From the TUC

£400m cuts at DECC?

01 Oct 2010, by in Environment

Hopefully, the Environment Secretary will be able to set out his plans for a low carbon economy at the TUC’s climate change conference on 11 October where he’s the keynote speaker. Apparently, Chris Huhne has reached an agreement with the Treasury on a four-year cuts programme for his energy & climate change department. If reports are right in today’s Guardian, DECC’s £3.2bn budget will be cut by a third. Where will the axe fall? How will they impact on green-led recovery?

Not in the nuclear area. £2bn is reserved for “managing historic energy liabilities effectively and responsibly” – the nuclear decommissioning  and other commitments. That has left £1.2bn for the Treasury to get its teeth into, including £79m for “affordable, secure and sustainable energy”, £178m for the low carbon UK programme and £11m on securing a new UN climate change agreement. £900m is spent on “procurement”. A one-third cut means DECC will lose perhaps £400m a year, or effectively £2bn over four years. In context, the Stern review called for annual expenditure amounting to 1% of GDP to tackle climate change – that’s about £14bn in the UK.

There are fears for the £60m Offshore Wind Site Development Competition, earmarked by Labour to upgrade port facilities & access in order to help attract private investment in offshore wind manufacturing. The expected expansion could generate up to 50,000 jobs. Chris Huhne has publicly stated that he is committed to the OWSDC. In the wake of the OWSDC’s announcement, Siemens and GE announced their intent to invest in manufacturing capacity in the UK – and in further discussions have indicated that the loss of this funding would be a strong deterrent to that investment being forthcoming. Instead, manufacturers would look at places where this capacity already exists – i.e. Germany and Denmark.

It looks set to be an interesting TUC conference!