Is Rishi Sunak really gearing up for green recovery?

For anyone talking about coronavirus derailing the green agenda, recent Government briefings have thrown a spanner in the narrative. The word from inside Number 10 and Whitehall departments is that ministers are determined to stick to their net-zero carbon pledges and are committed to a green economic recovery.

In his first speech as COP26 President Designate, Alok Sharma struck an ambitious tone. “We have the opportunity to turn climate change into a growth opportunity for the global economy,” he said. But the COP26 summit is now not taking place until later next year. More immediately, Rishi Sunak is said to be planning to help to create green jobs for people who have lost their jobs as a result of the pandemic. There has even been talk of a “green industrial revolution”. So what could the Chancellor have up his sleeve?

There is little official detail as yet on exactly how green measures could be used to stimulate the economy, but there are plenty of ideas in circulation. In recent weeks, Tory sources have speculated that the Chancellor may choose tax breaks for companies that make a positive contribution to the environment. There have been briefings about a fund to help to “reskill” workers so they can get green jobs in areas such as energy efficiency (notably upgrading home insulation measures), offshore wind and carbon capture.

Talk of reskilling workers for green jobs came after the Social Market Foundation think tank said Government should draw up a new work-and-training guarantee programme to ensure anyone who cannot find a conventional job is paid by the state. It proposed that state-funded workers should be steered toward roles making the changes that will be needed to deliver a net-zero economy, including insulating homes, replacing gas boilers and installing electric vehicle charging points.

This week there was more, including media reports suggesting that the Government is looking at giving discounts of up to £6,000 if drivers switch to green electric and hybrid cars from diesel and petrol as part of a new scrappage scheme. From what we understand, the scheme would serve as a signal to the car manufacturing industry that the Government is willing to stimulate demand for production of green vehicles in an effort to encourage foreign investment in car manufacturing in Britain. In other words, it ticks both the environmental and economic boxes.

Going further down the same road, perhaps the Government could bring in a huge programme to increase the number of charging stations across the country for electric vehicles. The Department for Transport has been looking at EV infrastructure for a while and Vote Leave chief executive Matthew Elliott suggests that now is the time for action.  Government could also expand tax assistance for electric vehicles to increase take-up, says Elliott who is not short of connections in Number 10. The result would be green policy helping out other sectors of the economy that are now struggling.

In their ‘manifesto for a green recovery’, Greenpeace appears to be on the same page as the former Vote Leave boss, calling on ministers to speed up the transition to electric vehicles. They also want to see a post-coronavirus focus on expanding, electrifying and increasing the affordability of public transport.

Of course, Labour is determined not the let the Tories lead the way. Shadow Business Secretary Ed Milliband has launched a “rapid consultation” on ensuring a green economic recovery from COVID-19. As we await the outcome of that, the former Labour leader has already delivered his first soundbite on the subject with the declaration that we need a “zero-carbon army”. Look out for Miliband, a former Secretary of State for Energy and Climate Change, holding Tory feet to the fire on this one in the coming weeks and months.

Further pressure is likely to come from the Business, Energy and Industrial Strategy Committee. Labour MP Darren Jones won the chairmanship of the committee off the back of his environmental credentials (he led Labour’s Clean Growth inquiry and has consistently voted for measures to prevent climate change). Last week, his committee launched a new “super inquiry on Post-Pandemic Economic Growth”. The committee is specifically looking at whether the government should give a higher priority to environmental goals in future support.

Sunak is expected to announce some limited measures next month. He could yet delay a major stimulus package until the autumn to see how the economy fares in the coronavirus fallout.

Whatever the timescale, it is not just the Labour party and Labour-led select committees who want Sunak to do more than pay lip service to the environment. The pressure to act is coming from all sides. A new report from Policy Exchange doesn’t quite call on ministers to get the green agenda done. But it comes close. “The Government should restate that the crisis has not diverted it from its pre-crisis agenda of levelling up the economy, proceeding with Brexit without a delay and addressing climate change with a net-zero carbon economy,” it states.

 

By David Singleton, Head of Content