Future is low carbon in Government's new industrial strategy

‘Building Britain’s future – New Industry, New Jobs’, which was launched at Loughborough University in Leicestershire by the Prime Minister Gordon Brown, outlines a strategy which aims, not just to help UK businesses out of the current recession, but to ensure they are in a position to compete in the global market once the upturn comes. One of the themes of the report is that there should be an overall Government strategy for the UK economy that encompasses and integrates all Government departments.

Relatively few of the 34 pages of the policy statement make explicit mention of green issues, but there is an underlying assumption throughout the document that the future for the UK economy has to be low carbon. Improving resource efficiency is seen as central to exploiting the UK’s existing strengths and competitiveness – as is the need to keep in the vanguard of technological change, including green technologies.

One of the specific areas the policy statement does address at some length, however, is the structural transformation required in the way we generate and use electricity. It acknowledges that the Government has a key role to play in setting the policy framework and providing some of the incentives that will drive this transformation.

It promises this summer to deliver “a clear programme for adapting Britain’s energy grid to link homes and businesses to the new forms of power generation, including renewables and nuclear, and for helping them reduce their energy demands.”

Interestingly, it acknowledges that “clear incentives to produce and use renewable energy, along with action to facilitate installation sites and support for research and development, have given Denmark and Germany a head start in a number of renewable technologies.” It says it needs to learn from this.

In particular, it says there is an obligation on Government to send “clear and transparent signals of its strategic intentions where these will inevitably shape the long-term investment decisions made by businesses.” This is clearly especially important in areas where large initial investments are required – for example, for a number of renewable energy technologies such as low carbon vehicles, wind and wave power and nuclear power generation.  

The Government has come in for a considerable amount of criticism in recent weeks and months for failing – as some see it – to put its money where its mouth is in support of the renewable energy industry. Today it was criticised by the leading UK solar power company Solarcentury for "sleepwalking to a green tech job loss disaster of its own making", while, last week for example, a report from the Institute of Public Policy Research warned that an opportunity to create up to 70,000 jobs could be lost through lack of Government support for the offshore wind industry. Interestingly, that report recommended that the UK Government learned from countries such as Denmark, Spain and Germany – some of the same countries the Government now admits it can learn from.

In its summary, and as one of its ‘key next steps’, the report promises that the Government will set out detailed proposals to help businesses make the most of a low carbon future. It promises to tackle the “key barriers to growth” in the UK’s low carbon sector, aiming at “a coherent approach at both national and regional levels”  – one of the overall themes of the document is that the right balance should be struck between central Government and the bodies that deliver industrial policy in the nations, regional and local communities.

The summary also reiterates the strategy for promoting electric cars launched by Business Secretary Peter Mandelson and Transport Secretary Geoff Hoon last week.

Commenting on the Government’s new industrial strategy today, Mr Mandelson said: "To succeed in this hi-tech, low carbon economy of the future, to drive growth and to secure more high-value jobs in the UK, we need to act. It's not about picking winners or ignoring market signals but removing barriers which hold business back.

“Britain has the skills, resources and knowledge base to do well but the Government's job is to do everything it can to strengthen our competitive position further. It's about creating the best possible conditions in which UK businesses can thrive; removing barriers to success and offering targeted support to unlock new potential in existing and new technologies."