The environmental agenda was a key part of Cameron’s attempt to revive the Tory brand several years ago when he became party leader. Highlighting the impact of climate change on the Arctic went hand in hand with his broader call to let more “sunshine” into the Conservatives.

Blue + green = nice: that was the equation. But are cracks appearing in the stance?

Some in the environmental movement are concerned that the promises may not translate into a truly green reality. Andy Atkins, executive director at Friends of the Earth, said yesterday: “We should be getting far more detailed, coherent and ambitious (environmental) policy so close to a general election.”

One source has told me that Boris Johnson has slashed the number of people working in the GLA’s climate team - although I need to confirm his claim that the total personnel has fallen from 49 to 10 (update here later I hope).

UPDATE - it’s actually fallen from 49 to 25. The GLA have sent me an email telling me how many trees Boris is going to plant in London (10,000). It says: “We are confident that we can deliver more services (from City Hall and across the GLA group) for less to improve London’s environment.”

Meanwhile another green said there was a wider frustration that many of the delivery mechanisms crucial for fighting climate change were not in favour with the Tories. For example:

1] They are determined to slash regulation, especially from Brussels. Ken Clarke’s new promise to set up an anti-red tape “star chamber” - which will remove one new rule for every new one created - is a concern among the greens.

2] Regional targets. The Tories have promised to remove Labour’s attempt to push climate change targets down from Whitehall through the regions via a target system. Weak though it was, it was seen as a step in the right direction. It just doesn’t fit into the wider Conservative agenda of localism.

3] Money. When public finances are tight and Whitehall is about to be slashed, will the environment be among the priorities for the surviving civil servants?

4] Green taxes. Favoured by environmentalists - but feared by politicians. Will Osborne risk enraging Middle England further by tilting his inevitable tax increases away from the petroleum-based economy? It looks doubtful.

So how do they reach any green targets without the machinery to push them through?

The greens are grateful that Cameron shifted his party in their direction for a few years, helping to push through favourable legislation such as the feed-in tariff for energy. I suspect (people haven’t told me this explicitly) they now fear that he will abandon them once in power.

Will tomorrow’s speech by Cam have a major green element - or anything beyond broad brush strokes? Let’s wait and see.

There’s a section at the back of the Building Britain’s Future document where Labour spells out key “deliverables” for the next decade.

Some of these are indeed likely. Others less so. Alex and I have picked out some of the more controversial ones.

2013: Budget deficit halved since 2009/10.

8/10: Yes, this is the plan - the annual deficit should be back down in four years’ time. Although the national debt will keep on rising. The distinction between the two has been the subject of a ferocious row between Ed Balls and Fraser Nelson.

2014: £16bn of asset sales achieved

2/10: I revealed on Monday that this target is based entirely on a buoyant property market. Of the total, £11bn has to come from local authorities. But the LGA says council property sales have slumped from £4bn a year to £1bn a year. (Incidentally, if councils keep the receipts, how exactly does this plug the public finances - as No. 10 seem to suggest?)

2016: 240,000 new homes provided each year, improving affordability.

4/10 Given that only about 100,000 homes will be built this year, the forecast implies a dramatic recovery in the housing market. And the mortgage market. Clearly it is possible but this is crystal ball gazing. For now affordability will only be improved by house prices falling further. You’ll notice that the BBF document doesn’t refer to the ludicrous 3m homes by 2020 target.

2017: First Crossrail trains are expected to start running.

6/10 This afternoon I spoke to Stephen Glaister, the transport expert. He has serious concerns over whether the government will be able to afford the £5bn needed to make Crossrail work. He pointed to the line in the Budget saying government investment will drop in the next five years from 3.1 per cent of GDP to 1.3 per cent. “That is a terrifying figure,” he observers.

2017: 400,000 new green jobs

2/10 When it comes to green jobs Gordon Brown likes to pluck figures from thin air. I pointed out in January that he has so far predicted 100,000 new green jobs, 140,000 and 1million. I suppose 400,000 is neither less likely nor more likely than these other random numbers.

2020: Child poverty eradicated in the UK

3/10 Unlikely. The government was supposed to halve the figure by 2010 and has signally failed to do so. That doesn’t bode well for the bigger target.

