As Middle East conflicts cause oil prices to rise dramatically, government spells out plans for radical energy shift
|Hundreds of supporters of the Arab revolution against dictatorship|
gather at The Mound, Edinburgh, yesterday. Photograph: Steven
Scott Taylor/Universal News and Sport
Ministers will be ordered to adopt urgent measures to wean the country off oil, amid rising concern that the Libya crisis has left the economy exposed to a dramatic rise in fuel prices.
With fears growing that the cost of petrol could hit £2 a litre if instability in the Middle East persists and deepens, every government department will be told this week to comply with a new national "carbon plan" aimed specifically at "getting off the oil hook".
The energy secretary, Chris Huhne, told the Observer that the UK had no option but to speed up efforts to move away from oil. "Getting off the oil hook is made all the more urgent by the crisis in the Middle East. We cannot afford to go on relying on such a volatile source of energy when we can have clean, green and secure energy from low-carbon sources," he said. "The carbon plan is about ensuring that the whole of government is engaged in a joined-up effort to lead us into a low-carbon world."
The transport secretary, Philip Hammond, who has infuriated green groups by floating the idea of raising the motorway speed limit from 70mph to 80mph, will be told he must produce a nationwide strategy to promote installation of infrastructure for electric cars by June.
It is also expected that new deadlines will be set for building low-carbon homes, and that a firm starting date of September 2012 will be established for a new "green investment bank" to become fully operational.
The Carbon Plan will be launched this week by David Cameron, his deputy Nick Clegg and Huhne. In a tacit admission that ministers have failed so far to live up to their claim to be part of the "greenest government ever", the prime minister will, in effect, make their job security dependent on "green achievement" by demanding that those whose departments fall short of environmental targets write to him with a full explanation of what went wrong.
And in another extraordinary move, non-governmental organisations, including Greenpeace, will be asked to play a monitoring role to ensure progress across each department is maintained.
Sources have told the Observer that Clegg – unhappy that the coalition could not boast more green achievements – had recently chaired meetings with ministers in "growing frustration that some departments were not taking their green responsibilities seriously enough".
In a speech last week, Huhne warned that China was pouring money into developing a low-carbon economy while Britain lagged behind. "China will build 24 nuclear power stations in the time it takes us to build one. By 2020, their nuclear capacity will have increased tenfold," he said. "They will lay 16,000km of high-speed rail track in the time it takes us to go from London to Birmingham.
"They have the highest installed hydro-capacity and the most solar water heaters in the world. And they are forging ahead on wind power. So China knows what's coming."
John Sauven, executive director of Greenpeace UK, said that despite the initiative, which was welcome, only some in government appeared to understand the need to break free from oil. "Sadly, over at transport, Philip Hammond is still confused. Cuts to public transport, coupled with his recent proposals to raise the speed limit, appear designed to reduce fuel efficiency and increase our dependence on oil. Huhne really needs to drag Hammond away from Top Gear and force him to spend some time watching the news," he said.
The sharp rise in oil prices – to a two-and-a-half-year high – has already pushed unleaded fuel to £1.30 a litre. With the government facing growing calls for action, the chancellor offered his firmest hint yet that he would stop a planned 1p-a-litre rise in fuel duty – due to come into effect next month – in the budget on 23 March. George Osborne told the Conservative spring conference in Cardiff: "I know how hard the rises in world oil prices are hurting families in Britain. We've got another of the Labour party's preprepared rises in petrol taxes coming this April – one penny above inflation. When it costs £1.30 for a litre of petrol, £80 to fill up a family car, I know people feel squeezed. And I say this to people watching: I hear you."
In response, Angela Eagle, the shadow chief secretary to the Treasury, said that Osborne should act now to answer concerns. "People want action, not warm words, from George Osborne. He should listen to Labour's campaign and act right now to help millions of families by reversing the Tory VAT rise on petrol, which has added £1.35 to the cost of filling up a 50-litre tank. In the budget, he should look again at the annual duty rise due in April. The last Labour government often postponed planned duty increases when world oil prices were rising, as they are now."
In his address to the Tory conference today Cameron will strike an optimistic note on the economy, stressing his party's commitment to enterprise. He will say: "For Conservatives, enterprise is about more than money, more than the economics of growth and GDP. We understand that enterprise is not just about markets – it's about morals too. We understand that enterprise is not just an economic good, it's a social good."
The Carbon Plan is being published in draft form ahead of a final version in the autumn, and will be updated annually. It will be unveiled as the centrepiece of a week of "green announcements" by ministers.
The progress made by each department will be published quarterly on the 10 Downing Street website.