TUC restates case for properly capitalised green investment bank
Frances O’Grady, who will join a high-profile panel of business leaders at Growing the green economy – the latest of the TUC’s After Austerity seminar, will say:
“With the economy flat-lining and the government failing to deliver the industrial rebalancing it promised, we urgently need to invest in and grow our low-carbon industries. If we do not build a greener economy we will simply not be able to compete in the long-term.
“Unions want to work in partnership with industry to build a greener, more sustainable economy that delivers the good, skilled jobs that Britain is crying out for. As recent TUC research shows investment in green growth really would pay dividends in terms of jobs.
“That is why we cannot afford to squander this opportunity. When it comes to green growth, Britain needs to do much better.
“We can’t just rely on the market to deliver the transformation we need to make. Instead we need proper leadership from the government – not in the years to come, but now. This country has the companies, the scientific know-how, and the potential to lead the world in low-carbon economics – what we need now is the vision to make it happen.
“We need to end political uncertainty around our low-carbon future – the current lack of clarity about the direction of energy and climate policy is causing huge damage. Too often the Treasury and Department of Energy and Climate Change seem to be pulling in opposite directions and this is bad for the long-term investment that green growth requires.
“We need a long-term carbon reduction target for 2030, which must be set out in the Energy Bill – not kicked into the political long grass until after the next election. As six big manufacturing firms recently set out in a letter to the Chancellor, industry needs much greater certainly from our politicians about what the future holds.
“Postponing the decision about our 2030 target until 2016 has only succeeded in creating more uncertainty and threatens to deter businesses from investing. Siemens, for example, has put on hold plans for a new plant on Hull’s docks to manufacture wind turbines.
“This project has the potential to create hundreds of good skilled jobs in a city which until recently had the highest unemployment rate in all the country. This is the effect government dithering is having – it’s bad for business, bad for workers, and bad for Britain.
“What we need is an intelligent green industrial strategy. A strategy that delivers green skills, jobs and industrial development in the areas that need them most – areas like Hull, Middlesbrough, Scunthorpe, Runcorn, Stoke and countless other towns and cities that need a piece of the action too.
“From science, technology and maths apprenticeships to research and development we’ve got nothing to lose by being bold. As Germany and many of our other competitors have shown, smart intervention from government isn’t a hindrance to green growth – it’s an essential pre-condition for it.
“And with Britain’s green manufacturing output contracting in 2010/11, we’ve got a lot of catching up to do. Around a thousand offshore wind turbines are now installed around Britain, but not one was fully manufactured in this country.
“The renewable industry reckons that around 6,500 turbines will need to be installed over the next eight to ten years, making this one of the largest engineering projects in the UK’s history. However, there are real concerns that we do not have the infrastructure to take advantage of this opportunity and all the jobs it would create.
“The transition we need to make comes with a hefty price tag attached of around £250bn but it’s not clear where the money is going to come from.
“In order to make the massive capital investment required, the private sector will surely need some degree of financial support. That’s why the TUC has been making the case not just for a properly capitalised green investment bank, but for a state investment bank with at least £40bn of funding and the ability to raise further sums on the capital markets.
“Once again, there is where we can learn from Germany, whose state bank has supported energy efficiency programmes and enabled firms to make the country a world-leader in low-carbon technologies.
“It is also vital that our energy-intensive industries get the financial support they need to smooth their transition to the low-carbon age. The TUC welcomed the government’s recent pledge to provide £250 million of support to the energy intensive sector, but with the German government offering £8bn of assistance to its industries once again we seem to be playing catch up. “When it comes to growing the green economy, things can’t be done on the cheap.”
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