Anger over George Osborne's North Sea bid


Emily Beament
Wednesday 21 March 2012 16:00

Green campaigners have reacted angrily to the Chancellor's backing for fossil fuels, which included £3 billion in support for new drilling in the North Sea.

George Osborne gave qualified support to renewables in the Budget, describing them as a "crucial part of the UK's energy mix" but insisted he would remain alert to the costs they added to families' fuel bills.

"Environmentally sustainable has to be fiscally sustainable too," he said.

But he gave strong backing to gas, which he said was cheap and cleaner than coal, and would remain the UK's single biggest source of energy for decades.

And he said: "I also want to ensure we extract the greatest possible amount of oil and gas from our reserves in the North Sea."

He announced a series of tax changes, including £3 billion in allowances for drilling new large and deep fields in a bid to open up resources to the West of Shetland.

Exploiting the West of Shetland is opposed by environmentalists not only because would it lead to the extraction of more fossil fuels, but they fear the deep water and rough sea conditions would make a potential spill extremely hard to clean up.

Charlie Kronick, senior energy advisor for Greenpeace, said: "George Osborne has opened the flood gates to a new Klondike in the deep waters off Shetland without learning any of the lessons of the dangers this poses after the disaster in the Gulf of Mexico just over a year ago.

"Any oil spill in the west of Scotland would wreak untold devastation on some of the UK's most fragile habitat and the local economy."

Greenpeace also said the scant support for clean-tech industries in the Budget, alongside a U-turn on airport expansion in the South East and the backing for the oil industry, spelled out a polluters' charter that was bad for the environment.

WWF Scotland's head of policy Dr Dan Barlow said: "New deepwater drilling west of Shetland is just not worth the risk because we should be phasing out our use of oil not chasing ever more difficult sources.

"The Shell spill from Gannet Alpha last year showed that even in easy waters, a long experienced operator can make a total mess of dealing with an oil leak.

"Any significant oil spill in this area could present a major threat to fishing, tourism and wildlife."

He criticised the Government for handing subsidies to the "climate-wrecking" oil and gas industry, starving clean energy alternatives of much needed government investment.

Also in the Budget was a pledge to make administrative savings in the carbon reduction commitment scheme which aims to drive energy efficiency in businesses, and to replace it with an alternative environmental tax if sufficient savings could not be made.

And the Chancellor announced that combined heat and power plants would be exempt from the carbon price floor, which puts a minimum price on the permits major polluters have to pay to cover their emissions.

Friends of the Earth warned business was tiring of the Government's Jekyll and Hyde approach to developing a low carbon economy, and other countries were leaving the UK behind.

The green group's executive director Andy Atkins said: "This Budget sticks two fingers up at David Cameron's promise to build a clean future - and gives a massive thumbs down to new jobs and cutting our reliance on expensive gas and oil.

"Safeguarding our environment and growing a strong economy go hand in hand - but the Chancellor has fired the starting pistol for more roads, airports and gas power that will keep the UK hooked on costly fossil fuels for decades to come.

"The few green crumbs of comfort offered by Mr Osborne will be completely swept away by a package of policies that make this a Black Wednesday for the environment."

Energy and Climate Change Minister Greg Barker said fossil fuels were going to remain a major part of the UK's energy mix for the foreseeable future, and that exploiting North Sea resources was better than importing oil from abroad.

He said it was not a "binary choice" between fossil fuels and renewables, adding: "Particularly in the current climate, we need to drive energy independence, which is good for renewables too."

And he insisted the Budget was good for the environment, with the pro-business measures announced by the Chancellor benefiting the green economy.

"We see the green economy, the clean tech sector, which ranges from energy efficiency through to large scale renewables, as being a part of the mainstream economy and the mainstream recovery," he said.

He said clean tech was not a "cottage industry, dependent on Government subsidies", but a sector which could benefit from the wider incentives, red-tape cuts and business-friendly environment being created in UK.

Measures to simplify the carbon reduction commitment, to exempt combined heat and power plants from paying carbon floor prices - and the price floor itself which gave a commitment to creating a stable investment environment - were all good for the green economy, he said.

The Government also announced that the new "Natural Capital Committee", which aims to incorporate the value of natural assets into economic policy and advise ministers on how to protect them for the future, will be chaired by Oxford University professor and economist Dieter Helm.

He said: "This committee is a vital opportunity to bring the value of nature to the heart of Government policy.

"I was attracted by the innovative nature of the work, and look forward to the challenges it presents."

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