This is an Inside Track long read by Shaun Spiers, executive director of Green Alliance.
A couple of weeks ago Andrew Rawnsley wrote a piece in the Observer outlining some of the radical things a Labour government could do without extra public spending. Here are a few ideas of what it could do for the environment.
1. Use existing budgets well
The ditching of Rachel Reeves’s commitment to spend an extra £20 billion a year on the green transition was a huge disappointment which left Labour with little to say on how to fund its nature commitments. But there is money out there which could be much better spent, in existing farming budgets (see below) and in the £96 billion water companies have earmarked for capital investment from 2025 to 2030.
This is a huge sum of money, equivalent to Labour’s original Green Prosperity Plan promise and a 65 per cent increase on water company investment in the current spending period. If a significant slug of this money was invested in nature based solutions, it would have a big impact on the natural world. But the current regulatory regime prevents it. Sustainable Solutions for Water and Nature, SSWAN, a coalition of environmental NGOs, water companies and others, has set out proposals for a better system. If the current government does not act on them, it should be an urgent priority for its successor.
2. Farming
There is no chance of meeting the country’s legally binding commitments on nature or climate without major changes to land use and farming. Farming reform is politically difficult – ask Ursula von der Leyen – but unavoidable.
As things stand, many farmers earn too little to make their businesses worthwhile: even with public subsidy, upland grazing farms earned an average of just £12,700 in 2019. Climate change is hitting farmers particularly hard and causing food prices to rise. And, on top of that, our food system is killing people through unhealthy diets and putting intolerable strains on the NHS.
Reform is always difficult, but radical reform there must be. The least productive 20 per cent of UK farmland produces only three per cent of the calories we produce, and much of this land is particularly well suited to nature restoration and carbon removal. Green Alliance has set out proposals for how to restore nature, sequester carbon and boost the incomes of poorer farmers without significantly denting food production. Farmers also need a fair deal from supermarkets and a UK trade policy that protects our relatively high standards.
“No farmers, no food” protests should not be allowed to veto the changes the country needs. Many farmers are struggling, but over half of England’s farms are owner occupied and these have an average net worth of £1.9 million. ‘Food security’ is a powerful rallying cry – I have never met anyone advocating for food insecurity – but it is rarely defined. Producing a bit less meat in the uplands will not endanger it. Nor will diet change – less but better meat, more fruit and veg – risk the livelihoods of UK farmers.
There is a future for British farming that will benefit health, the environment and farmers, but it needs articulating. Steve Reed, Labour’s shadow environment secretary, is right to say that “without nature, there is no economy, no food, no health and no society”. His statement that “nature will be central to each of the missions that will define Keir Starmer’s Labour government” is very welcome. What is missing so far is a clear narrative uniting farming, climate and nature policy and details on how he would drive progress towards meeting the 2030 nature goals which are drawing ever closer.
3. Tax and public spending
The tax system should do more to incentivise the good and discourage the bad. As our report, A green tax road map for the future says, in many cases taxes “actively discourages people and businesses from switching to low carbon alternatives or making sustainable choices. And, as fossil fuels are phased out, the revenue from some taxes, for example fuel duty, will fall, creating fiscal black holes. A tax system adjusted for the new economic circumstances would encourage sustainable behaviours and maintain a stable income for the public purse.”
It is encouraging that Rachel Reeves, in her Mais lecture, undertook to publish “a roadmap for business taxation, covering the duration of the parliament”. Much of what we would like to see could be delivered through that vehicle.
We have also produced detailed proposals for reforming transport taxes, including taxing private jets. Tax changes are always difficult because the losers resent their losses more than the winners rejoice in their gains. But a fiscally constrained government that wants to make social and economic progress should overhaul the tax system. It should also look at where money is being wasted, such as the £9 billion Lower Thames Crossing and other new roads.
4. The vision thing
Regardless of money, there is much a Labour government could do to tackle climate change, restore nature, lower bills and improve lives. But it will require a clear vision and considerable political courage (and, yes, I have watched Yes Minister).
The anti-environmentalists in the right wing media cannot be appeased. Labour in government will have to stand up to the sceptics if it is to make the changes the country needs. Fortunately, there is solid public support for environmental action and a clear narrative, articulated many times by Keir Starmer, that it is the way to deliver a stronger economy and better lives.
Green Alliance’s Programme for government proposes no or low cost policies on regulation, international leadership, carbon removal, the circular economy, home heating and much else. They are aimed squarely at improving lives, as well as the environment.
There are two particular areas worth highlighting, one because of its carbon impact, the second because of its centrality to Labour’s plans.
Transport is the sector that has most to do to reduce carbon emissions. Labour is proposing to help more people to walk, cycle or use public transport instead of using the car. This welcome support for change was, of course, labelled “anti-car” by the Sun but, until a couple of years ago, it was also championed by this government. Tony Blair’s government in 1997 suspended road building because it recognised that new roads just generate new traffic. It survived. Labour should stick to its guns.
Second, planning reform. Rachel Reeves has called the planning system “the single greatest obstacle to our economic success”. George Osborne and David Cameron said much the same in 2010 and planning is an easy scapegoat for economic failure. But even if all planning restrictions were lifted, a tall ask in a democracy, we will not get the homes and infrastructure the country needs unless the government also tackles the house building oligopoly, the price of land, the lack of skilled labour, the shortage of critical materials and much else.
Spatial planning has an important part to play in getting Britain building, but a progressive party should not want to “bulldoze” planning. A Labour government should set out a plan for getting the development the country needs and work closely with communities to implement it. We need more planning, not less.
5. Back to money
Much can be done without extra public spending but, to revive Britain’s “low investment, low productivity and low growth” economy and tackle the climate and nature crisis, money will have to be spent. As the Stern Review, the Dasgupta Review and the Office for Budget Responsibility have all shown, the longer action is delayed, the higher the cost will be in the long run. Delay also means passing up the economic opportunities of the green transition.
Labour’s one big spending commitment is its Green Prosperity Plan, a £23.7 billion investment package over five years. This demonstrates that climate action remains a top priority. The Conservatives attack these plans, but the money promised pales into insignificance against the £75 billion extra the UK has had to spend on gas since the invasion of Ukraine (the idea of “cutting the green crap” has not aged well) or the £33.2-£58 billion the government loses to fraud or financial mismanagement in a single year.
If it wins office, there will be huge pressure on Labour to spend more on schools, hospitals, defence and much else. Given its existential importance, nature must not be at the back of the queue. There is a strong case for amending Labour’s proposed fiscal rules. Annual UK investment, as a share of GDP, has been on average four percentage points below that of other G7 economies since 1990. Achieving Labour’s aims for climate and nature and delivering its growth mission will both require further investment.
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