New Thinking Blog: Come on Ed – time to convince us that Labour can deliver green growth

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on Mar 22, 13 • posted by

New Thinking Blog: Come on Ed – time to convince us that Labour can deliver green growth

724Come on Ed – time to convince us that Labour can deliver green growth

Caroline Kuzemko, IGov Team, 22nd, March 2013

About Caroline:


It seems that the time is right for Labour to grab both the growth and the sustainable energy mantles. This is not least because it is budget week, which allows for extra Labour air-time. But it is also because of mounting evidence that our Con-Dem Government is failing both to deliver economic growth and to recognise the potential of the low carbon economy. Both Ed Miliband and Ed Balls have maintained a steady narrative about the need for a ‘plan for growth’ for the UK. But Labour does not have much political distinction here. Michael Heseltine has set forth a detailed plan for growth based in part on infrastructure spending and effective public sector procurement to revive the UK’s industrial base.  Current Business Secretary, Vince Cable, has also directed a challenge to David Cameron and George Osborne based on the argument that the UK should take advantage of record low borrowing rates to fund infrastructure spending.

Labour, and Ed Miliband in particular for reasons detailed below, need to regain political advantage with an emphasis on infrastructure spending to build a green, forward-looking economy. His stance so far in response to the budget has been to focus on the lowering of taxes for the few, the failure to build growth from the bottom up, and the disadvantaging of families. Ed could go so much further by proposing other workable solutions. This could be done by combining his arguments about Con-Dem economic policy failures with earlier comments on the need for a Green Industrial Revolution. Economic failure is compounded in many ways by failures to successfully develop a sustainable, low carbon economy. Not least given medium and long-term price forecasts for fossil fuels – including gas. The independent Office for Fiscal Responsibility have argued that the UK’s disappointing growth was related in part to soaring oil prices.

A great deal of support for, and evidence to back up, the need for investment in a sustainable economy can be found at the moment – not least in Professor Michael Jacob’s excellent piece on Green Social Democracy. What Jacobs brings to light is not only concrete ways in which green growth can be achieved but also the number of new business stakeholders that support this view, not least in the large and fast growing global low carbon and environmental sector. Martin Wolf, economist and associate editor of the Financial Times, has argued that fiscal austerity is indefensible and that lack of growth is the principal issue. Even the rating agency Moody’s has argued that the UK’s fiscal problems are exacerbated by sluggish economic growth. Wolf goes on to argue that growth could be encouraged using the government’s balance sheet given the solvency of the UK economy in addition to record low interest rates. State spending is widely understood to have counter-cyclical effects on the economy during times of crisis.

Arguments about the importance of growth and possibilities of using counter-cyclical state spending coincide neatly with the fact that the UK is in desperate need of energy infrastructure investment – both to transition to a sustainable energy future and to maintain current levels of electricity supply. Furthermore, as the Renewable Energy Association have pointed out, renewables are ‘shovel ready’ and could play a lead role in driving jobs and growth – just what Labour are arguing is needed. Given the supply and price outlook for fossil fuels, rapidly mounting cost implications of nuclear, and falling renewables costs the economic argument for renewables is steadily improving. 

Ed Miliband should have no excuses now – not least because he is incredibly well placed to present these kinds of arguments. Firstly, as leader of the opposition, he is expected to help us understand how and why current policies are failing and what can be done about them. More importantly, as first and former Secretary of State for Energy and Climate Change, he should have a higher degree of credibility in expressing arguments about sustainable energy as an engine for growth. He should also have access to and, importantly, the ability to understand relevant materials and arguments. Much scholarship on energy systems transitions emphasises the importance of a leadership role for political actors and it is time now that Ed stepped into that role.

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