2020: 90 per cent of children leave primary school having mastered the basics in English and Maths

?/10 I sincerely hope this one will happen. But it shows a desperate poverty of aspiration. A tenth of children aged 11 still illiterate and unable to add up - celebration time!

2020: 15 per cent of all our energy coming from renewable sources

4/10 Not exactly on track. Britain is still behind almost every other EU country in producing renewable energy. Here is a reminder of Shriti Vadera’s attempts to water down the target by asking if the UK could include, um, overseas projects funded with British cash.

2010: Up to 10 new ecotowns developed

1/10 Even the DCLG’s own internal report admits that only some of the remaining ecotown proposals will survive without public subsidy. For now, at least, the project appears doomed.

A fascinating appearance by the ever-polished Lord Turner at a select committee this morning. He was discussing climate change targets in his capacity as Gordon Brown’s environment tsar.

But with Turner wanting to spend more time in his day job - as chair of the FSA - the race is on to replace him as chairman of Brown’s climate change committee.

I’m told that Rachel Lomax is the front-runner. The former deputy governor of the Bank of England (pictured above with Alan Greenspan) is seen as a safe pair of hands who won’t rock the boat too much. Lomax used to be permanent secretary at the Department for Transport and is currently a non-exec of HSBC.

Continue reading "New chair of the climate change committee"

Green campaigners were impressed when David Miliband held the environment brief. He showed some genuinely radical thinking - for example looking into the idea of personal trading allowances for carbon.

Hilary Benn made rather less of an impact.  

That makes the comments tonight from Ed Miliband - the new climate change and energy secretary - rather interesting. The younger Miliband has told the Guardian he was impressed by the “thought experiment” on personal trading allowances.

“What is very smart about this idea is transparency, the idea that we get to know what our personal carbon emissions are. I do not say that is the end of the story - that is the very important first step along the road to personal carbon allowances. As to the long-term practicalities and how it would work, I don’t know. I’ll need to commission some work on it.”

Early days then. But as signals of intention go this is a strong one.

Miliband will today   (Thursday) signal his general agreement towards the idea of raising the government’s target for cutting carbon emissions by 80 per cent (up from 60 per cent) by 2050. As recommended by the climate change committee chaired by Lord (Adair) Turner. He won’t recommend that aviation should be included in renewables targets, however.

Energy companies will pass on the cost of the £910m home improvement package announced yesterday. That much is clear from the comments of David Porter, chief executive of the Association of Electricity Producers, who said: “Whenever people impose costs on an industry, the bill to some extent always ends up with the customer.”

The new twist to this story is that the companies will be able to offset some of the expenditure against their tax bills. With corporation tax at 28 per cent, that means an effective bill of £655m rather than £910m.

Derrick Parkes, energy tax partner at KPMG, told me last night: “If I was a company I’d expect to get tax relief on this. I think they will qualify for relief on tax payments.”

Chris Sanger, head of tax policy for Ernst & Young, said he expenditure was likely to be tax-deductible because it affected revenue rather than capital and was used for the purpose of the trade.

“If it was not tax-deductible it would be an oddity of the regime,” said Mr Sanger, who advised Gordon Brown in the mid-1990s on Labour’s big windfall tax. “The logic would be that it is deductible.”

But how much cost will the companies pass on to consumers…..£655m or £910m? If the latter, would they stand to make a profit of £255m (the difference between the two)? I genuinely don’t know the answer to that.  

Leave aside the question of whether energy companies are charging too much for power. There is the separate question of the European emissions trading scheme (ETS) windfall, addressed elsewhere on this blog.

Earlier this year, Ofgem said power companies had ended up with a £9bn windfall because of a quirk in the scheme. In its second phase polluting companies must buy on average 7 per cent of the permits they need to pollute. For power companies it’s about 30 per cent.

Yet the price of electricity has risen as if companies had to pay for 100 per cent of their permits. Thus the Ofgem figure.

But the £9bn was based on carbon permits at £20 each, whereas the market price is now £25 to £30. That means MPs, unions and others who complain about the ETS windfall can now use a new figure……well north of £11bn.

You may or may not have noticed the Conservative silence during the ongoing debate about a windfall tax on energy companies. It’s not hard to imagine the internal debate at the top of the party on this one.

Attacking the idea would be sensible and confirm the party’s pro-business credentials. But supporting it could play well in Lower Middle England.  Saying nothing would give the Tories the benefit of the doubt either way.

