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Labour’s proposed £28bn a year investment in the low carbon economy is an absolute minimum, leading business figures say, without green investment of that scale the UK faces infrastructure collapse and industry collapse. It added that it would face a sharp decline due to stagnation.
Jürgen Mayer, former UK head and major investor at German industrial giant Siemens, said huge investment was needed to rebuild the UK economy and make it fit for the future, including low-carbon energy, He said the focus should be on transportation and industry. .
“These are future growth areas,” he said. “The £28 billion is an investment, not a cost. If we make this investment, business will return to the UK.”
Mr Meyer advises Labor on transport and infrastructure, and has previously advised Conservative governments. He said the Conservatives had turned their backs on business and industry and called on Labor to stick to its £28bn promise.
“We must not be swayed by populism,” he told skeptics within the party. “This is the right decision for the future of this country and the future of the communities that depend on jobs in these industries. For them, Labor needs to stick to this plan.”
The Shadow Cabinet and Labour’s top advisers are considering whether to change or even abandon a long-standing pledge to increase public investment in the low-carbon economy to £28bn a year in the second half of the next parliament.
The Conservatives have made this pledge a key line of attack against Labor, arguing that the only way the party can make such investments is by raising taxes. Prime Minister Jeremy Hunt plans to strengthen this with some tax cuts in his March budget, which will further reduce the fiscal space the incoming Labor government will have to increase spending unless tax cuts are reversed. There is.
The Conservatives also argue that their plans, which include expanding fossil fuels by issuing more oil and gas licenses, are already attracting private sector investment. Private investment in the UK’s low carbon economy since 2010 has reached £200bn, of which £30bn has been spent since September, mainly in offshore wind power. A government spokesperson said: “This shows great confidence in the UK and our plans anticipate an additional £100 billion.” [in private sector investment] Supporting up to 480,000 jobs by 2030. ”
Whitehall officials said the government’s roadmaps for industries such as nuclear power, carbon capture and hydrogen “provide industry with the certainty it needs to support the UK’s low carbon projects”.
But Meyer said governments needed to intervene further in the market to attract the level of investment needed for a low-carbon economy. He also questioned the current strategy, pointing to the closure of the Port Talbot steelworks despite previous assurances it would continue to operate, and the failure of investments in the electricity grid, high-speed rail and manufacturing. I threw it.
The Conservatives have “no credible industrial strategy, no investment and no growth plan. They have turned their backs on industry,” he said. “This transformation is [to a low-carbon future] This is clearly an area where government intervention is needed. ”
He pointed to the US, which is planning to invest $369bn (£291bn) in green industries through its Inflation Control Act, and EU countries, which are investing similarly large amounts. “This is global money, it’s mobile money. All other industrialized countries are taking different approaches,” he said.
Mr Mayer’s views are supported by leading economists and business experts who believe that without strong investment in green infrastructure, the UK will fall behind its international rivals, lose jobs and face further economic decline. He said he would experience it.
According to a paper by Lord Stern and colleagues at the London School of Economics, annual government investment of £26 billion would not only generate twice as much additional private sector investment, but also reduce energy bills and create jobs. , which can stimulate the economy. Lead author Dimitri Zengelis said: “We should not expect the direct public funding needed to support this transition to worsen public debt.” Indeed, by fostering long-term resilient growth, borrowing and investing is the only way to ensure the long-term sustainability of public debt. ”
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Danny Riskandarajah, chief executive of the New Economics Foundation, said: “Labour is committed to keeping the UK competitive against the billions of dollars the US, EU and China are pumping into the low carbon economy. “We have a chance to take off,” he said. Labor must keep its green investment commitments if the UK wants to regain international climate leadership. We need to read America’s books and increase clean, green investments to create jobs, revitalize our communities, and rebuild our shattered economy. ”
Andrew Sims, director of the New Weather Institute, said global public investment programs “improve human health more than they pay for themselves economically and environmentally, and people flock to other investments.” He said the example shows. Fiscal rules, by contrast, were “concocted economic nonsense” that should not have been allowed to impede much-needed investment in future prosperity.
Breaking the pledge, he said, would be “like walking into a prison and asking to be locked up if you do good in the world.”
Sean Spiers, executive director of the Green Alliance, said the UK faced further decline without a significant increase in investment. “The UK has been under-invested for the past 45 years. The effects of that are evident all around us: in failing infrastructure, expensive energy and the depletion of our natural world.”
The Confederation of British Industry (CBI) also supports green investment, but not any political agenda. Tania Kumar, director of net zero policy at the CBI, said: “A crucial challenge for the next government will be to set out a strategy to improve the UK’s global competitiveness.” “This requires shifting the economy’s focus from absorbing short-term shocks determined by global events to identifying the big choices and bold actions that will define the next decade.”
He said the UK stood to benefit, but political leaders needed to set the pace of change. “Global investors will naturally react to the size of the investment. Ambition is important here,” she says. “But Britain’s pitch must be about how we can outspend our competitors, not outspend them.” Getting really clear about what offers are available remains a smart strategy that gives the UK an advantage.”
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