By Gerard Wynn
LONDON (Reuters) - Chancellor Alistair Darling on Monday boosted support for climate friendly technologies but cut planned tax hikes on inefficient cars, juggling combined climate and recession fears.
Environmental groups said the government had failed to meet its rhetoric to launch a "green new deal" boosting jobs in a low-carbon economy, in a wider package of tax cuts and spending meant to fend off an economic slump.
"Renewable energy along with nuclear power will play an increasing role in meeting our energy future," Darling said.
The government would extend by 10 years to 2037 a scheme which sets mandatory targets for utilities to get electricity from low-carbon sources, and which has been the main driver for green energy growth in Britain.
Advertisement starts
Advertisement ends
"By requiring energy companies to generate a share of energy from renewable sources, that obligation will underpin investor confidence and support the development of renewable energy," said Darling.
The chancellor also announced a 535 million pounds cash injection into rail transport and energy efficiency measures, bringing forward capital spending to boost demand in the flagging economy.
A low carbon industry could generate an extra 1 million "green collar" jobs in the next 20 years, he added.
TOO MODEST
But green groups said Darling's ambition was too modest, failing to grasp the chance to boost a low-carbon economy.
"This was an historic opportunity to invest billions in a low-carbon, high technology future, but the Chancellor blew it," said Greenpeace's John Sauven.
"Ministers should have gone much further to slash energy waste and develop the UK's massive renewable energy potential," said Friends of the Earth's Andy Atkins.
Darling announced an additional 100 million pounds in new money and brought forward another 50 million pounds to help up to 60,000 households insulate their homes.
The government would also monitor whether energy suppliers were passing on recent falls in wholesale prices to customers, he added, after calls for taxes on windfall profits.
But Darling cut by one third a proposed increase in 2010 in taxes on gas guzzling cars, reflecting the difficulty of implementing costly climate measures during a slowdown.
"In the original proposal some cars would have seen increases by up to 90 pounds. Instead, I now propose that the more polluting cars will see their duty increase, but up to a maximum of 30 pounds, and less polluting cars will see no increase or a cut of up to 30 pounds," he said.
Air passenger duties would be banded to reflect the length of passenger journeys. That contrasted with previous plans to scrap the duty in favour of a tax on flights.
Low car tax hikes reflected a squeeze on the climate agenda during recession, said Tim Yeo, who leads a committee of lawmakers which scrutinises environmental policy.
"I'm quite concerned," he told Reuters. "There's a problem to keep climate change at the top of the agenda."
(Additional reporting by Daniel Fineren; editing by James Jukwey)
