Osborne under global fire for ‘scaring off energy investors’
George Osborne has suffered a further blow to his credibility after global financial institutions such as Bank of America and the insurance giant Aviva accused him of driving away crucial investment in the energy sector.
On the day of the Chancellor’s Conservative Party Conference speech, investors controlling more than £1trn of assets have strongly criticised him after he removed from the Energy Bill a clause that would have made Britain’s electricity supply almost entirely green by 2030.
The group, which also includes the Hermès, Schroders and Threadneedle Investment funds and Marks & Spencer’s pension trust, says the “decarbonisation” target is crucial to financing a £110bn overhaul of Britain’s energy network.
“The UK has the potential to offer a safe harbour for renewable energy investors in Europe, but the delay in delivering a stable policy framework is weakening our prospects and holding back investment,” said Ben Warren, a partner at EY – formerly Ernst & Young – which is also part of the group.
The attack comes as the Coalition government is said to be in talks to delay the implementation of a multi-billion-pound green scheme to help take the pressure off the fuel bills. It is reported to be considering agreeing to the demands to reform the home insulation scheme, the Energy Companies Obligation.
But other investors have warned the Government must step up its commitment to the green agenda. The financial consortium is concerned that the Government has failed to signal a clear commitment to low-carbon energy, making it very difficult for potential investors to determine the risk associated with backing wind, solar and other energy projects. As a result, many are shying away from making important investments, they argue.
The uncertainty lies around the Government’s commitment to low-carbon energy centres and a decarbonisation target. This was inserted into the Energy Bill currently passing through Parliament by the Liberal Democrat Energy Secretary, Ed Davey, but was later removed by the Chancellor – although he has held out the possibility of revisiting the matter in 2016.
Today’s criticisms – put to the Chancellor in a letter – represent the first time a group of heavyweight financial institutions has publicly rebuked him over his energy policy.
The attack on Mr Osborne comes in the week after Ed Miliband shocked the Labour Party Conference by announcing a two-year freeze on energy bills should he come into power – at the same time as a pledge to create 1m jobs by decarbonising the UK’s electricity supply by 2030.
A government spokesman said: “The UK is recognised as one of the most attractive locations in the world for offshore wind investment. The reforms we’re making to the electricity market are designed to increase investor certainty further and bring forward investment in wind and other renewables.”
- 1 BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
- 2 Number of young homeless people in Britain is 'more than three times the official figures'
- 3 The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
- 4 The biggest first date turnoff has been revealed
- 5 German man found living with 300 rats in tiny apartment
BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
Isis propaganda video shows 25 Syrian soldiers executed by teenage militants in Palmyra
Number of young homeless people in Britain is 'more than three times the official figures'
Budget 2015: George Osborne to axe subsidies for higher income earners in social housing
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...