Brown unveils £100bn green vision

By Fiona Harvey, Environment Correspondent
Published: June 26 2008 23:23
The UK’s manufacturing sector could be revived through investment in low-carbon technologies, according to government plans unveiled on Thursday.
Gordon Brown, the prime minister, set out his vision of a “low-carbon manufacturing” sector encompassing renewable energy equipment, electric and hybrid cars, aircraft that produce less carbon than today, and “green” buildings.
Mr Brown said the government’s renewable energy strategy to build 7,000 wind turbines across the country, and expand other renewable energy, such as microgeneration, tidal and wave energy, would require £100bn of investment from the private sector and create 160,000 jobs in renewables, and more in other environmental industries. The expansion of nuclear power would create a further 100,000 jobs.
An overhaul of the manufacturing sector to focus on green technology was needed to ensure that “as many as possible” of these jobs were in the UK rather than overseas.
Mr Brown said: “Building a low-carbon economy is not just something to do with climate change. It is not just an energy security issue. It is not just part of economic policy. It is all of these things and more. It is nothing less than the basis for our future prosperity.”
The new focus marks a sharp change in the government’s industrial policy, from a laisser-faire attitude towards where in the world goods are manufactured, to regarding low-carbon technology as a strategic sector.
At present, little renew-able energy equipment is manufactured in the UK but some components of such products are. China, Denmark, Germany, India and the US are all centres of wind turbine production. Experts blame problems with the UK’s renewable energy subsidy system.
Andrew Lee, general manager of Sharp Solar which operates one of the few solar panel production plants in the UK, said the simplest way for the government to encourage more manufact-urers to come here was to reform subsidies.
The plant, employing more than 500 people, produces 220MW of solar panels a year. But only 2 per cent – or one week of production – are sold in the UK. The rest are exported.
Mr Lee told the Financial Times: “Our biggest weakness at the moment is that we can’t sell our product in the UK [because the subsidies are too low to encourage consumers to buy solar panels].”
Other experts cast doubt on whether the government could encourage big manufacturers to move here.
Steve Radley, chief economist at the EEF, the manufacturers’ organisation, said: “Large manufacturers have already located elsewhere and they are unlikely to move.”
And Jonathan Johns, head of renewables at Ernst & Young, said China would soon produce more wind turbines than the whole of Europe.
He added, however, that the UK could become a manufacturing centre for other renewable energies, such as new types of solar panels, fuel cells, combined heat and power, ground source heat pumps, biomass equipment, and the design of new technologies and engineering specialised components.
Mr Brown said the renew-able energy proposals would not result in higher bills for consumers and businesses in the short term but the government has estimated bills would rise after 2015.
John Hutton, secretary for business, said he foresaw no difficulty in raising the £100bn investment needed from the private sector. “Financial institutions are saying there is no shortage of potential investment. The issue is that there is competition for investment and investors will go to where the best returns can be made. That’s where we have to close the gap with [other countries].”
Copyright The Financial Times Limited 2008