Manufacturers in the West Midlands have welcomed the Chancellor’s pledge to make the UK a leader in the lower carbon economy, but believe the £1 billion allocated for a Green Investment Bank will fall short.
George Osborne confirmed the bank will go ahead in the Comprehensive Spending Review and said funding would be guaranteed by the future sale of Government assets, but green technology firms in the region are unconvinced about the plans.
Mr Osborne also said that up to £1 billion funding would go towards building one of the first power stations in the world with technology to capture and permanently store carbon emissions, to help cut greenhouse gases from electricity generation.
And £200 million will go to developing offshore wind technology and manufacturing, and support the upgrade of ports to support the industry.
Angus Norman, chief executive of Ocean Power Technologies (OPT) – a renewable energy company which has its UK headquarters in Warwick – said: “OPT welcomes the UK government’s new initiatives to encourage the development of low carbon technologies and the establishment of a green investment bank.
“Marine energy can enable the UK to achieve its renewables targets as well as become a major source of exports and new jobs over the long term.
“We believe it is therefore vital that a fair share of the new funds announced today are targeted towards marine energy if the UK is not to cede its early lead as an innovator in that sector.”
OPT is one of several companies in the region which is seen as world leading in the research of low carbon technologies. Jaguar Land Rover is also recognised worldwide for its advanced research.
The manufacturer is working on the development of sustainable technologies including hybrids and electrification. Examples include the Jaguar XJ-based Limo Green and the Range Rover Sport REHEV (Range Extended Hybrid Electric Vehicle).
And Coventry-based Modec is a trailblazer for electric-car technology and continues to expand the market for its electric zero emission vehicles.
Modec’s suppliers include Midland engineering companies such as ABT which provides the firm with chassis and Zytec, based in Lichfield, which supplies teh manufacturer with drivetrains.
Steve Radley, director of policy at EEF which represents manufacturers in the West Midlands added: “Industry will welcome critical government investments in port infrastructure and carbon capture and storage that will enable the development of low carbon industries in the UK.
“However, the current level of funding for the Green Investment Bank will not deliver the private investment necessary and we still need greater clarity on the Bank’s remit.”
EEF Midlands director, Martin Wassell, added: “There will be some relief for manufacturers that the cuts were not as bad as feared with some positive announcements in the protection of the science and education budgets and support for low carbon technologies.
“The private sector will have to play a much bigger role in the future of the economy. The statement showed the Chancellor understands the areas on which to focus, we now need the detail of how we are going to get there.
“However, for companies the suspense is not yet over and they need clarity on the Government’s strategy for growth and, in particular how it will work with the private sector to leverage investment.
“Industry has already started to increase its investment but this will only be sustained if the government sets out a clear framework for the longer-term. Further announcements in the next few weeks now assume a critical importance.”
It is hoped the Green Investment bank will fund clean energy and low carbon projects, leveraging billions of pounds in private finance.
Businesses and environmental groups have warned that some £4 billion to £6 billion is needed over the first four years of the green investment bank, from a combination of public and private sources, to ensure it has enough capital to do its job.
The Department of Energy and Climate Change will have to make savings of five per cent each year.