BCC: ‘Blinkered’ green backing could hurt growth

BRITAIN should end its “blinkered” backing for green energy to kick-start a private sector-led economic recovery, a leading British business body has warned the Chancellor.

The BCC says wind farms, such as this one near Cowdenbeath, are not the answer to energy security. Picture: Getty
The BCC says wind farms, such as this one near Cowdenbeath, are not the answer to energy security. Picture: Getty

The British Chambers of Commerce (BCC) is understood to have told George Osborne, ahead of his key Government Spending Review on 26 June, that spending on the country’s infrastructure is vital if businesses are to take up the slack as public spending is slashed.

BCC director-general John Longworth’s comments came after the group upgraded its GDP growth forecast last Friday from 0.6 per cent to 0.9 per cent for this year, from 1.7 per cent to 1.9 per cent in 2014, and from 2.2 per cent to 2.4 per cent in 2015.

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Ahead of the publication on Wednesday of the BCC’s detailed submission to Osborne, Longworth said of Britain’s apparently better UK economic prospects: “It’s good, but not good enough.”

The BCC boss, a key spokesman for Britain’s small and medium-sized companies, repeated that the body backed the government’s austerity programme to restore sustainable public finances.

But he said that a “reorientation” to stimulate business and create jobs was also necessary, citing the need for a proper policy on energy security.

“Green energy, natural renewables like wind and waves, will only ever represent 5 to 10 per cent of energy production in the UK. It’s fundamentally important for the UK economy and consumers that we have a proper energy security policy,” Longworth said.

“We want to be able to guarantee the lights won’t go out, the transport system won’t break down and factories close down.”

He said that this would be best achieved through using a mix of energy sources, including renewables, nuclear, coal and gas. Longworth added: “But there’s almost a blinkered focus on one small course of energy. We have to get real about this issue. Otherwise we will export energy production, jobs and carbon emissions to the likes of Asia. The UK needs a long-term energy security policy, rather than just a green policy.”

His comments came as a report is due to be published this week claiming British businesses could save £40 billion by focusing on a “dash for gas” rather than pressing ahead with investing in green and nuclear energy.

Consultancy AT Kearney claims Britain could still meet its carbon emissions targets by increased investment in gas.

The BCC has also impressed on the Chancellor the importance of improvements to Britain’s infrastructure in restoring confidence to businesses. It is understood to have specified roads, rail, aviation, seaports, but also targeted “digital infrastructure in a knowledge-based economy like the UK”.

Longworth said: “We would like a refocus on measures to create confidence in businesses. I’m not sure he [Osborne] is in purely cutting mode.”

He said given Britain’s economic plight it was odd that overseas aid was, along with health and education, ring-fenced from spending review cuts.

Longworth said: “It’s bizarre to me that the Chancellor might want to cut science, university and technology spending … and retain overseas aid.

“The amount of money necessary to stimulate a knowledge-based economy is minor compared to the amount the government spends on overseas aid.”