Osborne: we will pay people to recycle

Shadow Chancellor unveils Tory plans for 'green economic recovery'

The Treasury would implement radical measures to ensure a "green recovery" if the Conservatives win the general election, George Osborne will pledge today.

The shadow Chancellor will promise that the public would be "paid" to recycle their rubbish to keep down landfill costs; the Government would cut its own carbon emissions by 10 per cent in its first year; set up a "green investment bank" to finance green technology firms and create "green ISAs" so savers could invest tax-free in environmentally-friendly industries.

Mr Osborne's speech in London is designed to reassure environmental groups who fear David Cameron has cooled on the green agenda he championed after becoming Tory leader.

He will pledge to expand American-style schemes to give householders a financial incentive to recycle. In a pilot scheme run by Windsor and Maidenhead council, the average family is on course to receive vouchers worth £130 a year.

Writing in The Independent today, Mr Osborne says the Treasury "has often been at best indifferent and at worst obstructive" on the environment. It must become part of the answer instead of part of the problem, he says, adding: "Instead of the Treasury blocking green reform, I want a Conservative Treasury to be in lead of developing the low carbon economy and financing a green recovery."

The Tories say the Treasury would take charge of enforcing government's most ambitious target for reducing its own emissions. Departments would see their energy budgets cut if they did not deliver.

The 10 per cent reduction would save up to £300m a year in energy costs. Companies such as BT, Tesco and B&Q have pledged to advise an incoming Tory government on how to achieve the target.

Yesterday, the leaders of the three main parties competed for the business vote when they addressed the annual conference of the Confederation of British Industry in London.

Gordon Brown said it would be too dangerous to switch off the "life support" for the economy through fiscal stimulus. He mocked the Tories' conversion to a "go for growth" strategy as a "soundbite without substance".

Mr Cameron said his administration would be judged on whether it got Britain out of its economic mess. "If we build lasting and sustainable growth and deal with the deficit, we will be a success. If we don't, we won't," he said.

Nick Clegg, the Liberal Democrat leader, said the public was being presented with a "false choice".