Boris Johnson: Treasury is endangering community renewables

Boris Johnson has warned the Treasury it is endangering efforts by local communities around the UK to build their own renewable energy projects.

In a letter to the financial secretary to the Treasury, David Gauke, the mayor of London and Tory MP called on the government to reconsider its proposals to remove various forms of tax relief for investors in community energy.

More than 100 green energy groups have already said the change will “decimate” the sector, which has installed community-owned solar panels on village halls, small hydro schemes on rivers and wind turbines on farms.

Johnson is concerned that “the proposals may endanger the expansion of the sector given the investment required for the upfront capital costs” and “there is a danger of unintended consequences”, wrote the deputy mayor for environment and energy, Matthew Pencharz.

The mayor also thought that while such schemes might be small individually, in aggregate they are important to the security of London’s future energy supply, and a key part of efforts to cut the capital’s carbon emissions.

The short-term nature of the tax changes - which are due to come into effect at the end of November - could also put an end to schemes that are already in development or fundraising, he said.

One high-profile scheme for a community-owned solar array in a West Sussex village that was at the centre of anti-fracking protests, has already been shelved as a result of the Treasury’s plans, announced in the finance bill last month. A recent report found more than £100m worth of community energy projects were at risk from the changes.

Johnson and Pencharz suggested the Treasury could assign a “light touch” role to local authorities, which are already involved in community energy schemes, to avoid abuse of the tax relief scheme.

A Treasury spokesperson said: “The government is committed to supporting the investment and innovation needed to achieve a cost-effective transition to a low-carbon economy, but we also want to do this in a way that is fair and provides value for money to hardworking taxpayers.”

It has also emerged that Johnson is considering having Transport for London (TfL) buy zero-emission black cabs and lease them back to taxi drivers as part of his efforts to tackle London’s air pollution. The capital has been in breach of EU safety limits for nitrogen dioxide, a toxic gas produced by diesel vehicles such as black cabs, since 2010.

In a letter to London assembly member Stephen Knight dated 3 November, the mayor wrote: “TfL is currently considering the proposal to purchase and supply zero-emission capable taxis to taxi drivers in London.” Zero-emissions capable taxis would suggest electric or hydrogen cars.

However, he cautioned: “This is a complex proposal and needs to be considered carefully given that TfL is the regulator for the taxi and private hire trades in London.” TfL already operates a similar leasing model for the new Routemaster buses.

Knight welcomed the possibility of electric black cabs: “Switching London’s black taxi fleet over from diesel to electric vehicles is an essential part of tackling dangerous air pollution in the capital. Electric taxis have the benefit of low running costs, but the barrier to their fast and widespread adoption is the very high initial purchase price of these new and innovative vehicles.”