The First Minister has accused the UK Government of trying to pull a “giant swizz” that could threaten Tayside and Fife’s future in the profitable renewables market.
Alex Salmond expressed his “bitter disappointment” at the coalition government’s refusal to give immediate access to the fossil fuel levy to allow work to begin on potential energy projects in places such as Methil and Dundee.
He was backed up by industry body Scottish Renewables, which said it was “key” that the money be released immediately. The £191 million fund is held in London and has been earmarked for the promotion of renewable energy sources in Scotland.
The Comprehensive Spending Review contained an offer that would have seen up to £250 million go into a future green investment bank as compensation for the cash.
However, rejecting the plan on Thursday, an angry Mr Salmond accused the Treasury of “sleight of hand” because accessing the fund now would lead to a corresponding cut in the Scottish block grant.
He said the proposed green investment bank would not be operational for at least three years, meaning the money would not be in place in time to meet the “pressing need” for key renewable infrastructure investments.
Mr Salmond cited both Dundee and Fife as areas with major interests in renewable energy, but would not be drawn on any particular projects which could be affected.
“I’m not going to talk about individual projects, but clearly if you don’t have £200 million you had every reason to expect you were going to have, that has consequences,” he said.
“We’re not going to sit and watch investments that should have come to Scotland go elsewhere. We’re not going to do that.”Treasury ‘whip-round'”Clearly the Treasury is doing a whip-round just now. They’re doing a whip-round to grab money from wherever they can so they can capitalise this bank in 2013. At the last minute, the Treasury have alighted on our fossil fuel levy and said, ‘Oh that’s handy, there’s £250 million, we’ll take that.’ Well, they’re not on.”
He said the Treasury hopes people would not understand the issue, referring to complicated financial terms and jargon. “I think folk are too sensible not to realise what’s happening,” he added.
The Scottish Lib Dems used a debate in the parliament to call on the Scottish Government to accept the plan.
“The SNP need to put their prejudices to one side and work constructively with the coalition government to invest these funds in worthwhile Scottish renewable energy projects,” said Liberal Democrat energy spokesman Liam McArthur.
This year Scottish Enterprise’s National Renewables Infrastructure Plan (NRIP) report rated Dundee, Leith and Methil as the top three possible hubs for the emerging offshore wind energy sector in Scotland.
Mr Salmond on Thursday said prompt investment was needed in the chosen projects and said that until a few weeks ago “every indication” from Downing Street had been that the money would be released imminently.
“It could only be described as a giant swizz,” said the First Minister, who has written an angry letter to David Cameron rejecting the plan. However, a spokesman for the Scotland Office described the proposal as “practical” and urged the Scottish Government to take up the offer.
“If the Scottish Government draws down the levy and spends it on renewable projects in Scotland, the UK Government will provide an additional £250 million in Scottish funding from the Green Investment Bank,” he said.
“This goes further in providing dedicated funding for renewable projects than anticipated. If the Scottish Government co-operates we can unlock Scotland’s renewables potential.”
Mr Salmond accused the Treasury of banking on the complicated nature of devolution’s financial arrangements to cushion them from public anger.
“I think folk are too sensible not to realise what’s happening. I think people are well capable of understanding this,” he added. “As that argument gets across, the pressure to release these funds will become irresistible.”
Scottish Renewables chief executive Niall Stuart highlighted the potential job boost to Dundee and Methil that would be provided by the investment.
“The key thing for us is that a way is found of releasing this money now so that ports like Dundee and Methil don’t miss out on attracting offshore wind manufacturing as it is one of the best potential sources of new jobs in Scotland,” he told The Courier.
Mr Salmond’s view also gained support from Friends of the Earth Scotland, who called on Westminster to release the fossil fuel levy immediately without attaching any strings to the cash.’Faustian’Chief executive Duncan McLaren dismissed the UK Government’s proposal as a “Faustian pact.”
He added, “Westminster should free up the fossil fuel levy funding for urgent additional investment in renewables and establish a genuine green investment bank as soon as possible.”
Dundee and Leith both scored 12 out of 14 points in a recent survey to determine their “attractiveness to industry” for renewables investment.
Methil was rated a close third with 11.5 points.