Greenpeace claim Britain now has two energy policies

Britain now has two energy policies, and one is being run out of the Treasury by the Chancellor, George Osborne, Greenpeace alleged today.

Mr Osborne is locked in a struggle with Ed Davey, the Lib Dem Energy Secretary, over the future level of Government support for wind power and future targets for “decarbonising” the economy.

The Chancellor wants a considerable watering-down of both, beyond Mr Davey’s own plans.

Mr Osborne is thought to be responding to long-standing Tory back-bench dissatisfaction with green energy subsidies.

But the scale of his intervention now means he is running a parallel energy policy of his own, which is incompatible with that being pursued by Mr Davey's Department for Energy and Climate Change (DECC), said Ruth Davis, Greenpeace’s Chief Policy Adviser.

“It is now open war between the Chancellor and DECC,” Ms Davis said today.

“The Chancellor is running an alternative energy policy out of the Treasury. There are now two totally parallel and incompatible energy strategies being pursued.”

It emerged at the weekend that Mr Davey has been told by Mr Osborne that cuts in support for windpower can be kept down as long as Mr Davey keeps a firm target for greening power generation out of the forthcoming Energy Bill.

This was “demonstrable blackmail by the Chancellor,” Ms Davis said.

She went on: “If the Lib Dems cave in to Osborne and his very public blackmail it will be a massive blow to their credibility, as they established their credentials on the basis of their green concern.

“To have a Lib Dem minister kicked across the playground by the Chancellor would be a massive public humiliation.”

Mr Osborne has been the clear leader of the faction in the cabinet seeking to lessen the Government’s environmental commitments in the name of encouraging growth, and in October last year Mr Davey’s Lib Dem predecessor, Chris Huhne, attacked him publicly for vowing that the UK should not lead Europe in its efforts to cut carbon emissions.

While the Chancellor had said at the Conservative Party conference that "We're not going to save the planet by putting our country out of business," Mr Huhne said in a subsequent speech: "We are not going to save our economy by turning our back on renewable energy."

And to Mr Osborne's complaint to the Tory faithful, at the Manchester conference, that "Britain makes up less than 2 per cent of the world's carbon emissions to China and America's 40 per cent," Mr Huhne said: "Yes, the UK is only 2 per cent of global carbon emissions. But if we grasp the opportunity now, our businesses and economy can be much more than 2 per cent of the solution."

Mr Davey has not yet been as openly robust as Mr Huhne in his disagreements with the Chancellor.