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

How Jim Murphy's mistake cost Labour - and helped make Ruth Davidson

Scottish Labour's former leader's great mistake was to run away from Labour's Scottish referendum, not on it.

The strange revival of Conservative Scotland? Another poll from north of the border, this time from the Times and YouGov, shows the Tories experiencing a revival in Scotland, up to 28 per cent of the vote, enough to net seven extra seats from the SNP.

Adding to the Nationalists’ misery, according to the same poll, they would lose East Dunbartonshire to the Liberal Democrats, reducing their strength in the Commons to a still-formidable 47 seats.

It could be worse than the polls suggest, however. In the elections to the Scottish Parliament last year, parties which backed a No vote in the referendum did better in the first-past-the-post seats than the polls would have suggested – thanks to tactical voting by No voters, who backed whichever party had the best chance of beating the SNP.

The strategic insight of Ruth Davidson, the Conservative leader in Scotland, was to to recast her party as the loudest defender of the Union between Scotland and the rest of the United Kingdom. She has absorbed large chunks of that vote from the Liberal Democrats and Labour, but, paradoxically, at the Holyrood elections at least, the “Unionist coalition” she assembled helped those parties even though it cost the vote share.

The big thing to watch is not just where the parties of the Union make gains, but where they successfully form strong second-places against whoever the strongest pro-Union party is.

Davidson’s popularity and eye for a good photo opportunity – which came first is an interesting question – mean that the natural benefactor in most places will likely be the Tories.

But it could have been very different. The first politician to hit successfully upon the “last defender of the Union” routine was Ian Murray, the last Labour MP in Scotland, who squeezed both the  Liberal Democrat and Conservative vote in his seat of Edinburgh South.

His then-leader in Scotland, Jim Murphy, had a different idea. He fought the election in 2015 to the SNP’s left, with the slogan of “Whether you’re Yes, or No, the Tories have got to go”.  There were a couple of problems with that approach, as one  former staffer put it: “Firstly, the SNP weren’t going to put the Tories in, and everyone knew it. Secondly, no-one but us wanted to move on [from the referendum]”.

Then again under different leadership, this time under Kezia Dugdale, Scottish Labour once again fought a campaign explicitly to the left of the SNP, promising to increase taxation to blunt cuts devolved from Westminster, and an agnostic position on the referendum. Dugdale said she’d be open to voting to leave the United Kingdom if Britain left the European Union. Senior Scottish Labour figures flirted with the idea that the party might be neutral in a forthcoming election. Once again, the party tried to move on – but no-one else wanted to move on.

How different things might be if instead of running away from their referendum campaign, Jim Murphy had run towards it in 2015. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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