A Cabinet row has erupted over a plan by the Chancellor George Osborne to cut the subsidy for onshore wind farms by up to 25 per cent. Tory MPs have welcomed Mr Osborne’s drive to wean David Cameron off the environmental agenda.
Liberal Democrats have accused Mr Osborne of “playing politics” in an attempt to rebuild his reputation amongst Conservative MPs after his trouble-hit Budget in March.
Nick Clegg and Ed Davey, the Lib Dem Energy and Climate Change Secretary, are fighting Treasury demands for the £400m-a-year subsidy to be cut by between 20 and 25 per cent. The Lib Dems will support a limited reduction but argue that a big cut would put billions of pounds of investment in “green energy” at risk.
Tory MPs have welcomed Mr Osborne’s drive to wean David Cameron off the environmental agenda he championed before the 2010 election, backing ther Chancellor’s argument that the economic picture has changed. More than 100 Tory backbenchers have called for the wind farm subsidies to be reduced.
A Lib Dem source told The Independent: “This is not the time to play politics. The most important thing is to give investors certainty. Many of the companies who want to invest in onshore wind also invest in offshore wind, on which Britain is a world leader, so the impact of a cut would go much wider. We are talking about billions of pounds of investment and thousands of jobs.”
Lib Dems argue that a cut in subsidies of about 10 per cent is in line with the evidence of what the industry could stand. But Mr Osborne is determined to go further in order to keep down householders’ energy bills, which fund the subsidy.