Sunak Eyes $3.8 Billion of Green Spend to Fuel U.K. Recovery.

The U.K. will pump 3 billion pounds ($3.75 billion) into environmental projects as part of its plans to protect jobs in the wake of the coronavirus pandemic.

But the government’s own climate advisers warned that the announcement does not come close to the scale of investment in green recovery measures being made in countries such Germany and France.

The British plan, which will include a 1 billion-pound program to make existing public buildings greener, will be formally unveiled when Chancellor of the Exchequer Rishi Sunak delivers an update on his plans for the U.K.’s economic recovery on Wednesday, the Treasury said in a statement. A further 2 billion pounds will fund green upgrades to homes around the country, the Treasury said.

“This is going to support around 130,000 jobs across the country, green jobs,” Business Secretary Alok Sharma told the BBC on Tuesday. “We want businesses to be in a position to bounce back as we come out of this pandemic.”

Sunak is under pressure to introduce a meaningful package of measures after a speech last week by Boris Johnson failed to impress most economists and environmental groups, when the prime minister promised to accelerate just 5 billion pounds of planned infrastructure spending.

And while Johnson has committed to a green recovery from coronavirus, the money announced by the Treasury is just a fraction of the 9.2 billion pounds he pledged for energy efficiency in his Conservative Party’s election manifesto last year. Even that full amount would not be enough to match the size of the challenge, according to the Committee on Climate Change, an independent panel advising the government which is chaired by former Tory Environment Secretary John Gummer.

The money pledged by the U.K. is also significantly less than amounts promised by neighboring European countries for environmental initiatives in the wake of the coronavirus pandemic, campaigners said.

“The German government’s pumping a whopping 36 billion pounds into climate-cutting, economy-boosting measures and France is throwing 13.5 billion pounds at tackling the climate emergency,” said Rosie Rogers, a political adviser at Greenpeace. “Three billion pounds isn’t playing in the same league.”

Stakes Raised

The stakes have also been raised by a wave of job losses at major U.K. companies in recent days, prompting concern the nation’s unemployment rate could spike once the government’s furlough program -- which is currently supporting more than 9 million jobs -- starts to wind down next month.

U.K. Businesses Expect to Cull Jobs Once Furlough Program Ends

The chancellor has pledged to use Wednesday’s speech to focus on employment, ahead of a wider package of fiscal measures to boost the economy in a budget in the fall. The Treasury has already said Sunak will announce a 1.6 billion-pound rescue package for theaters, museums and music venues, as well as spending almost 1 billion pounds on tripling the number of traineeships nationwide and doubling the number of work coaches in job centers.

Alongside a 1 billion-pound project to improve the energy efficiency of schools and hospitals, Sunak will announce a 2 billion-pound program that will see homeowners get vouchers worth up to 5,000 pounds to make energy efficiency improvements to their homes. Half of the funding will go to the poorest families, who will get as much as 10,000 pounds to pay for loft, wall and floor insulation, the Treasury said. It estimates the plan will support as many as 100,000 green jobs.

Net Zero

Cutting heat loss from homes will be key to meeting the U.K.’s commitment to net zero greenhouse gas emissions by 2050 and could rapidly create jobs nationwide, according to the CCC. Heating buildings produced nearly a fifth of the U.K.’s emissions last year and the industry remains off track to hit the mid-century target.

Sunak on Wednesday will also confirm funding for a nature conservation program, announced by Environment Secretary George Eustice last week, which ministers say will create 5,000 jobs. He will also earmark 50 million pounds for a pilot project installing insulation and alternative heat sources in social housing, the Treasury said.

The U.K.’s last home insulation program, known as the Green Deal, was scrapped in 2015 after low take-up levels. The CCC has urged ministers to introduce tax changes that favor low carbon heating over fossil fuels and to set a target to phase out new gas boilers by 2035.

— With assistance by Joe Mayes, and Alex Morales

7 July 2020

Bloomberg Green