The Guardian reports the government is considering cutting funding for GB Energy in June’s spending review, a move that could undermine Ed Miliband’s clean energy ambitions.
Labour’s state-owned renewables firm was meant to drive Britain’s transition to clean power but now faces a potential funding squeeze despite being a key part of Keir Starmer’s green energy strategy.
GB Energy was promised £8.3bn over five years but so far has only been given £100m to cover its first two years.
Treasury officials are now reviewing all government spending and one option being considered is slashing £3.3bn from GB Energy’s budget and redirecting it towards low-interest loans for local renewable projects, like solar panels and shared-ownership wind farms.
This comes as tensions mount between No 10, the Treasury and Miliband’s net zero department with Starmer already having scaled back Labour’s green investment plans before the election.
The government has yet to guarantee GB Energy’s full funding commitment despite making it a central manifesto pledge.
A government spokesperson told the paper: “We are fully committed to GB Energy which is at the heart of our mission to make Britain a clean energy superpower and to ensure homes are cheaper and cleaner to run.”
However concerns are growing that any funding cut could damage business confidence and investment in renewables.
A source told the Guardian: “GB Energy has the potential to be a real confidence booster to business. Scaling it back would damage investor sentiment and frankly be electoral madness.”
Last month GB Energy admitted it could take two decades to reach its target of employing 1,000 people while its chair Jürgen Maier refused to set a date for when it would start bringing down household bills.
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