key green goals could jeopardise tens of billions in investment and the creation of thousands of new green jobs, green businesses and campaigners have warned.

In a letter to the climate and energy secretary, Ed Davey, Osborne offered to allow subsidies for onshore wind to be cut by only one-tenth, rather than by a quarter as the Treasury had previously demanded. But in return, he demanded that 2030 targets for carbon emissions and renewable energy be scrapped.

The government’s climate advisers, the Committee on Climate Change, and the green energy industry regard these targets as vital to stimulate the investment needed to move the UK towards a green economy.

The row, which has been simmering for months, came to the boil over the weekend as senior Tory Tim Yeo accused Osborne of threatening the future of the UK’s energy sector – and potentially raising bills for consumers – by seeking to appeal to the rightwing Tory backbenchers who are opposed to renewable energy.

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