On Wednesday 22nd November, the Chancellor will present the Autumn Statement, setting out the government’s tax and spending plans, including for the final year of this Parliament. The UK risks missing out on huge jobs and growth opportunities, unless the government uses this moment to promote a green industrial strategy.
At a point at which UK business investment is lower than in any other country in the G7, a boost in government green investment could significantly help to stimulate growth and create thousands of new jobs. Green industry could be worth $10.3 trillion to the global economy by 2050 and is by far the fastest growing sector across the economy. The benefits of a green industrial strategy are already being felt in the USA: a year into the delivery of the Biden administration’s Inflation Reduction Act, business groups have estimated that 403,000 jobs will be created in the USA by the 210 major energy projects announced so far.
Commenting, Greenpeace UK’s Political Campaigner, Ami McCarthy, said:
“While Jeremy Hunt attempts to pursue a divisive culture war strategy and attack the civil service, he ignores our flailing economy, and allows the US, EU and China to run rings around us in the race on green technology.”
“We urgently need a sensible plan to boost the economy, help ordinary people with the cost of living, and tackle the climate crisis. Green infrastructure investment, with a focus on renewable energy, insulting our homes and making transport greener would do just that, alongside tax reforms to ensure the super-rich and big polluters contribute to a fair and green transition.”
Policies and investment needed to boost UK green jobs
A boost in government green infrastructure spending would create more jobs and deliver cleaner air, lower bills, and warmer homes. It should be funded through government borrowing – and since green tech is one of the best economic growth generators, it will help to pay for itself:
Renewables – The UK is currently a global leader in offshore wind. However the reality is that other countries are catching up, and current renewables expansion plans are nowhere near enough to retain a competitive global market share or to achieve our net zero targets. The government must provide:
- Business rate relief on pre-construction wind projects that are challenged by global inflationary pressures.
- Confirm the pot of money for CfD support is sufficient in light of supply chain inflation, to bring forward high volumes of renewables in the next auction (AR6).
- Active involvement of the UK Investment Bank to help drive down interest rates in new renewables projects – in particular onshore and offshore wind.
- Provide £4bn of investment in ports and supply chains to support floating offshore wind.
- It’s been reported the Chancellor may reclassify renewables cabling as critical national infrastructure and launch a consultation on ways to compensate affected communities by offering discounts on energy bills. This should also include early and meaningful engagement with communities in the planning process.
- Support for high carbon sector workers to transfer their skills and experience into the renewables sector.
Electricity storage, grid management and delivery, and green hydrogen
High renewables electricity systems will become the norm over the next few years, and key storage and grid upgrades will be needed alongside this to ensure effective system operation. The government must:
- Upgrade the national grid, including providing additional capital investment, to reflect the increase in electricity storage that will be necessary to meet demand.
- Support the development and route to market of a green electricity storage industry, including hydrogen made locally and using renewable energy and other new technologies like liquid air and hot bricks, through providing financial support and regulation, including market guarantees – such as ‘cap-and-collar’ contracts for new pumped storage projects.
Energy Efficiency and Heat Pumps
Large scale investment in a national energy efficiency and heat pump rollout would ensure that people felt the benefits of green investment immediately through warmer homes and cheaper bills. The UK’s housing stock is some of the oldest in Western Europe, meaning that a lot of the energy that people use for heat is wasted through poorly insulated walls, roofs and windows. These measures would add £6.8bn to UK GDP by 2030 and create 138,400 new jobs. They would also help reduce fossil fuel imports and make the UK’s economy more efficient. The government must:
- Invest at least £6bn of public investment annually over 10 years to deliver a national home insulation retrofit programme.
- Invest a further £2.5bn a year on heat pumps next parliament, in order to fit at least 900,000 heat pumps a year by 2028.
Public Transport
To build a resilient future, connect communities outside of the Southeast of England, and create thousands of jobs, the government should provide at least £8bn a year additional public investment in low carbon public transport infrastructure across the UK. This would also support a modal shift away from private vehicles, which is vital for cutting emissions. This investment should include:
- £2bn a year to expand cycling and walking infrastructure (and equivalent funding for devolved nations).
- At least £6bn a year to expand and electrify local and regional bus and train services, restore routes that were cut, and switch buses and coaches to zero emission power.
- Reallocating funds earmarked for new road building.
Electric Vehicles and Batteries
The transition to electric vehicles is happening both here and around the world. If we are to benefit from the huge returns that competing in this international market brings, the government must urgently invest in the industry:
- Provide incentives for investment for 10 gigafactories by 2040, prioritising locating them in deindustrialised areas.
- Ensure adequate investment in the ultra-fast charging network, including power supply, on the motorway network. With nearly a billion pounds sitting unused in a fund for 3 and half years there is an urgent need for the Treasury and DfT to resolve this problem.
- Increase funding (and mandate) for local authorities to roll out public charging infrastructure with a special focus on off-street parking.
Reforming taxes to support a fair green transition, at home and abroad
Urgent tax reforms are also needed to ensure the super-rich and big polluters contribute to a fair and green transition. The extra money raised should pay for policies that ensure everyone can benefit from the enormous opportunities of the green transition, and be protected from the intensifying impacts of climate change. For example:
- A dedicated fund for green skills development and retraining for workers in high-carbon industries.
- Subsidies to reduce public transport fares to make it easier for people on lower incomes to access jobs and services.
- Some form of a social tariff in the energy market to help provide a safety net for households struggling to afford their bills.
- Contributing funds to enable developing countries to transition to green solutions and rebuild following climate disasters.
The case for raising taxes on the wealthiest people and big corporate polluters has never been clearer. The richest 250 families in the UK sit on a combined wealth of £748bn; 1% of UK households own 25% of the wealth; the wealthiest 1 percent of humanity are responsible for twice as many emissions as the poorest 50 percent combined; and in 2022 alone, five of the world’s biggest private oil and gas companies saw record profits totalling nearly $200 billion.
The Chancellor should also introduce a Carbon Border Adjustment Mechanism, as recently speculated, in collaboration with the EU. This should be used to channel revenues to decarbonisation both at home and abroad, including ensuring it is implemented so as to not unfairly penalise the Least Developed Countries.
