Prime minister defiant but concedes Green Deal faces “challenges” to appeal to the public


The prime minister has given a defiant defence of the government’s record on encouraging green growth in construction to a committee of influential MPs.

Amid concerns that divisions in government have delayed investors from building green projects, David Cameron told the House of Commons Liaison Committee yesterday that the government had to “strike the right balance” between green goals and economic goals. He said he made “no apology” for the time it had taken to find this.

He said he felt investors in the energy sector would not be put off building new low-carbon electricity infrastructure because of the government’s decision to put off setting a target for decarbonisation of the electricity grid until 2016 because investors could still get guarantees of the prices for electricity for these projects under its reforms.

However, he conceded the government’s flagship Green Deal policy faced “challenges”.

“It’s a challenge to get people to look at energy improvements for their own home,” he said. “Even when you can prove to people they will save money on their energy bill there is a hesitation so we have to find ways of getting over that.”

Chair of the Energy and Climate Change Committee Tim Yeo told Building he was pleased to hear Cameron voice a commitment to energy efficiency but was still concerned about the prospects for the Green Deal. “Everyone is holding their breath about that. It’s very important that it gets off to a good start,” he said.

Cameron also defended the current restriction on the Green Investment Bank which prevents it from borrowing until debt falls as a percentage of Gross Domestic Product (GDP).

Last week, Chancellor George Osborne said in his autumn statement that debt as a percentage of GDP is not now expected to start falling until 2016-17. It had previously been forecast to start falling in 2015-16.

Cameron said: “I would argue that the problem right now is not a shortage of borrowing it’s the shortage of [private] seed money [for projects].”