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George Osborne loosed his most strident rhetoric yet against environmental regulation in his autumn statement, slamming green policies as a "burden" and a "ridiculous cost" to British businesses, in a fillip to the right wing of his party.
In a clear attempt to redirect the coalition's green policies, the chancellor told parliament: "I am worried about the combined impact of the green policies adopted not just in Britain, but also by the European Union … if we burden [British businesses] with endless social and environmental goals – however worthy in their own right – then not only will we not achieve those goals, but the businesses will fail, jobs will be lost, and our country will be poorer."
Osborne gave £250m worth of assistance and rebates to the most energy-intensive companies, scrapped a planned rise in fuel duty, announced a massive road-building scheme and hinted at a watering down of regulations to protect British wildlife.
Environmentalists may have gained some cheer though from the promise of £1.4bn for new railways and rail improvements, including the electrification of the transpennine express and new route linking Oxford, Milton Keynes and Bedford, as well as the re-announcement of last week's £200m for the "green deal", the flagship policy to give households access to insulation.
But his statement was notably light on references to the green economy or the job-creating potential of industries such as renewable power. Green businesses warned that the combination of strong anti-green rhetoric and a lack of commitments to low-carbon industries risked scaring off investment in key new business sectors.
Gaynor Hartnell, the chief executive of the Renewable Energy Association, said: "It makes strategic sense to invest in renewables, to help pull the UK out of the doldrums, yet the autumn statement lacks any specific new measures. There is certainly no evidence of the 'ruthless' focus on renewable energy called for by Nick Clegg when he spoke at the LSE earlier this year - quite the opposite - the policy uncertainty across almost every aspect of renewables is draining investor confidence."
Paul King, the chief executive of the UK Green Building Council, said: "This was an opportunity missed to put green growth and green jobs at the heart of economic recovery."
Conservation groups were alarmed by the chancellor's threat to water down some of the regulations on protected habitats for wildlife and plants, by reviewing the implementation of the EU habitat and wild birds directive between now and next March. Osborne said: "We will make sure that gold-plating of EU rules on things like habitats aren't placing ridiculous costs on British businesses."
Martin Harper, conservation director at the RSPB, said: "The chancellor's attack on vital environmental regulation is below the belt and shows how short-sighted his policy for growth is. These regulations [introduced under a Conservative government] have been in place for 17 years and they have not been a brake on development."
Countryside campaigners also attacked the chancellor's plans for a major expansion of the UK's road network. Ralph Smyth, of the Campaign to Protect Rural England, said: "These new plans to build old road schemes have clearly been picked off a dusty shelf without time for much thinking. A return to building new roads in the name of job creation will lead to more traffic, move bottlenecks along rather than solving them, often at an irrevocable cost to the local environment. The idea is sadly all too characteristic of a chancellor who has shown little concern for protecting our countryside."
But the chancellor's new policy direction was applauded by other sectors of industry, including those representing the heaviest users of energy. Introducing measures to give £250m in rebates to energy-intensive industries, Osborne said: "I am worried about the combined impact of the green policies adopted not just in Britain, but also by the European Union, on some of our heavy, energy-intensive industries. We are not going to save the planet by shutting down our steel mills, aluminium smelters and paper manufacturers. All we will be doing is exporting valuable jobs out of Britain."
Terry Scuoler, chief executive of the manufacturers' trade body EEF, said: "This package is welcome recognition of the significant competitive pressures facing energy intensive companies and should go a long way to address them. Government must build on this by sending a signal to companies looking to invest here that it will maintain this package beyond the current spending review period."
The campaigning organisation Sandbag said many of the companies that benefitted from the chancellor's easing of carbon regulations were the same that had pocketed free carbon permits worth hundreds of millions of pounds in the last few years under the EU's emissions trading scheme.
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