Danny Alexander urges green businesses to "get behind" clean energy strategy

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Chief Secretary to the Treasury argues UK is now one of the best countries in the world for renewables investment, and green firms should celebrate that fact

Danny Alexander yesterday underlined the Liberal Democrats commitment to the green economy, while also urging business leaders and environmental campaigners to "get behind" the coalition government's clean energy policies.

Speaking at an event on the lessons for the wider green economy presented by the auto industry's success at cutting emissions, hosted by the Sustainability Hub group of trade associations and NGOs, the Chief Secretary to the Treasury said the coalition remained committed to the idea that "not only can we have green and growth, we must have green and growth together if our recovery is to be truly sustainable".

In comments that struck a noticeably different note to that of his colleague in the Treasury, Chancellor George Osborne, Alexander asserted that climate change presented both the "biggest long term issue facing our planet" and a huge opportunity for economic growth.

"By putting ourselves at the forefront of the future's green technologies we can produce jobs, reduce costs, and drive long term growth for our economy too," he said. "The more of our own energy we can produce to power our homes, our industries, indeed our low emission vehicles of the future too, and the cheaper and more sustainable we can make that energy, all the better for homes and businesses in our country... Green policies and long term growth can come together. It will lead to new jobs, cleaner energy, more investment and long term regeneration."

Alexander highlighted a raft of coalition policies that were supporting the green economy, including the £900m ultra-low emission vehicle programme, £11m of new Technology Strategy Board funding awarded this week to green transport R&D projects, "smart motorways" that use new surfacing techniques to optimise fuel efficiency and cut noise pollution, imminent Zero Carbon Homes standards, and the financial support the Energy Act offers to clean energy projects.

He also stressed that these measures had driven inward investment to the UK, citing Nissan's decision to locate its electric vehicle factory in Sunderland, BMW's decision to build hybrid engines in the Midlands, and Siemens recent decision to build a new £300m wind turbine factory in Hull.

"I truly believe that we should keep investing in this country in green technology, keep investing in greener energy," Alexander said. "When we were negotiating the coalition after the last election... we made absolutely clear that we wanted a Liberal Democrat at the Department of Energy and Climate Change, a Liberal Democrat at the Business Department, and a Liberal Democrat at the Treasury so we could keep treating these areas as a priority... And our support for green industries and green technology will remain a key principle for our party going into the next election and beyond."

However, Dave Sowden, chief executive of the Sustainable Energy Association, argued that while there had been encouraging progress with green policies such as the feed-in tariff and newly launched Renewable Heat Incentive (RHI), the energy and building sectors had not enjoyed the policy stability that is widely credited with helping the auto industry to cut emissions by 25 per cent over the past decade.

"[The green progress in the auto industry] has happened because it has had strong leadership, strong policy development and engagement with all parts of the industry, and that has come from the highest levels of government," he said. "It has not been a niche specialism in the Department for Transport, or in our sector the Department of Energy and Climate Change (DECC). It has not been Ed Davey fighting a lone battle on these issues in the Cabinet. It has come about because Number 10 and Number 11 Downing Street got [green] transport policy, irrespective of political colour. And I am afraid that at this stage they don't quite get energy policy."

His comments were echoed by John Sauven, executive director of Greenpeace UK, who said politicians were using energy policy as a "political football" in a way that was undermining green investor confidence. "There needs to be some consistency of message on what you are trying to achieve and what you are trying to do," he said, adding that if ministers really wanted to mobilise inward clean tech investment they needed to give a signal about how policies will develop post 2020.

But Alexander said he did not agree with the allegation that the government has chopped and changed green energy policy far more than it has changed automotive policy.

"There is a lot of rhetoric around energy policy, some of it quite unhelpful, and I think some of the ideas the Labour Party came up with were not helpful in terms of stability," he said. "But it is really important on this to look at what the policies actually are, what is being implemented, and the Parliamentary consensus that lies behind it. Our Energy Bill, the new framework in terms of contract for difference for supporting renewable energy, the large amounts of money we have put behind it through the Levy Control Framework, that gives much greater certainty.

"If you look at what is actually happening - and I mentioned the Siemens investment in Hull as just one example - on the back of the framework we now have, I think it is encouraging and it is going to drive significant investment, particularly in offshore wind, but also in other forms of renewable generation... I would respectfully suggest that you should get behind it, argue for it, and explain the benefits of it."

He also rejected the suggestion that surprise changes to policy, such as the controversial cuts to the Energy Company Obligation (ECO) energy efficiency scheme or Communities Secretary Eric Pickles' latest moves this week to oppose wind farm planning applications, were damaging confidence in the green economy.

Specifically, he promised that DECC would soon announce more details on how additional funding provided alongside the controversial changes to water down the ECO scheme would be spent to ensure emissions reductions are still delivered. "DECC will be coming out shortly with how it will use the extra money allocated to the department to encourage people to insulate their own homes, go through the Green Deal and take those steps with direct financial incentives to encourage more people to do more that more quickly," he said. "I think that may turn out to be a more effective and attractive scheme to encourage people to take up those energy efficiency measure, so I would suggest you wait to see precisely how those funds will be used before passing swift judgement."

And he suggested that the onus was now on green businesses and NGOs to focus on the positives in the low carbon policy landscape. "On energy policy I would say that at some point, part of this debate has to recognise we have a new system in place now, a system that was backed by all parties in government, a system that offers clear and stronger and more consistent financial incentives for investing in renewables than we have seen in this country for a very long time," he said. "As I talk to the industry [the Energy Act] is widely welcomed and we are seeing investments made off the back of it, and I would really urge you to get behind it and promote the UK as a place to come and invest in renewables... We should be encouraging people to invest as we have one of the best and most stable frameworks now for renewable investment around the world."

However, speaking at the same event, Labour's Shadow Industry Minister, Ian Wright, said that while there was still a broad political consensus on the huge economic opportunity presented by the green economy, that opportunity was not being fully realised because of inconsistent policies and rhetoric from the coalition.

He argued that Labour would seek to provide greater certainty for investors by backing a decarbonisation target for the power sector for 2030, reforming the retail side of the energy market, and setting out an industrial policy designed to drive green growth.

BusinessGreen was a media partner for the Sustainability Hub event, 'Green and growth: We can have both - lessons for road transport and other sectors'

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