Alan Duncan, shadow business secretary (pictured with David Cameron) broke ranks last night in a phone interview with the FT.

He told me that Labour backbenchers hadn’t stopped to think about how to impose such a levy, since many suppliers are not UK-based companies. Nor had they considered the implications for energy supply and pricing, given that companies’ long-term investment could be restrained by such a tax.

“Whipping up hatred is not a good basis for fair taxation. What matters more than retrospective taxation is properly working competitive markets, which is what [the energy regulator] Ofgem is there to bring about,” said Mr Duncan. “We are seeing old-fashioned socialist hatred converting once again into high taxation.”

I also had a word with Patricia Hewitt, business secretary from 2001 to 2005, who said a levy would be a “very bad idea” because it would be “arbitrary, unpredictable and it would undermine confidence and the climate for future investment”.

Any decision on whether pricing was unfair should be left to Ofgem, said the Labour MP for Leicester West.

Ms Hewitt said: “As a general principle i’m against windfall profit taxes”. She conceded that the first New Labour government had imposed a windfall tax: “We did, and I do think that’s the exception that was acceptable because it was made clear in that situation that privatised utilities had been under-valued at sale. We always made it clear that we were going to impose a windfall tax…to finance the New Deal for young people, there was no surprise about it.

“It was justified in my view and other people’s…but there is no equivalent situation today, and as a general rule I think windfall profit taxes are a very bad idea…In so far as there are concerns about the level of price rises , that is a matter that Ofgem should be asked to investigate to see if there are excessive price rises and whether competition is working.”

Actually, Ofgem is already investigating the energy market and will report next month.  I’m told that its staff have the powers to enter the premises of all the power companies to go through their paperwork and this has already taken place. You can presume that the recent rises will form part of the published report. There will also be an emphasis on the “vulnerable” and whether they are being helped or harmed by competition.  

In theory Ofgem can impose fines of up to 10 per cent of global turnover if it finds evidence of anti-competitive practices. Recently it hit National Grid with a £42m fine in February.

Rob Marris MP* has just denied that he will quit if the government doesn’t bring in a windfall tax.  

Here are his comments to me over the phone just now:

“It is not correct, I never said that…at least not in terms of resigning over a windfall tax. I wasn’t talking about resigning over anything. I didn’t make myself clear. I never said or indicated that I would resign over a lack of a windfall tax. My position is, a backbencher or junior MP supports his or her government depending on the policies put forward by that party. An extreme example is, if a government announced that they were going to introduce a flat rate of income tax at 20 per cent my enthusiasm for supporting a Labour government would be markedly decreased for obvious reasons.”

“My enthusiasm for remaining a pps depends on the policy. What we need, and I did make this clear, the difficulty facing the Labour government. It’s not the effect of the leadership, but of policy. We need new policies in the autumn, and I’m presuming we’re going to get these. One of these under consideration, and which I’m on record supporting, is a windfall tax, but it is not a deal breaker for me. It is not like 28 days (pre-trial detention of terror suspects), on that I supported 90 days, that is the sort of issue which raises strong views on both sides, a big issue of principle, that is the kind of resigning issue. A windfall tax is not a resigning issue and I never indicated that it was.”

* Rob Marris is MP for Wolverhampton South West and parliamentary private secretary to Shaun Woodward, secretary of state for Northern Ireland

Incidentally, the nearly-80 names of Labour MPs on the Compass petition, calling for a windfall tax….how many have already signed early day motions saying the same thing?

For starters, there are 47 Labour MPs on Fabian Hamilton’s EDM, put forward in January.  There are 35 on Lindsay Hoyle’s EDM, written in July. (He did a previous EDM on this in February, which has 30 Labour signatures). There are 48 on Desmond Turner’s EDM from June. Some MPs will have signed all of these motions.

So the question for Compass is this: How many of your names are new?

UPDATE

Okay, I’ve done the maths. About half the names - 35 by my calculation - have not already signed an EDM on this. There are also dozens of names who HAVE signed EDMs but aren’t on the Compass petition….suggesting that it has the scope to grow, maybe past 100.

So far the group tells me it has 75 on the record, plus 7 “sympathisers”, mostly pps’s, who don’t want to go public.