Green letters reveal Osborne no longer understands what “pro-business” means

James S Murray
@James_BG
20 March 2012

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The Chancellor is proud of his "pro-business" credentials, but plenty of Blue Chips reckon he has got it badly wrong on the green economy

Napoleon and Josephine, Karl Marx and Friedrich Engels, Simone de Beuvoir and Jean Paul Satre, to the list of famous letter writers through history we can now add the UK's environmental movement, circa 2012.

Who said the art of letter-writing is dying out? The assorted scribes of the UK's green community have been so busy penning various missives to the Chancellor ahead of tomorrow's budget that it would not be a surprise if the Treasury's postman got signed off with a bad back.

Sadly, the wave of letters has now reached such a level that they are in danger of becoming a little counterproductive, with the salient and thoughtful points made by a wide range of parties in danger of looking like the standard self-interested clamouring of lobbyists everywhere.

But were Osborne and his aides to actually take the time to read the numerous letters sent to him relating to green issues he would find two important and politically significant trends emerging.

The first thing to note is that the level of consensus between the different groups is remarkable.

There is the general agreement that has been present amongst green businesses and NGOs for years that the green economy can deliver jobs and growth as well as emission reductions. But there is also now agreement on the need to call the Chancellor out on his short-sighted and economically counter-productive decision to characterise environmental policies as a burden, as well as a clear and growing consensus on the policies the low carbon economy needs.

Secondly, and more importantly, these letters have serious high level support.

From Shell to BT, Diageo to Microsoft, Sir Richard Branson to the TUC, influential and economically significant parties are calling on the Chancellor to think again about the prospects for green growth.

All the letters are impressive in their own way, but perhaps the most remarkable is Sunday's statement organised by the Aldersgate Group and backed by over 50 businesses and NGOs, including Aviva, BT, Cisco, Diageo, IKEA, M&S, Microsoft, PepsiCo, National Grid, RWE Npower, Siemens, Anglian Water, Philips and Grant Thornton, as well as Friends of the Earth, the Institute of Civil Engineers, Institute of Environmental Management and Assessment, the Green Building Council, RSPB, the TUC, and WWF.

It contains the kind of language and environmental thinking that a few short years ago no corporate leader would ever endorse in public, and while several of the other letters hint at Osborne's mistakes on the environment the Aldersgate letter just comes out and lists them.

"Environmental policies do not have to be a burden on business," the letter states. "Quite the reverse, well designed, smart regulation can reduce business costs and drive innovation and growth."

It might not mention him by name, but the letter makes it clear the Chancellor was wrong to deliver "recent inconsistent messages" that "have damaged the green economy by increasing the perceived risks of investments and the cost of capital", adding that the onus is now on the Treasury to deliver a "credible growth strategy" for the green economy.

The stance adopted by green businesses has now become so normalised that it is easy to forget how remarkable this intervention is. Blue chip firms and corporate titans do not, as a rule, publicly criticise Conservative Chancellors. They support the Chancellor and in return the Chancellor supports them - that is the way it has been for decades.

But here we have some of the UK's largest and most high profile firms publicly castigating Osborne for an error of judgement that they are convinced will damage the UK's economy. And this is not an isolated incident. All the other letters, many of which are also backed by blue chips and entrepreneurs from all corners of the economy, make similar points, while environmental policy represents one of the very few areas where the CBI has broken step with the Chancellor since he took up residence in Number 11.

Add in this week's YouGov survey and its revelation that the majority of people want the government to improve environmental protections and green policies and the Chancellor could be storing up a major political headache if he does not soften his anti-green rhetoric.
It is clear that Osborne is attempting to woo those backbench MPs who he hopes will one day usher him in to Number 10, but the changing nature of modern business means that he is in danger of adopting watered down green policies that run counter to what many firms, including many carbon intensive firms, actually want.

As Osborne's in-tray amply demonstrates, this most pro-business of Chancellors is singularly failing to give many businesses what they want when it comes to the green economy.