Say you’re a billionaire, or the chief executive of a multinational looking to build a new gigafactory. Why invest in Britain? There are plenty of countries eager for foreign direct investment. The answer is that the UK has, historically, been a pretty safe bet. It could offer the rule of law, strong institutions, a highly-educated workforce and, until recently, access to the EU’s single market.
Back in 2017, Mark Carney, then Governor of the Bank of England, described the UK as reliant on the “kindness of strangers” to help finance its yawning current account deficit. This isn’t wholly fair – as others have pointed out, these investors are looking for a return, they aren’t doing it out of the goodness of their own hearts. But the point stands, we need that investment. And when it comes to net zero, it’s no different.
One of the advantages the UK has enjoyed over other, more dynamic economies such as the United States, is a cross-party consensus on climate. When parliament passed the 2008 Climate Change Act, the first of its kind, only five MPs voted against. That sort of broad support gives investors the confidence to place their cash and capital in Britain. When subsequent prime ministers threaten to tear up that consensus, investors take fright.
Last night, word leaked that Rishi Sunak was planning to weaken UK policy on net zero. Rumours swirled that this would include delaying the ban on the sale of new petrol and diesel vehicles, as well as the phasing out of gas boilers. Sunak is due to make an address at 4.30pm today.
The pushback has been fierce, and not simply from green groups. Business is up in arms. Fast out of the blocks was Lisa Brankin, Ford UK chair, who called the 2030 target a “vital catalyst to accelerate Ford to a cleaner future” and urged the government to provide three things: ambition, commitment and consistency. Chance would be a fine thing.
In the hurriedly pushed-out statement late last night, the prime minister said that politicians had “for too long not been honest about costs and tradeoffs.” This is in fact correct. The energy transition is a massive, all-economy endeavour, and leaders are not entirely sure how to sell it. The absolute wrong way, however, is to construct a false dichotomy between low carbon and high costs.
Meanwhile, Sunak’s prescription is nonsensical. How is rolling back climate ambition in line with Jeremy Hunt’s four Es? (no cheating). Or the desire to be a world leader in green tech, in innovation, in the future. His long quote also ends with guff about making Britain the place “I know we all want for our children.” Delaying reforms to combat climate change as a gift to the next generation?
By the way, it is not as if the UK was erring on the side of over-ambition. Indeed earlier this year, the independent Committee on Climate Change, which advises the government, noted that Britain had “lost its clear global leadership position” and that progress on curbing emissions was “worryingly slow”.
The frustrating thing is that the UK has already missed out on so much economic benefit from the green transition. We may have lots of offshore wind capacity, but the turbines pretty much run manufactured by foreign (and often state-owned) companies. And now China, the US and the EU are pressing the accelerator on green subsidies.
When Sunak leaves office, most likely sometime next year, he will still be a young man. Perhaps he intends to return to California, given that members of his family enjoy US citizenship and he until recently held a green card. As for the rest of us, we’re more likely to be stuck in our draughty homes, importing electric cars, wondering why everyone else seems to be making so much more of an opportunity out of the climate crisis than we are.
In the comment pages, Dylan Jones says welcome back, Brixton Academy – how we’ve missed you. Martha Gill suggests it was our culture that enabled Russell Brand. While Dan Kilpatrick says Spurs’ Daniel Levy answered some questions last night, but many more need addressing.
And finally, want to feel old? Try getting up/sitting down without making the sound. Alternatively, from Peep Show (good) to Little Britain (dreadful), we bring you the TV shows turning 20 this year.
