The Chancellor tells us how it is on climate change policy

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I must say, it should be an interesting first Cabinet meeting, when Osborne and Huhne face each other, following on from setting out their positions on climate change policy from very different angles.

The Chancellor's intervention into reality is welcome relief to a manufacturing sector that can deliver on low carbon innovation, but, as he says, “a decade of environmental laws and regulations are piling costs on the energy bills of households and companies”. George Osborne has hit the nail on the head by stating clearly, “We're not going to save the planet by putting our country out of business”.

Globally we have a major problem, we need to reduce the concentration of carbon in the atmosphere and we need to make this happen sooner than we all realise. To achieve this aim, we need to accept that manufacturers will provide much of the low carbon solution.

Even Chris Huhne knows this to be true, as he envies the Chinese, installing wind turbines across the South China Sea, building 28 nuclear power stations in the time it will take us to build one and building 10,000 miles of high speed rail. All three of these projects have Energy Intensive Industries (EII) at the very heart of them.

Raising costs to EII in the EU by increasing our 2020 target will not “represent a real incentive for innovation and action in the international context” as Huhne said in 2010. We believe that what makes good business sense is, providing the right incentives and business environment so that investment in low carbon technologies takes place here in the UK and not in regions of the world that are not subjected to the same levels of policy costs that our EII are experiencing today.

An example close to home is that climate change and environment taxes for EII in the UK are four times that of Germany. How does this encourage multinational companies to choose the UK as the place to invest.

The Chancellor's view that we should not be going faster than the rest of the EU in setting targets, is the right one. We need to lead by example, yes, with that example showing that we lead on innovation, support and success, not on who can set the highest costs to meet our much needed targets.

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Director of UK Steel

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