Coalition row brewing over lost green funding
A fresh Coalition row loomed today as it emerged that the UK is to lose out on £480m of Brussels cash for a landmark green energy project.
Speaking to PoliticsHome, Lib Dem MEP Chris Davies accused the Chancellor of breaking promises in the Coalition agreement to provide financial guarantees for carbon capture storage, which reduces emissions from coal power plants.
Lib Dems had feared that George Osborne's scepticism about green issues would scupper the UK's bid and today Mr Davies said it was "now clear that the UK has lost out on the prospect of more than [£480m] of EU funding".
"A formal announcement has yet to be made but Brussels officials are making no secret of the fact that the Government has failed to guarantee that it will provide its own funding for the selected projects," he said.
“The finger of blame for this state of affairs should be pointed squarely at George Osborne. Whatever explanations may be provided by DECC, the reality is that the Treasury has put one obstacle after another in the way of CCS development,” Mr Davies said.
He added there was “absolutely no question” that the Chancellor was behind the decision not to accommodate the EU funding.
The refusal to back the EU cash means the UK will not be receiving a tranche of money for projects, despite Lib Dem MEPs being behind the launch of the pot of money.
Mr Davies praised the previous government for backing the project and arguing for it on a European scale, saying: “I was the MEP who introduced the idea into the European Parliament, and who toured national capitals to try and win support for it.
"The UK Government was initially almost alone in backing me in the Council of Ministers, and I pay credit to Gordon Brown for winning the argument amongst his fellow prime ministers in December 2008."
He described the Chancellor’s block on the funding as a “tragedy”.
The decision is the latest in a series of rows between the Lib Dems and the Conservatives over funding for green projects, with some Lib Dems accusing the Chancellor of showing no interest in providing funding for environmental issues.
Coalition ministers are also reportedly in dispute over sweeping electricity market reforms in a bill the Energy Secretary Ed Davey is due to present to Parliament before the end of the month.
The Financial Times reports that Mr Davey wants to reinforce the bill’s incentives with a target to decarbonise the electricity sector by 2030, but is facing opposition from the Treasury.