Former secretary of state for energy and climate change Sir Ed Davey has claimed that Britain’s green businesses would suffer if the country voted to leave the European Union.
The UK takes to the polls on 23 June to determine whether or not the country should remain in the EU, a concept which has proven increasingly divisive within both business and political circles.
With a considerable portion of energy and environmental policy confined within the EU framework, should the UK vote to leave there remains some doubt over the impact the decision would have on the energy sector.
Davey, speaking at a roundtable hosted by MHP Communications, warned that that the “threat” of leaving the EU “is greatest when it comes to energy security and climate change”.
“Losing Britain’s international influence on issues as key as energy security and climate change can only be bad for Britain’s green businesses.
“Perhaps a greener Government than the current Conservative majority could offset the damage – but who’s to say a Brexit vote won’t unleash even stronger anti-green forces in the Tory Party and across the right of British politics?” Davey said.
Central to Davey’s concerns is a perceived threat of disruption to energy investment, an element of the market which has already been beset by frequent changes to government energy policy since last year’s general election.
An energy and climate change select committee report into investor confidence concluded that government policy had damaged confidence in the UK’s energy sector, and Davey today warned of even further harm if the country voted to leave.
“Over the next few years, Brexit uncertainty will create an investment hiatus just when energy investment levels must increase. Global investors will go elsewhere, and remaining projects will cost more as investors demand higher risk premia.
“Energy investment thrives on political certainty because of the huge amounts of cash involved and because the financial returns come over a long period. If Britain votes to leave on 23 June, you’d better have a good export strategy,” he said.
Davey has echoed similar sentiments made by energy secretary Amber Rudd, who last month cited National Grid analysis stating that the cost of investment in UK energy risked rising by “several hundred million pounds” as a result of a Brexit.
The outcome of the referendum has already embroiled UK solar with the still ongoing dispute over a proposed increase in VAT on energy saving materials, first handed down by the European Court of Justice last year.
The government had been due to rubber stamp the increase, but financial secretary David Gauke announced a u-turn on the decision had been reached just a week after various Eurosceptic Conservative MPs threatened to sign a Labour amendment to the Finance Bill blocking it.
While both Gauke and Rudd are on record as ruling out an increase, earlier this week exchequer secretary to the Treasury Damian Hinds responded to a question by Green Party MP Caroline Lucas by stating that the department was still analysing responses to the consultation.
A potential Brexit is discussed at length in the next issue (22) of Solar Business Focus UK magazine, which will be published online next week.