UK Government spending review: Which direction are we heading in?

The announcement of the Chancellor of the Exchequers new spending review was the first signal of how the government is going to rebuild the post COVID economy. This was under the cloud of the stark forecasts of rising unemployment in 2021. In the run-up to the announcement, there had been murmurs about the move to a green-led recovery with Boris Johnson leading the charge on this. The reality of what was released did not match up to a complete green recovery but instead presented a substantial shift to move the economy forward and not hark back to our old economic plan relying on fossil fuels.

There are positive aspects from both the Chancellors spending review and the Prime Ministers ten-point plan for a green industrial revolution. Examples of these include the targeted quadrupling of wind energy capacity and the early phase-out of fossil fuel vehicles. Along with this, there will be investments into active modes of transport, home insulation, peatland restoration and tree planting. This shows that the government understands what measures are required to combat the climate and biodiversity crisis. Commendable also is the increased spending budget of DEFRA which will help support improvements in the Circular Economy.

However, all these measures are not fully backed up with the sort of capital that would constitute a green industrial revolution. It is hard not to be disheartened that this great reset opportunity, with all the clear economic cases for greater green investment, has not been capitalised on. Particularly when across the pond, the newly elected President has stated that there COVID recovery is going to be intrinsically linked to growing green jobs.

As it stands the Prime Ministers green industrial revolution is backed with around £12bn in public funding, which is, of course, a large sum. Though it pales in comparison when compared to the £27bn which remains allocated for road building and improvements in the Chancellors “once in a generation” infrastructure investment.

In a time when other nations (such as France and Germany) are recognising the necessity and opportunities of green investment, it is a huge setback that our government has dropped the ball. Especially in the year where the UK is hosting COP26 and in the critical position of setting the example for climate leadership. As well as this, a strategy for a green recovery is overwhelming well supported by the UK public.

Let us be hopeful that this is simply the start of the move towards a green industrial revolution. Many companies have stepped up this year and become the driving forces behind the climate crisis conversation, with huge numbers releasing net-zero goals. Could industry alternatively act as the key driver behind the much-awaited green industrial revolution?