Labour’s vision for a green economic future

Unlike the Conservatives, a Labour government would make sustainable energy a major national priority and give business the confidence to invest.

Tonight, at the annual Green Alliance debate, I will join an audience of business leaders, environmental campaigners and scientists to discuss Britain’s energy future.

Ten years ago, if you were attending a meeting of environmental campaigners and big business, you would have planned for a stand-off. Not anymore. The scope and breadth of the consensus across business and the environmental lobby is striking - something that would have been impossible to imagine a decade ago.

Of course, there are still big debates about the details. But everyone from Friends of the Earth and Greenpeace to the CBI, Alstom and Siemens agree that ensuring sustainable, affordable and reliable energy needs to be at the heart of any economic policy.

Getting energy policy right for the next 20 years is one of the biggest challenges – and the biggest opportunity - our economy faces in this generation. Nobody seriously questions that in the coming decades all countries will have to generate much more energy using renewable sources. The alternative is devastating climate change, ever rising prices and energy insecurity.

That is why business has been gearing up to deliver this energy revolution. As Green Alliance has confirmed today in a new analysis of UK infrastructure needs, our country already has planned investment in low carbon infrastructure of £180bn between now and 2020. Offshore wind alone is worth more than planned spending on gas, roads and airports combined.

The business view is clear: we can and should unlock major investment, huge numbers of jobs and secure our energy future over the next few years. Major firms tell us they are poised to make significant investments here in the UK that would generate vital domestic expertise and supply chains as well as the exports and jobs of the future. And the UK has a potentially world leading position in offshore wind, wave and tidal power.

Failure to invest will mean not just lost jobs but higher energy bills too. As Ofgem warned earlier this year, without new investment in renewable energy, we could well see a growing reliance on imported gas ramping up energy bills for consumers. And delaying the transition to a low carbon economy will also mean an expensive rushed transition – with the extra costs again pushing up energy bills. But needed investment and reform depends on leadership from government. And time and time again, I hear from business and green campaigners alike that this leadership is currently absent.

My fear is that the UK currently risks snatching defeat from the jaws of potential victory. At the heart of this failure is Chancellor George Osborne’s unholy alliance with his troublesome backbenchers. Faced with the choice between short-termist nods to hard-line Tory opinion or the strategic leadership that Britain needs, the Chancellor has chosen the politically easy but economically reckless path.

By refusing to agree a decarbonisation target in the Energy Bill, by raising the prospect of a new 'dash to gas' instead of renewables, by shackling the Green Investment Bank, and by failing to implement the scale and certainty of policy needed to effectively de-risk investment, the government has actively undermined business plans to create jobs and growth.

In 2010, the UK was third in the world for investment in green growth - but we have since fallen down the league tables. The danger is that we will see investment and manufacturing expertise which should be based here in Britain going to other European countries instead.

First, the government has failed to set the clear long-term targets that business needs to invest with certainty. Yes, it remains formally committed to carbon targets for 2050 through the Climate Change Act passed with cross-party support under Labour. But the independent Committee on Climate Change has made clear that this target will require largely de-carbonising electricity by 2030. And yet George Osborne has blocked the government from making a clear commitment in law to this 2030 target. Meanwhile, in Europe, the government is blocking moves to set ambitious renewable and efficiency targets for 2030 at an EU level.

Worse than that, George Osborne has fostered exactly the kind of policy uncertainty that scares away long-term investment. By talking up the possibility of an implausible shale gas bonanza to justify tacking away from renewables after the 2020 targets run out, he has cast further doubt on the government’s long-term commitment to a low carbon future. Business is being denied the confidence of knowing they will have a market and a price structure they can rely on over the investment horizon they need.

Second, the government has failed to play its part in supporting new renewable and clean technologies. Carbon capture and storage, where the UK once led the way, has stalled again. And while Ministers try to claim the credit for setting up the Green Investment Bank which Labour proposed, the government has undermined it from the start. Giving the Bank the power to borrow on the open market would lever in several times more capital and get considerably more bang for the government’s buck.

Perversely, the Chancellor arbitrarily tied this decision to him meeting his target on the national debt. Now, thanks to his wider economic failure meaning he is now not set to meet that target until 2017, the Bank has been left in limbo with neither co-investors nor the sector able to plan ahead. It is an opportunity that George Osborne seems incapable of grasping.

And third, on energy efficiency, the government has failed to deliver. The construction industry is crying out for clarity on the next steps in Labour’s successful zero-carbon homes strategy. The Green Deal, which replaced previous successful domestic energy efficiency schemes, has so far helped just four households this year.

What Britain really needs is leadership, policy certainty and a cross-party consensus to match the one that exists in industry to deliver an economy with strong and sustained prosperity. We need a clear plan for the future of energy generation, energy efficiency in the home, nuclear, gas, renewables and carbon capture and storage.

