How British industry is missing out on the green economy

Where's that rose garden Cameron promised?

David Cameron’s husky-hugging Rose Garden pledge to deliver the greenest government ever always felt more like a marketing or branding statement than a policy, containing as it did no specific description of what on earth that would mean in practice. Nevertheless, as a statement of intent it was very powerful.

However, a little over thirty months on from the Rose Garden conference, and Cameron’s pledge to make the Conservatives the environmental party is probably the most discredited of all his pre-election gambits. Remember “Vote Blue Go Green?” – it all seems quite a long time ago. Because despite the strictures imposed by the 2008 Climate Change Act, a series of policy u-turns, relaxations of environmental ambitions and a drip feed of rhetoric stressing the costs rather than the benefits of moving to a green economy, have together contributed to a situation where there is little leadership on the green agenda.

That’s why 11 major property and construction organisations, representing a huge swathe of the £100bn UK industry, last week signed a letter to chancellor George Osborne calling for the government to back a campaign by Building magazine to get behind the green agenda – or risk losing forever the potential the sector holds for major economic growth. The signatories of the letter, and the wider backers of the campaign, represent an unprecedented alliance of interests, from brick-makers and builders to the high-finance property companies that own and develop in our major cities.

The hope is that this unusual alliance, taking in environmentally committed big name architects such as Richard (Lord) Rogers, and red-in-tooth-and-claw housebuilders, will persuade the Chancellor that business doesn’t actually see sustainability and economic growth as something you have to choose between – that you can do both. That, in fact one drives the other: a move toward environmental sustainability will actually deliver growth.

At the moment Osborne has been very clear that this is not how he views the world, telling the Tory conference in 2011 that “a decade of environmental laws and regulations are piling costs on the energy bills of households and companies” and that he wasn’t going to “save the planet” by “putting the country out of business.”

It’s not as if the whole government sees things in the same way: many departments are doing what they can to fight the scepticism from the centre. That shouldn’t be a surprise, as the Confederation of British Industry (that bastion of environmental activism) has called for investment in green growth, saying the “market” accounts for £122bn, or 8 per cent of GDP, and may have accounted for a third of all growth in the economy in 2011/12. But one who has seen government operating up close, former construction tsar Paul Morrell, couldn’t have been clearer when he testified in December: “There clearly is no belief inside Treasury that there is real opportunity of growth in the green agenda. I don’t know why they think that, [because] oddly business does.”

This lack of belief explains a lot – from the government’s u-turns on subsidies for solar power which led directly to one contractor, Carillion, putting 5,000 staff on notice; to the government’s decision to withdraw all previous subsidy regimes for helping householders install insulation, focusing instead on one unproven programme, the Green Deal, with the result that the number of lofts that get lagged each year are predicted to fall by up to 93 per cent. It’s not that surprising that a recent poll by You-Gov found that just 2 per cent believe the coalition has met Cameron’s “greenest ever” pledge.

Another example of where the government has missed a trick is in the cancellation of the planned introduction of something called Display Energy Certificates (DECs), a measure that would have forced offices and shops to calculate and publicly display the energy they use. The measure was pulled despite blanket industry support for its introduction.

Unlike businesses, the Treasury currently seems not to see how targeted and reasonable regulation – as opposed to form-filling bureaucracy – can actually help drive innovation and growth. For businesses it can set a level playing field which stops ethical firms being undercut by fly-by-night operators.

The Treasury instead seems to see lobbying for any green regulation as a form of self-serving bidding for government support by hard-pressed building firms. While the Treasury is right that regulation can in some circumstances falsely create a market for services to comply with that regulation, thereby adding a cost to end users, this view ignores the fact that this particular bit of regulation, DECs, was also supported by the private sector firms who would have paid for the work: the developers and office owners.

Because for them the business case for making investment in green technology is often marginal because it requires significant up-front investment, even though it pays for itself in reduced energy bills over time. To make it really worthwhile they want their clients – building occupiers – to be able to see how green their buildings are, and be able to compare this transparently against their rivals. Then it starts to have a market value. That’s what DECs could have done. But the opportunity was missed.

It’s just one example. The practical impact of this reluctance from government to intervene where there is market failure is that fewer and fewer businesses are seeing investment in sustainability as the key to future profits, because they are less clear that both the market and the regulatory regime are moving in that direction. One chief executive of a major listed contractor told me in the last six months that he had stopped investing in upskilling his business to carry out green retrofitting, because he didn’t see the demand under the current government.

Thus an industry, construction, which represents a tenth of the UK economy, remains in deep recession, dragging down the output of the nation. But beyond this immediate impact, the real risk of not taking a leadership position on the green economy is that an opportunity is missed to take a lead in a global market that is likely to be one of the key industries of the 21st century. The UK could be the country with the skills the rest of the world turns to in order to combat climate change. But not if the current course continues.

The campaign is being tweeted at #green4growth

Cameron’s pledge to make the Conservatives the environmental party is probably the most discredited of all his pre-election gambits. Photograph: Getty Images

Joey Gardiner is assistant editor at Building magazine

Photo: Getty
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Ken Livingstone says publicly what many are saying privately: tomorrow belongs to John McDonnell

The Shadow Chancellor has emerged as a frontrunner should another Labour leadership election happen. 

