The Corner

Connect the Dots

In David Cameron’s Britain, the taxpayers and their money are soon parted. The Spectator comes up with yet another example:

The government’s desire for a ‘green economy’ has become such an obsession that it has begun to override common sense. This week, the Department for Energy and Climate Change invited bidders to apply for £1 billion of public funding for a commercial-scale carbon capture and storage project. The money will be used, we are told, to extract carbon dioxide from the chimneys of a large power station, condense it and pump it 150 miles out into the North Sea to be buried in the chambers of an empty oil well.  The department justifies this expenditure by claiming that by the next decade carbon capture will be an industry worth £6.5 billion a year to Britain. It is a preposterous figure, quoted by officials without any suggestion as to how it was arrived at.

 If anyone outside government really believed that carbon capture was a viable business proposition there would be plenty of private investors wanting to risk their money on it. But there is scant sign of that. There are already more than 50 demonstration projects in action around the world, some dating back to the mid-1990s. And they all have one thing in common: they have been established thanks to big government handouts.  If the idea of a £1 billion subsidy for a carbon capture project sparks a sense of déjà vu in any readers, it is not without reason. In 2007, the then Labour government launched a similar competition, estimating that it would cost between £500 million and £700 million to set up a carbon capture plant. By 2010, when George Osborne increased the public money available to £1 billion in his comprehensive spending review, the original nine bidders had been reduced to one: Scottish Power, which proposed to fit the technology to its existing Longannet power station on the Firth of Forth. But by last October, it transpired that even this subsidy wasn’t enough for Scottish Power, and the project collapsed.

Three weeks ago, the National Audit Office published a scathing report into the fiasco, which ended up costing taxpayers £64 million to achieve nothing whatsoever. Yet hardly has the ink dried on that report than the government is proposing to repeat the whole exercise on an even bigger scale.

Think about that for a moment, and now read this column from the Daily Telegraph’s Iain Martin:

Ukip scored 11 per cent in one poll last weekend. Even if that turns out to be a rogue finding, Nigel Farage’s troops have been polling 7 per cent recently. Plenty of Conservatives, disgruntled with Cameron and the coalition, are currently flirting with the possibility of voting Ukip at future elections, even just as a protest. There is widespread discontent with the major parties, including amongst the kind of Tory-leaning voters Cameron needs to get back onside.

It is the steady rise of Ukip at UK general elections that should trouble the Tories. In 1997 the party polled just 105,722 votes, but the Referendum Party caused havoc for the Tories with its 811,849 votes. That showed there was a strong Eurosceptic constituency of 900,000+ voters prepared to consider alternatives to the Tories, which Ukip struggled at first to tap into. In 2001 the party moved up to 390,563, but in 2005 it was 605,973 and in 2010 it rose to 919,471. I fail to see how almost a million voters, disproportionately likely to have previously voted Tory, voting Ukip can be anything other than a serious problem for the Conservatives, particularly when Cameron fell short of an overall majority.

The question for Farage is now whether he can maintain the rate of progress of the last decade, by smashing through the million vote mark next time and pushing up towards 1.5m.

In contrast to the current über-moderniser analysis, George Osborne, as the Conservative party’s election supremo, has always taken the threat seriously. Ahead of the 2008 local elections, he was obsessed with trying to ensure that Ukip did not jeopardise Tory progress against Gordon Brown. Now the Conservative leadership faces a strategic dilemma. In 2008 and in 2010 they could play the Eurosceptic card and say that Cameron was determined to govern as a robust opponent of further EU integration. To what extent will such promises be believable this time? Don’t all answer at once.

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