Lib Dems rebel against coalition’s carbon deal

Government whips have suffered a substantial Liberal Democrat rebellion over the decarbonisation target, but the coalition has scraped home with a reduced majority of 23.

Around 16 backbenchers – around half of the party's MPs not obliged to back the government – rebelled in the division against what energy and climate change secretary Ed Davey has called a "grand bargain" with the Conservatives.

Former party leader Charles Kennedy, party president Tim Farron and Treasury spokesperson Stephen Williams were among the rebels.

MPs were registering a protest against the coalition after the Lib Dems voted in favour of including a specific decarbonisation target for 2030 in their autumn conference last year.

Ministers agreed to set that demand aside in return for extra funding for renewable energy in the short-term. That prompted Tim Yeo, chair of the Commons' energy and climate change committee, to table the amendment being debated now which requires the secretary of state to set a target by April 2014 at the latest.

The coalition defeated the amendment by 290 votes to 267.

"The Commons has missed an opportunity today to provide more clarity for investors on the future direction of energy policy," Yeo said afterwards.

"Unfortunately this could mean that urgently needed investment in our energy infrastructure will be slower and the risk of a capacity crisis greater.

"The continuing uncertainty that will result increases the perceived risk of investment and will therefore raise capital costs, meaning that consumers may ultimately pay more for the new power plants that need to be built."

Attention is already now turning to the Lords, which Yeo urged to amend the bill to add the decarbonisation target in line with the advice of the government's statutory independent climate advisers.

"The size of this rebellion means energy secretary Ed Davey now has no excuse not to fight for a stronger energy bill that will actually reduce pollution from Britain's power sector, and secure investment that could create thousands of new green jobs," Greenpeace's executive director John Sauven said.

"The momentum behind new green jobs amendments shows this debate will continue in the House of Lords – and all eyes will now be on Nick Clegg and Ed Davey to up their game in the weeks ahead."

Shadow energy and climate change secretary Caroline Flint said Britain would miss out on new energy jobs and householders would face unnecessary increases in their energy costs because of the government's position.

"This is a humiliating failure by the Liberal Democrats and a betrayal of David Cameron's promise to be the greenest government ever," she commented.

During the Commons debate Yeo had said his amendment was ideal for Lib Dem MPs "keen to take this opportunity to strengthen their well-known reputation for consistency", prompting laughter in the Commons chamber.

Lib Dem backbencher Andrew George suggested "the chancellor of the exchequer is the biggest roadblock". Yeo replied that Davey and Danny Alexander, the chief secretary to the Treasury, could give a "decisive signal" to George Osborne by backing the amendment.

If rejected the government will not have to consider a target for 2030 before 2016, when the next carbon budget is due.

Labour MP Barry Gardiner, a member of Yeo's committee, said the coalition deal was "more of a Faustian pact" which would undermine the UK's green credentials.

"We're not trying to wreck this bill," he said.

"Ministers should distinguish between those who bring a spade to bury their efforts and those who bring a spade to shore them up."

Energy minister Michael Fallon argued that setting a target now would cost businesses and consumers as he warned against "decarbonisation by dogma or default".

"I would suggest to the House there is no certainty for investors in setting a target before we can possibly know how we could actually meet it," he told MPs.

"Let the opposition be opportunistic, let them please the lobbyists by suddenly supporting a target they never endorsed in 13 years in power.

"But I would ask those of us here who share the responsibility of government to be a little more careful – not to risk higher bills now for our hard-pressed businesses and constituents."

Officials fear the other areas of energy consumption, heating and transport, could become more reliant on electricity generation in the 2020s and 2030s, making decisions about when to create fresh electricity generation capacity all the more important.

Fallon added: "It is vital that the decision to set a target range is not taken in isolation, which is the approach, but in the context of considering the pathway of the whole economy towards our 2050 target."