This week the co-operative movement was relieved to see the Treasury announce that it will reverse an earlier decision that would have put community renewable energy schemes at great disadvantage, although Co-operative MPs will keep up the scrutiny.

George Osborne’s 2011 Budget had originally set out plans to cut Enterprise Investment Scheme (EIS), a tax relief, for renewable energy projects if they qualified for the feed-in-tariff (FIT) subsidy. In addition, the Treasury announced that FIT subsidy would be cut by up to 70% for projects generating over 50kW. These decisions severely threatened the financial viability of community renewable energy projects.

The shadow DECC team have been incredibly active on this issue but Labour Co-op members of the team (Shadow Secretary of State Meg Hillier MP and Shadow Minister Luciana Berger MP) ensured the needs of the co-operative sector were not lost.  Meg wrote to the Department of Energy and Climate Change on the issue in June pressing Chris Huhne to recognising the effect the decision would have on the sector and seeking a change in policy. Luciana followed this up and called the Government to account in a debate on co-operatives and mutuality in the economy and argued that the decision should be reversed.

Meg and Luciana’s pressure in Parliament was part of a wider campaign across the co-operative movement to protect community renewable energy, which plays an important role in tackling fossil fuel dependence and climate change. Co-operatives UK also wrote to DECC to demand a re-think on the policy and community renewable energy schemes campaigned on the issue. The Government have now made community renewable energy schemes exempt from the EIS cuts, but still not reversed the decision to cut FiT subsidy to larger projects.

Whilst the Treasury’s about-face on EIS for community renewable energy in the face campaigning by Co-operative Party MPs and the co-operative movement is to be welcomed, the Government still has much to prove about its commitment to co-operative green energy.

Meg stated: Whilst this is a welcome reversal for all of us within the co-operative movement there is still many barriers to tackle to ensure that co-operative renewable energy projects are able to play their part in greening our energy production.

“Labour & Co-operative MPs like me will be there to ensure that our case is heard by the Conservative-led Coalition Government.”

The Tory-led government should more actively support co-operative solutions on renewable energy and reducing energy use, which put democratic ownership at the heart of the fight against climate change. The Co-operative Party is committed to keeping up pressure on this crucial issue.