Labour’s approach will seek to deliver that. Ed Miliband, Caroline Flint and I have all said the government should commit now for a 2030 energy decarbonisation target. Delaying any decision on a commitment until 2016 is a huge missed opportunity. And because the UK should be leading and not following on the global stage, the government should be working with our EU partners to set clear goals and lead from the front in the run up to the Paris 2015 global talks, as we did in the run-up to Kyoto and Copenhagen. That is the way to lead and win the 'global race' that Conservative ministers talk about, rather than trying to turn it in a race to the bottom.

We will also put an end to the mixed signals that are causing confusion and deterring investment by posing a false choice between gas and renewable energy. We support efforts to secure new domestic gas supply, although there are real environmental concerns that must be addressed. We will need a secure gas supply in the decades ahead. But while 'fracking' has had a major impact on energy prices in the US, most experts believe any impact in Europe is uncertain at best. Any balanced and low-carbon energy strategy for the years ahead will need gas, renewable energy and, in our view, nuclear too.

We need clarity on the Green Investment Bank too – to support new technologies and to support energy efficiency. So the government should end the current uncertainty and commit now to giving the Green Investment Bank borrowing powers in 2015. If it fails then the next Labour government will do so as soon as possible after the next election, so that the Green Investment Bank can help to raise our ambition on energy efficiency to insulate homes, cut fuel poverty, bring down bills, create jobs and stimulate the economy in the process.

So the green economy and low carbon energy will be central to Labour’s plans in government. Andrew Adonis’s work for us on industrial strategy will also have energy and environmental policy at its heart. So will Sir John Armitt’s review into the way in which we make our infrastructure decisions. Without a low carbon infrastructure plan and economic strategy, in the modern economy you simply don’t have an economic plan.

Our vision is for a race to the top – to secure a world-leading position for British businesses in helping the world meet the low carbon challenge – and in doing so create prosperity and jobs for people in this country.

US President Barack Obama, in his recent speech on climate change, called for those worried about how he would deliver on his climate goals to have faith in "American ingenuity". I believe this is a challenge that Britain can and must rise to as well. The country that led the industrial revolution shouldn’t simply look on as our competitors press ahead.

And it is because we have faith in British ingenuity that a Labour government would make sustainable energy a major national priority and give business the confidence to invest in the UK. The costs of failure to our environment are well known. But the costs to our long term prosperity and security are just as great.

Ed Balls is the shadow chancellor and MP for Morley and Outwood

"The UK has a potentially world leading position in offshore wind, wave and tidal power." Photograph: Getty Images.

Ed Balls is the shadow chancellor and MP for Morley and Outwood

Photo: Getty Images
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What's to be done about racial inequality?

David Cameron's words on equal opportunities are to be welcomed - now for some action, says Sunder Katwala.

David Cameron made the strongest, clearest and most high profile statement about ethnic inequalities and the need to tackle discrimination ever yet offered by a British Prime Minister in his leader’s speech to the Conservative Party conference in Manchester.
“Picture this. You’ve graduated with a good degree. You send out your CV far and wide. But you get rejection after rejection. What’s wrong? It’s not the qualifications or the previous experience. It’s just two words at the top: first name, surname. Do you know that in our country today: even if they have exactly the same qualifications, people with white-sounding names are nearly twice as likely to get call backs for jobs than people with ethnic-sounding names? … That, in 21st century Britain, is disgraceful. We can talk all we want about opportunity, but it’s meaningless unless people are really judged equally”, said Cameron.
While the proof of the pudding will be in the eating, this was a powerfully argued Prime Ministerial intervention – and a particularly well-timed one, for three reasons.

Firstly, the Prime Minister was able to root his case in an all-but-universally accepted appeal for equal opportunities. It will always prove more difficult in practice to put political energy and resources behind efforts to remedy discrimination against a minority of the population unless a convincing fairness case is made that values cherished across our whole society are at stake. Cameron’s argument, that any party which tells itself that it is the party of the ‘fair chance’ and ‘the equal shot’ must have a response when there is such clear evidence of discrimination, should prove persuasive to a Conservative Party that has not seen race inequalities as its natural territory. Cameron argued that the same principles should animate responses to discrimination when it comes to race, gender and social class. Put like that, wanting job interviews to be fair – by eradicating conscious and unconscious patterns of bias wherever possible – would strike most Britons as offering as clear a case of the values of fair play as wanting the best baker to win the Great British Bake-Off on television.
Secondly, Cameron’s intervention comes at a potential "tipping point" moment for fair opportunities across ethnic groups. Traditionally, ethnic discrimination has been discussed primarily through the lens of its impact on the most marginalised. Certainly, persistent gaps in the criminal justice system, mental health provision and unemployment rates remain stark for some minority groups. What has been less noticed is the emergence of a much more complex pattern of opportunity and disadvantage – not least as a consequence of significant ethnic minority progress.

