Coronavirus: Investing in green recovery could create 1.6 million new jobs

UK chancellor of the exchequer Rishi Sunak. Photo: PA via Getty Images

Investing in green recovery is the “best way” to boost the UK economy after the coronavirus pandemic, and could create 1.6 million new jobs, a new report has found.

Think tank IPPR is urging the government to invest in a jobs-led recovery plan focused on helping the UK meet its targets for improving air quality, lowering carbon-dioxide emissions and restoring nature.

A drive to insulate homes and fit low-carbon heating could create 1.6 million new jobs, according to the IPPR report ‘Transforming the Economy after COVID-19: A clean, fair and resilient recovery.’

The IPPR recommends increasing the energy efficiency of homes by switching to low-carbon heating systems, such as heat pumps and district heating, and ensuring all new social housing built is zero-carbon, could create 560,000 jobs.

Investing in better and more sustainable public transport, including rail and electric bus services, walking and cycling infrastructure and electric vehicle charging points in towns and cities across the UK could generate more than 230,000 jobs, according to the IPPR.

READ MORE: Government action needed after 'historic setback' in UK economy

The report also highlights that supporting 700,000 new jobs in social and healthcare would meet growing need over the next 10 years while being in line with a low-emission economy.

The IPPR is also calling on the government to invest in tree planting and peatland restoration across the UK, which could support a further 46,000 jobs.

IPPR economists calculated that without government intervention unemployment could rise by more than 2.1 million to almost 10%.

The report comes as UK chancellor Rishi Sunak prepares to announce plans to support the economy as the government’s job retention scheme unwinds. New figures from the Treasury show 9.3 million people had been placed on furlough as of 28 June.

The job retention scheme is set to run until the end of October but new people cannot be added to the scheme from Tuesday (30 June). Employers will also be gradually asked to contribute to the cost of the scheme from August.

READ MORE: Furlough number hits 9.3 million days before cut off

Experts fear the end of the job retention scheme could herald a surge in redundancies as many of the 9.3 million people on furlough find they don’t have a job to return to.

“The Covid crisis is an unprecedented disruption of the labour market. Even as the economy reopens, many furloughed workers might not be able to return to their old jobs,” said Carsten Jung, IPPR senior economist and co-author of the report.

“Concerted investment by the government, businesses and households can generate employment in new future-proof sectors. 

“Now is the right time to invest in and drive a sustainable recovery. Borrowing costs are currently so low that even doubling the government’s debt would mean paying less to service it than at almost any time since 1950. And with many workers and businesses having spare capacity, shoring up demand now will also benefit the long-term health of the economy.” 

Three quarters (74%) of UK adults said they agree that actions to address climate change can help create jobs and opportunities for the UK, according to a recent poll by Savanta ComRes for IPPR.

Seven in 10 (71%) UK said that the government should spend less on actions which will worsen climate change and harm the environment.

READ MORE: Boris Johnson warns UK faces 'a real, real crisis' on economy

Two-thirds (65%) support low-cost loans or grants to households to buy electric cars, 66% want more subsidies for public transport and 65% agree with higher charges on products which have a lot of packaging.

Luke Murphy, IPPR associate director who leads its work on the environment, said: “Our report finds that clean recovery investments are good for jobs and good for the environment — and what’s more, the public agree. 

“We urgently need to make substantial investment to insulate the nation’s homes, upgrade our public transport network and plant trees and restore nature. We can’t afford to wait for this: now is the time. These measures would not only create 1.6 million much-needed jobs, they’re popular with the public. 

“If the prime minister really wants to emulate Roosevelt’s ‘New Deal’ then the government must significantly increase investment beyond what has been promised so far.”