Content Coms’ view on what the Conservative majority might mean for UK business
The forthcoming Parliament spells new promises, hopes and fears, especially for firms tasked with delivering a greener, more efficient UK. Giles Crosse – our ‘green business’ expert – examines the challenges and opportunities.
The impacts of an EU referendum
Britain’s once unimaginable departure from the EU, the so called ‘Brexit,’ is now a stone cold possibility. A referendum is going to happen sooner rather than later, perhaps by 2016. The Confederation of British Industry (CBI) estimates the net benefit of our existing EU membership to be five per cent of GDP, some £62-79 billion per year.
Passing up such riches could be the stuff of nightmares. Whatever your stance on the EU, both the value of trade and Environmental Directives have redefined our business landscape. Energy efficiency in buildings, smart tech, renewable power; all have come under Europe’s gaze.
Voting on Europe carries vast risk. There is no way anyone can predict whether we will leave the EU until the vote is cast. We can’t tell how we might leave, yet comply with EU trade and environmental regulations to stay in business in Europe. Could we hammer out better business terms and remain a member instead?
But the pre-poll debate alone, where Cameron battles with EU leaders over potential spoils and benefits, to use as a bargaining tool with the British people, is likely to undermine stability for UK businesses. It could polarise countries and destabilise forthcoming climate change negotiations at COP21 in Paris too.
On the ground, all of this will make it tougher for UK firms to guarantee loans on new tech development for example, especially in the sustainable sphere. The uncertainty could nullify longer terms deals into Europe.
No matter what the end result, the prospect of such bickering is unsettling for businesses, especially those reliant on EU suppliers and buyers. It is very hard to see any sure way of insulating against the risk.
If we leave the EU, an overhaul of virtually every policy on environment and energy could be on the cards. If we stay, will the infighting have bred an air of mistrust, and frightened off once warm European partners?
Conservative promises on environment and business
At home, David Cameron now has the majority, in theory, to push through the vision he desires. But his advantage is thin and vulnerable to climate change-sceptic backbenchers, who may scupper eco-positive policies.
Cameron’s exact promises are here, in the Party’s 2015 manifesto. It is not all good news, and most is lacking in concrete detail.
When it comes to decarbonising power, the Tories will cut emissions as cost-effectively as possible, and will not support additional distorting and expensive power sector targets. Without targets, swift progress towards decarbonising UK electricity supplies is unlikely.
£500 million is to be set aside over five years to ensure almost every car and van is a zero emission vehicle by 2050. £300 million will go towards cutting light pollution from new roads. This could support new tech or efficient lighting, but details on the spend aren’t yet available.
Cameron will halt the spread of onshore wind farms and public subsidies for them, undermining wind firms and the supply chain in rotors, gear and tech. Then again, he will ensure every home and business in the country would have a Smart Meter by 2020, delivered as cost-effectively as possible. Smart tech firms, installers and suppliers take notice.
The Conservatives will push for a strong global climate deal in Paris that keeps the goal of limiting
global warming to two-degrees, and will support the UK Climate Change Act. These promises are hardly ground breaking, but a move to deny two degree science would have been disastrous.
More fuzzy pledges seek to provide start-up funding for promising new renewable technologies and research, but only give significant support to those that clearly represent value for money. The term ‘value for money’ remains woolly, but it likely hints at tougher criteria to actually win any cash.
Safe development, whatever that means, on shale gas will be supported, as will North Sea oil and gas.
More promises offer low-cost measures on energy efficiency, with the goal of insulating a million more homes over the next five years.
A future of promise?
It is too early to say exactly what the new Government might mean for UK business or the Green Economy. It is clear that lack of clarity on Europe cannot be good for business in any shape or form.
More positively, Amber Rudd’s confirmation on Monday as Secretary of State for Energy and Climate Change has been welcomed by green businesses. Rudd has previously called climate science ‘compelling’ and has previous experience as Climate Change Minister.
Uncertainty has surrounded the ongoing role of the Department of Energy and Climate Change (DECC). Tom Burke, former director of Friends of the Earth and chairman of the E3G sustainable development charity has hinted it might be scrapped in cost saving exercises. Rudd’s appointment must at least make DECC’s survival more likely.
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