In forcing DECC to delay changes to renewables subsidies the Treasury is damaging the industry - Number 11 must now explain its thinking to UK Plc
To quote the great John Cleese in that peerless evocation of the British psyche, Clockwise: "It's not the despair. I can take the despair. It's the hope I can't stand." I imagine that after yesterday the renewable energy industry can relate.
For months the industry hoped that when the Prime Minister said he "passionately believed" that renewables would prove "vital to our future", he wasn't lying. They hoped that when the government said it wanted a "fast-track" review of renewable energy subsidies based on the evidence, it meant that it intended to make a fair decision swiftly. They hoped that when ministers said they had learnt the lessons of last year's solar feed-in tariff fiasco, they would bring an end to crippling policy uncertainty and U-turns. And then yesterday, they watched as the Treasury once again plunged the industry into despair.
The principle of collective cabinet responsibility that Lib Dem ministers loyally cling to prevented Ed Davey from fully explaining to a Select Committee of MPs yesterday afternoon why changes to the Renewables Obligation that were expected to be announced this week have been delayed, hinting vaguely at on-going negotiations with the Treasury.
His responses drew plenty of wry smiles, because everyone in the room knew that the Treasury has spent the past few months attempting to ride roughshod over an agreement that was reached last October between Chancellor George Osborne and former Energy and Climate Change Secretary Chris Huhne to cut subsidies for onshore wind farms by 10 per cent.
Davey declined to provide further information on the negotiations, despite the fact it is common knowledge the Treasury is refusing to sign off on the original DECC plans and is instead demanding further changes that the Lib Dems simply will not countenance. Precise details on the Treasury's demands remain unknown, but they have been described to me by several sources as both "bonkers" and conclusive proof the Treasury is not interested in either evidence-based policy making or nurturing the development of a world-leading and cost-effective renewables industry.
The Lib Dems are to be praised for pushing back against the Treasury's excessive demands, and hopes remain that an agreement can be reached soon, particularly if someone can convince the Prime Minister to actually play a constructive role in aiding a green economy he repeatedly professes to support.
But if we step back from the Westminster Village intrigue for a moment it is worth asking how bad things must have got when the Treasury is actively undermining one of the few growth sectors of the economy and is defying calls from the CBI for renewable energy subsidies to be changed in line with DECC's original proposals.
As luck would have it, yesterday afternoon I interviewed Green Party MP Caroline Lucas for a profile on her BusinessGreen Leaders Awards victory and she summarised the current madness very succinctly."It is hard to imagine who George Osborne thinks he is representing when he says that businesses see environmental policies as a burden, when you've got the CBI declaring its support for green growth," she said, voicing the frustrations of green businesses across the UK.
The answer is that he is representing a small number of around 100 backbench Conservative MPs, who are themselves representing between a fifth and third of the public in their opposition to onshore wind farms. How one of the great offices of state has been captured by such a small, ideologically motivated cabal targetting a subsidy that will cost energy bill payers a tiny fraction of the amount they are being asked to shell out to support other elements of the UK's energy infrastructure is genuinely worrying, particularly for those of us who firmly believe the green economy can only prosper if the policy landscape that shapes it is depoliticised as much as possible.
The weirdness of the Treasury's position is further amplified by the fact it is actively damaging British businesses and their growth prospects.
To paraphrase Cleese: "It is not the bad policies. Businesses can take the bad policies. It's the uncertainty they can't stand." A decision on the level of support renewable energy projects can expect to receive from next April had been expected in the Spring, but now Parliament has broken up for its summer holidays and there is still no decision. Every day that passes without a decision means further delays to projects, more jobs that aren't being created, more pressure on the UK's renewable energy and carbon targets, higher costs of capital for renewable energy developers, and more disruption to the industry's supply chain next year.
Speaking to businesses and industry groups yesterday they were torn between weary resignation and outright fury - feelings that DECC sources insisted they were all too aware of and were desperate to address as soon as possible.
How a Treasury that purports to be pro-business can inflict this crippling uncertainty on businesses is hard to comprehend. If you were a global investor interested in renewable energy (of which there are many) would you bother with trying to navigate this policy mine-field, or would you simply plough your cash into countries where support for renewables is clear and emphatic, like China, Japan, or even Ireland, which only yesterday announced plans to export renewable energy to the UK.
There can be no more excuses. There is no justification for this latest delay. This uncertainty must end.
If the Prime Minister is committed to leading the greenest government ever, delivering a cost-effective renewable energy industry, and adhering to principles of evidence-based policy-making then he must intervene and order the Treasury to back down and endorse the original DECC proposals.
If the Treasury can provide evidence that proves DECC's proposals are out of date and the renewables sector can handle deeper subsidy cuts then it must present it publicly and make a clear and robust case for further cuts. It could start by providing answers to the Energy and Climate Change Select Committee, which it is still refusing to engage with.
Equally, if the Treasury believes, against all the evidence, that it has a mandate to block onshore wind farm developments and instead deliver the UK's renewable energy targets using more expensive but less contentious forms of renewable energy then it has an obligation to make this case publicly and stop trying to sabotage the industry behind closed doors. At least then investors and developers would know where they stand and could start to make plans accordingly.
Within a matter of a few short months the wryly amusing concept of an "omnishambles" has passed into cliché, but this once again is a pure example of ideological posturing seguing effortlessly into catastrophically shambolic policy-making - and all because the Treasury refuses to either acknowledge the potential of the green economy or have the decency to explain why this growth sector is not deserving of a stable policy environment.
If other parts of the economy were being treated this shabbily there would be protests in Westminster and editorials in the papers condemning ministers' endless prevarication (it is worth noting that yesterday's fiasco came on the back of the Orwellian and politically convenient re-defining of a green tax, warnings from consumer groups that the government's flagship energy efficiency scheme will fail in its current form, predictions from McKinsey that the UK's energy saving potential will not be realised, and condemnation from MPs of the slow progress being made to measure natural capital - it has not been a good end of term for the government).
We can continue to hope that eventually the penny will drop, but until the Treasury and the Chancellor wake up to the harm they are causing we will have to brace ourselves for plenty more despair.