A GREEN RECOVERY NEEDS GREEN MONEY

The Prime Minister’s speech last week was an underwhelming contribution to the green recovery. The credibility of this promise, and much else, depends on what the Chancellor has to say in his speech on Wednesday. Here are four tests the speech must pass if it is to fill the hole left by the Prime Minister.

First.

There are two clear priorities for our economic recovery. We must increase people’s purchasing power as much and as rapidly as possible now and we must keep in mind that we will need to greatly increase the productivity of the economy later in order to manage the public debt we have rightly created by keeping it on life support.

68% of households have had their income reduced during lockdown. The construction industry has been one of the worst affected economic sectors by the pandemic.

Investment in energy efficiency offers a triple whammy. By providing a lot of jobs all over the country much faster than other public investments it gets incomes up. By reducing energy bills is allows more of that income to flow back into the economy as increased purchasing power. By reducing energy bills for business it increases economic productivity.

It would also bring two other benefits. For the climate, it directly addresses the need to reduce carbon emissions from heat. For the Government, it offers a tangible way to stand up its often claimed intention to level up the economy.

Economically, environmentally and politically no other investment gives you anything like as big a political bang for your public buck.

Second.

The Government is already committed to these goals. It has promised that the recovery will be green on a number of occasions. It did so building on the commitment in its election manifesto to spend £9.2 billion over the next decade on improving the energy efficiency of Britain’s buildings.

We have seen the green headlines. Now we need to see the green money.

The Government needs to put its money where its mouth is and announce the spending of at least the first of the promised billions next week. Anything less than £1 billion on energy efficiency will say the headlines matter more than the energy efficiency.

Third.

We are not the only people watching. Other Governments will be paying closer attention to what the British Government does than to what it says. If there is to be any prospect of the Government making a success of COP 26 next year it must be seen to walk its climate talk. They will be playing close attention to the Chancellor’s speech as a clear indicator of how seriously the Government takes its COP 26 responsibilities.

Finally.

If there is one lesson that we can learn from our COVID-19 experience it is that the more Whitehall involves local governments the better the result. In spending the money for energy efficiency, the more likely it is that delivery of the outcome will be quick and successful. Energy efficiency requires many people to adapt the way they live and they will do that better if the effort is run by trusted political leaders.

Tom Burke

London

July 6th 2020

This piece A green recovery needs green money was originally published by Business Green