Comment: Osborne is stamping out a UK economic success story

By Richard George


The government has become ensnarled in another struggle between a prime minister and a rogue chancellor. The nation's energy supply – and arguably the future of the coalition – hangs in the balance whilst the chancellor squanders relations with his coalition partners and the wider Tory detoxification project in a desperate pitch for support from the right of his party.


It's no surprise Osborne is casting about for friends. His economic interventions are failing to deliver growth and have earned him stern rebukes from the business community. His political judgement is in doubt after the most reviled budget in living memory. Lord Ashcroft's latest polling found that he is one of our least popular politicians and that adopting his right-wing policies would be a major turn-off for potential Tory voters. Yet the chancellor continues to wade into the business of other government departments with hubristic abandon.


In opposition, Osborne complained that "when it comes to environmental policy the Treasury has often been at best indifferent and at worst obstructive". Now he has declared war on climate policy and renewable energy. He is even trying to dictate energy policy directly to Liberal Democrat secretary of state Ed Davey, with an extraordinary letter dispatched during their on-going row about on-shore wind support.


Osborne has put Davey and Nick Clegg in an unenviable position. Conceding to Osborne's demands would humiliate them and lock the UK into a high-carbon, gas-dependent energy system, in the process fatally undermining the Climate Change Act. Voters who care about the environment – which is nearly all potential Lib Dem voters – would never forgive them. But if the chancellor does not give way then the Lib Dems will need to decide whether climate change is important enough to warrant a massive show-down with the Treasury (and its backers on the Tory right).


Ironically, Osborne is trying to stamp out one of the UK's few economic success stories. The green economy accounts for eight per cent of GDP and grew by around four per cent annually throughout the recession.  Earlier this month the CBI warned that although the green economy had the potential to boost GDP by a further £20 billion and add £800 million to net exports by the end of this parliament, it was being held back by a crisis of confidence, complexity and competitiveness arising from Osborne's politicking.


For the chancellor to put his popularity with the least electable wing of his party before the interests of British jobs and workers shows poor political and economic judgement. It will alarm several of his ministerial colleagues, including William Hague, who wrote to David Cameron in May, urging him to "reframe our response to climate change as an imperative for growth" and a pathway to "an export-led recovery and for inward investment in modern infrastructure and advanced manufacturing".

Nor would Osborne's policies save people money. It has long been clear that energy bills are rising because of hikes in the cost of imported gas. Weaning the country off a fuel source which neither the International Energy Association nor Deutche Bank believe is going to become cheaper in future should be a priority. Yet the chancellor wants to turn the UK into a "gas hub". Tim Yeo, the influential Conservative chairman of the energy and climate change committee, argued on Monday that Osborne's dash-for-gas would increase fuel bills for businesses and households.

David Cameron and Nick Clegg must now get a grip on Osborne's unnecessary and infantile crusade. His meddling is driving up bills and risking billions of pounds worth of essential investment in the UK's energy infrastructure. He is at odds with mainstream economic opinion and makes the Tories look like an Oxbridge-educated Tea Party.  It is time for the grown-ups to step in and start running the show.

Richard George is a Greenpeace UK energy campaigner.

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