Ministers have delayed plans to axe Government subsidies for wind farms after another disagreement between the Conservatives and the Liberal Democrats. The Government was poised to announce a 25 per cent cut in wind farm subsidies today after warnings from George Osborne that the taxpayer support was too generous.
The planned deal, phased in over several years, also involved a system of community grants to encourage wind farm development in some areas as part of a “complex package”. Sources claim that Ed Davey, the Climate Change Secretary, agreed in principle with the cuts — far greater than the 10 per cent reduction initially proposed by a Government review.
Campaigners had warned that the cuts would “sound the death knell” for British wind farms. Onshore wind farms will this year receive about £1 billion in Government subsidies.
An announcement was due to be made today but Nick Clegg is thought to have removed Liberal Democrat support for the scheme yesterday. Another compromise deal is being negotiated, which will be announced in the autumn, along with a new gas strategy to replace some wind generation.
A Conservative source said: “We are prepared to play this long. Energy policy is absolutely critical and the Chancellor was not happy with what was ultimately on the table.”