Green pledges to be put to test with spending plans

The coalition's promise to be the "greenest government ever" could be on shaky ground if the Treasury takes the axe to initiatives designed to shift the UK to a low-carbon economy.

Campaigners and businesses fear decisions to reduce subsidies for small-scale renewables or cut funding for developing ports to handle the new offshore wind industry will damage efforts to boost green manufacturing and generate jobs.

They have also warned that a failure to fund sufficiently the planned green investment bank will destroy the opportunity to unlock billions of pounds in private capital to develop low-carbon industry. Alongside climate change measures, other environmental programmes are under threat in next week's comprehensive spending review.

Caroline Spelman, Environment Secretary, has pledged to protect frontline services such as flood defences and animal health - but with Environment Department agencies including Natural England looking at cuts of 25 per cent to 40 per cent, measures including wildlife-friendly farming subsidies are at risk.

Both the Environment Department and the Department of Energy and Climate Change have already announced cuts to their budgets, in areas such as developing low-carbon technology, and Defra is set to lead the way in the bonfire of the quangos.

But environmental groups said the spending review would be the first real test of the coalition Government's commitment to being the greenest government ever. They urged the Treasury to ensure at least £6 billion in funding for the green investment bank, and to leave the green subsidies - which add costs to consumer bills - for renewable electricity and heat intact.

Their calls over the investment bank have been echoed by a range of businesses. Small-scale manufacturers have also lined up with major energy companies to warn that reducing feed-in tariffs paid to householders and businesses for electricity from small-scale renewables could cause investors to "flee" the sector.

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