Colder, damper, sicker, poorer and less employed: Britons in the near future are likely to be worse off if the next government fails to invest in a cleaner and greener economy, business experts and green campaigners have said.
Economic revival requires investment, and the UK’s crumbling infrastructure needs renewal. The country faces a choice: decline, as businesses and financial investors go elsewhere to find welcoming governments and the regulations, equipment and skills they seek; or investment in the future.
“It’s economically illiterate [to scrap the spending pledge],” said Richard Murphy, a professor of accounting at Sheffield University. “Any person who has done the most basic undergraduate economics knows that you have to invest to get growth.”
Low-carbon investment is necessary to meet the UK’s legally binding target of reaching net-zero greenhouse gas emissions by 2050, but the benefits go far beyond that. Clean energy is cheaper than fossil fuels, increases self-sufficiency and national security by making the UK less dependent on volatile imports of oil and gas, generates green jobs, and reduces air pollution.
The push for a low-carbon economy also has far broader benefits: people will see lower energy bills, warmer and less damp homes, and better health as a result of that, as well as an increase in active transport and green spaces from low-carbon cities.
Mike Childs, the head of policy at Friends of the Earth, said: “Green investment is essential for reducing our energy bills, cutting emissions, creating long-term jobs and boosting business opportunities. Cold, damp homes are having a huge impact on people’s health and wellbeing, as millions struggle to pay the soaring cost of energy bills this winter.”
But after more than a decade of chronic underinvestment, the UK needs somewhere between about £26bn and £30bn a year in public investment to achieve those aims, according to studies. The public money would attract private sector investment, probably enough to triple the amount invested, and would quickly pay off in economic growth and lower bills, as well as increased tax revenues.
“The fiscal multiplier [by which public investment stimulates growth] is a reality,” said Murphy. “It also generates income in tax revenues.”
Other countries, such as the US, China and EU member states, are seizing the opportunities for low-carbon growth. Dr Anupama Sen, the head of policy engagement at the Smith School of Enterprise and the Environment at Oxford University, said: “It’s disappointing to see the Labour party water down this flagship policy due to short-term political pressures, at such a crucial time for climate action and leadership, especially with other countries racing to prepare their economies for the imminent green energy transition. It would be better to stand firm and make the case for this level of investment, which is that it would reduce our emissions and shield against increasingly volatile energy prices to give us genuine energy security.”
Labour has said that its underlying plans to decarbonise the power sector by 2030 and hit the UK’s carbon reduction targets, through measures such as home insulation and improving transport, remain unchanged. The party has not said how much it plans to invest, however, or where the cash necessary to achieve these goals will come from.
That is not good enough for many supporters of a low-carbon economy. The leftwing campaign group Labour for a Green New Deal said: “Without the £28bn green investment fund, the future of Britain is bleak. This promise, if kept, could have not only revitalised the green economy after 14 years of Tory failure, but put the UK on the front line of green innovation, leading the world in climate technologies and solutions.”
Abandoning the pledge also makes it more difficult to distinguish between Labour’s offering on the low-carbon economy and the Conservatives’. The Tories have not outlined how much they would spend, and are reluctant to say how much public money has been invested in total in recent years. But the party is keen to boast of £200bn in private-sector investment in low-carbon efforts in the UK since 2010, and £30bn of additional private investment, most of it in offshore wind, announced since last September, when Rishi Sunak made his U-turns on net-zero policy.
That investment had been achieved by setting out “roadmaps” for a direction of travel, rather than investing large sums of public money, a party adviser told the Guardian.
But these investments were largely the result of past policies that had since lapsed or stagnated, according to Shaun Spiers, the executive director of the Green Alliance thinktank. “The government is living off its past glories. The policies that brought in funding for offshore wind were set a decade and more ago. And with its constant chopping and changing on net zero and industrial strategy, the government can hardly boast of setting a roadmap,” he said. “The private sector is crying out for more consistency.”
Rebecca Newsom, the head of politics at Greenpeace UK, pointed to the accompanying failures of the government. “The Conservative government has been responsible for crumbling public services, a tanking economy, sewage in our rivers and seas – the list goes on. To fix the damage the government has caused, the UK urgently needs a bold green industrial strategy that will create millions of jobs, grow our flailing economy, ease pressure on the NHS, and help the cost of living and climate crises all at the same time.”
Without investment in a low-carbon future, the future is likely to be “bleak, barren, hopeless and devastated”, according to Murphy. “The scale of regret is going to be phenomenal.”