The CBI launched a forceful attack on the Government's green business record yesterday, accusing it of driving desperately needed investors away and urging it to underwrite costly but essential low-carbon developments.
In his most strongly critical comments of the Government to date, the CBI director-general, John Cridland, said it had "made quite a collection of mistakes" in green business policy, which have caused "my frustrations to bubble over" and potential investors to baulk at committing capital.
The UK's green business sector was worth £122bn in the year to 31 March, 2011, representing 8 per cent of GDP, according to new figures from the CBI.
The CBI predicts the green business sector has the potential to jump to £146bn a year by 2014 with the right policies, but is concerned it will only crawl up to £126bn because the Government has put off investors by changing key tax and subsidy levels.
He criticised the Government for introducing a surprise tax hike on North Sea oil last year and for attempting sudden changes to solar power tariffs at the end of 2011 in a move that was eventually quashed in court. He was also disparaging about changes to the carbon reduction commitment scheme. This was intended to persuade big companies to become more energy efficient by fining them for excessive emissions and returning the money to those taking the biggest strides towards reducing their carbon footprint. However, in October 2010, the Government said it would pocket the money instead.
The CBI is calling on the Government to introduce measures to restore investor confidence, chief among them using its balance sheet to underwrite expensive green projects, such as offshore wind farms. Such a move would encourage pension funds and other investors to back projects they are currently steering clear of, Mr Cridland said.
The Treasury declined to comment on the specific proposal, although a spokesman said "the Government has signalled its willingness to use its balance sheet to do more in terms of infrastructure".
He also pointed to the Government's commitment to putting a minimum price on emissions as an example of how it is creating a stable environment for green investment.Reuse content