Most strikingly of all, in educational outcomes, historic attainment gaps between ethnic minorities and their white British peers have disappeared over the last decade. In the aggregate, ethnic minorities get better GCSE results on average. Ethnic minority Britons are more likely, not less likely, to be university graduates than their fellow citizens. 

As a result of that progress, Cameron’s intervention comes at a moment of significant potential – but significant risk too. Britain’s ethnic minorities are the youngest and fastest-growing sections of British society. If that educational progress translates into economic success, it will make a significant contribution to the "Great British Take-Off" that the Prime Minister envisions. But if that does not happen, with educational convergence combined with current ‘ethnic penalties’ in employment and income persisting, then that potential could well curdle into frustration that the British promise of equal opportunities is not being kept.  Cameron also mirrored his own language in committing himself to both a ‘fight against extremism’ and a ‘fight against discrimination’: while those are distinct challenges and causes, actively pursuing both tracks simultaneously has the potential, at least, depolarise some debates about responses to extremism  - and so to help deepen the broad social coalitions we need for a more cohesive society too.

Thirdly, Cameron’s challenge could mark an important deepening in the political competition between the major parties on race issues. Many have been struck by the increase in political attention on the centre-right to race issues over the last five to ten years. The focus has been on the politics of representation. By increasing the number of non-white Conservative MPs from two to seventeen since 2005, Cameron has sent a powerful signal that Labour’s traditional claim to be ‘the party of ethnic minorities’ would now be contested. Cameron was again able to celebrate in Manchester several ways in which his Cabinet and Parliamentary benches demonstrate many successful journeys of migrant and minority integration in British society. That might perhaps help to ease the fears, about integration being impossible in an era of higher immigration, which the Home Secretary had articulated the previous day.

So symbolism can matter. But facial diversity is not enough. The politics of ethnic minority opportunity needs to be about more than visits to gurdwaras, diversity nights at the party conference fringes and unveiling statues of Mahatma Gandhi in Parliament Square. Jeremy Corbyn’s first speech as Labour leader did include one brief celebratory reference to Britain’s ethnic diversity – “as I travelled the country during the leadership campaign it was wonderful to see the diversity of all the people in our country” – and to Labour bringing in more black, Asian and ethnic minority members - but it did not include any substantial content on discrimination. Tim Farron acknowledged during his leadership campaign that the Liberal Democrats have struggled to get to the starting-line on race and diversity at all. The opposition parties too will no doubt now be challenged to match not just the Prime Minister’s rhetorical commitment to challenging inequalities but also to propose how it could be done in practice.

Non-white Britons expect substance, not just symbolism from all of the parties on race inequalites.  Survation’s large survey of ethnic minority voters for British Future showed the Conservatives winning more ethnic minority support than ever before – but just 29 per cent of non-white respondents were confident that the Conservatives are committed to treating people of every ethnic background equally, while 54 per cent said this of Labour. Respondents were twice as likely to say that the Conservatives needto do more to reach out – and the Prime Minister would seem to be committed to showing that he has got that message.  Moreover, there is evidence that ethnic inclusion could be important in broadening a party’s appeal to other younger, urban and more liberal white voters too – which is why it made sense for this issue to form part of a broader attempt by David Cameron to colonise the broad centre of British politics in his Manchester speech.

But the case for caution is that there has been limited policy attention to ethnic inequalities under the last two governments. Restaurateur Iqbal Wahhab decided to give up his role chairing an ethnic minority taskforce for successive governments, unconvinced there was a political commitment to do much more than convene a talking shop. Lib Dem equalities minister Lynne Featherstone did push the CV discrimination issue – but many Conservatives were sceptical. Cameron’s new commitment may face similar challenges from those whose instinct is to worry that more attention to discrimination or bias in the jobs market will mean more red tape for business.

Labour had a separate race inequalities manifesto in 2015, outside of its main election manifesto, while the Conservative manifesto did not contain significant commitments to racial inequality. The mid-campaign launch in Croydon of a series of race equality pledges showed an increasing awareness of the growing importance of ethnic minority votes - though the fact that they all involved aiming for increases of 20 per cent by 2020 gave them a slightly back-of-the-envelope feel. 

Prime Ministerial commitments have an important agenda-setting function. A generation ago the Stephen Lawrence case opened the eyes of middle England to racist violence and police failures, particularly through the Daily Mail’s persistent challenging of those injustices. A Conservative Prime Minister’s words could similarly make a big difference in the mainstreaming of the issue of inequalities of opportunity. What action should follow words? Between now and next year’s party conference season, that must will now be the test for this Conservative government – and for their political opponents too. 

Sunder Katwala is director of British Future and former general secretary of the Fabian Society.