What with all the excitement over Italian courtroom dramas, not enough attention was given to a radical statement by George Osborne at the Conservative party conference. It was one of the few important pronouncements made in Manchester this week. He declared: ‘Let’s at the very least resolve that we’re going to cut our carbon emissions no slower but also no faster than our fellow countries in Europe.’ There is no mistaking his meaning. And while it might not sound like much, it was a declaration of open defiance.
Under the Climate Change Act, as it is currently structured, the government is legally bound to cut Britain’s carbon emissions by 34 per cent by the end of this decade. The rest of the EU, on the other hand, has only committed to 20 per cent. So unless the rest of the EU rapidly exceeds its target — unlikely unless their economies move from downturn to collapse — George Osborne has resolved to challenge the status quo. Any business being clobbered by green regulations harsher than those inflicted on their French or German competitors can protest, and cite this new Osborne doctrine.
The Chancellor’s detractors dismiss his talk on carbon emissions as a meaningless piece of red meat thrown to hungry Tory activists. It is not. Much of our economic stability rests on Osborne’s personal credibility. Britain retains its invaluable AAA credit rating precisely because the markets know that the Chancellor means what he says. His seven-year deficit reduction plan is moderate enough to be credible, allowing the government to borrow at a rock-bottom rate of 2.5 per cent.
But a recovery built on debt is no recovery at all. Real growth comes from tax cuts and deregulation, and if Osborne believes he cannot reduce the taxman’s burden, then he can, at the very least, rein in the bureaucrats.
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