UK Could Get £57 Billion Economic Boost by Going Green, CBI Says

(Bloomberg) -- Britain’s next government must put net zero at the heart of its economic plans if it is to deliver the surge in growth that the country desperately needs, the CBI employers group said.

A £57 billion ($72.1 billion) economic boost by the end of the parliament in 2030 would be the prize if the winner of the July 4 election makes eliminating carbon emissions “part of a revitalized pitch for brand Britain,” the CBI said.

Its call comes just days before the general election, with the Labour opposition on course to secure a large majority that would potentially give it the legislative freedom to make significant change.

The party had planned £28 billion a year of green investment but scaled that back to just £23.7 billion over five years on concerns about the dire state of the public finances. The Conservative Party has also watered down some of its own green transition plans to spare households higher costs.

“No more prevarication, no more rowed back commitments. Whoever forms the next government has to let the world know it’s serious about the investment opportunities from net zero and that we’re in this for the long-haul,” CBI Chief Executive Rain Newton-Smith will say in a speech on Monday at a City & Financial Global climate summit in London. “Make decisions and stick to them.” 

Labour leader Keir Starmer has said he is hoping stronger growth allows the party to deliver it bigger ambitions. He wants the UK to be the fastest-expanding economy in the Group of Seven, saying he would like to get to 2.5% a year. The UK has averaged just 1.6% annual growth since 2010.

Analysis by the CBI found that the UK’s net zero sector grew by 9% in 2023, a year when the broader UK economy grew just 0.1%. Newton-Smith said the figures highlighted “the cost of falling behind in the global race for cheaper, more reliable, more efficient energy.”

She added that the next government “can’t be pro-growth and deliver for our people and communities, without being pro-green.”

The CBI set out other steps to achieve green growth:

• Create an Office for Net Zero Delivery within the Cabinet Office to coordinate between departments
• Establish a net zero investment plan that uses public spending to crowd in private money
• Help to scale up transformational green technologies
• Upgrade the electricity grid at speed by tackling local objections

There has been a “deafening silence from all the parties about the issues of climate change, about biodiversity loss, net zero and our planet,” which contrasts with the “consensus case from business” for net zero as a growth opportunity, Newton-Smith said.  

Separately, a survey by the Institute of Directors found that optimism among business leaders in prospects for the UK economy dropped to a four-month low in June. Investment intentions fell sharply and recruitment plans also dipped.

Anna Leach, the IoD’s chief economist, said: “This may reflect a pause in decision-making ahead of the election.”

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