“It would be John.” Ken Livingstone, one of Jeremy Corbyn’s most vocal allies in the media, has said publicly what many are saying privately: if something does happen to Corbyn, or should he choose to step down, place your bets on John McDonnell. Livingstone, speaking to Russia Today, said that if Corbyn were "pushed under a bus", John McDonnell, the shadow chancellor, would be the preferred candidate to replace him.

Even among the Labour leader’s allies, speculation is rife as to if the Islington North MP will lead the party into the 2020 election. Corbyn would be 71 in 2020 – the oldest candidate for Prime Minister since Clement Attlee lost the 1955 election aged 72.

While Corbyn is said to be enjoying the role at present, he still resents the intrusion of much of the press and dislikes many of the duties of the party leader. McDonnell, however, has impressed even some critics with his increasingly polished TV performances and has wowed a few sceptical donors. One big donor, who was thinking of pulling their money, confided that a one-on-one chat with the shadow chancellor had left them feeling much happier than a similar chat with Ed Miliband.

The issue of the succession is widely discussed on the left. For many, having waited decades to achieve a position of power, pinning their hopes on the health of one man would be unforgivably foolish. One historically-minded trade union official points out that Hugh Gaitskell, at 56, and John Smith, at 55, were 10 and 11 years younger than Corbyn when they died. In 1994, the right was ready and had two natural successors in the shape of Tony Blair and Gordon Brown in place. In 1963, the right was unprepared and lost the leadership to Harold Wilson, from the party's centre. "If something happens, or he just decides to call it a day, [we have to make sure] it will be '94 not '63," they observed.

While McDonnell is just two years younger than Corbyn, his closest ally in politics and a close personal friend, he is seen by some as considerably more vigorous. His increasingly frequent outings on television have seen him emerge as one of the most adept media performers from the Labour left, and he has won internal plaudits for his recent tussles with George Osborne over the tax bill.

The left’s hopes of securing a non-Corbyn candidate on the ballot have been boosted in recent weeks. The parliamentary Labour party’s successful attempt to boot Steve Rotheram off the party’s ruling NEC, while superficially a victory for the party’s Corbynsceptics, revealed that the numbers are still there for a candidate of the left to make the ballot. 30 MPs voted to keep Rotheram in place, with many MPs from the left of the party, including McDonnell, Corbyn, Diane Abbott and John Trickett, abstaining.

The ballot threshold has risen due to a little-noticed rule change, agreed over the summer, to give members of the European Parliament equal rights with members of the Westminster Parliament. However, Labour’s MEPs are more leftwing, on the whole, than the party in Westminster . In addition, party members vote on the order that Labour MEPs appear on the party list, increasing (or decreasing) their chances of being re-elected, making them more likely to be susceptible to an organised campaign to secure a place for a leftwinger on the ballot.

That makes it – in the views of many key players – incredibly likely that the necessary 51 nominations to secure a place on the ballot are well within reach for the left, particularly if by-election selections in Ogmore, where the sitting MP, is standing down to run for the Welsh Assembly, and Sheffield Brightside, where Harry Harpham has died, return candidates from the party’s left.

McDonnell’s rivals on the left of the party are believed to have fallen short for one reason or another. Clive Lewis, who many party activists believe could provide Corbynism without the historical baggage of the man himself, is unlikely to be able to secure the nominations necessary to make the ballot.

Any left candidate’s route to the ballot paper runs through the 2015 intake, who are on the whole more leftwing than their predecessors. But Lewis has alienated many of his potential allies, with his antics in the 2015 intake’s WhatsApp group a sore point for many. “He has brought too much politics into it,” complained one MP who is also on the left of the party. (The group is usually used for blowing off steam and arranging social events.)

Lisa Nandy, who is from the soft left rather than the left of the party, is widely believed to be in the running also, despite her ruling out any leadership ambitions in a recent interview with the New Statesman.However, she would represent a break from the Corbynite approach, albeit a more leftwing one than Dan Jarvis or Hilary Benn.

Local party chairs in no doubt that the shadow chancellor is profiling should another leadership election arise. One constituency chair noted to the New Statesman that: “you could tell who was going for it [last time], because they were desperate to speak [at events]”. Tom Watson, Caroline Flint, Chuka Umunna, Yvette Cooper, Andy Burnham and Liz Kendall all visited local parties across the country in preparation for their election bids in 2015.

Now, speaking to local party activists, four names are mentioned more than any other: Dan Jarvis, currently on the backbenches, but in whom the hopes – and the donations – of many who are disillusioned by the current leadership are invested, Gloria De Piero, who is touring the country as part of the party’s voter registration drive, her close ally Jon Ashworth, and John McDonnell.

Another close ally of Corbyn and McDonnell, who worked closely on the leadership election, is in no doubt that the shadow chancellor is gearing up for a run should the need arise.  “You remember when that nice Mr Watson went touring the country? Well, pay attention to John’s movements.”

As for his chances of success, McDonnell may well be even more popular among members than Corbyn himself. He is regularly at or near the top of LabourList's shadow cabinet rankings, and is frequently praised by members. Should he be able to secure the nominations to get on the ballot, an even bigger victory than that secured by Corbyn in September is not out of the question.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.