What could the green economy expect from a Labour Government?

2 July 2024 - Business wants clarity, stability, commitment and delivery from the government elected on Friday, writes CISL's Eliot Whittington.

There is an undeniable note of change in the air. While the general election is yet to come, it would represent an almost inconceivable polling and political upheaval for Keir Starmer not to become Prime Minister on Friday.   

And yet despite that there's still considerable uncertainty about what this will mean for UK action on climate change, nature and for the developing UK green economy. Of course, uncertainty is inherent in any change, but it's been a recurring feature of this election campaign that the leading parties, both Labour and Conservative, are not really facing up to how they are going to prioritise and navigate what is undeniably a challenging agenda for any government. 

It is therefore useful to take stock on what we do and don't know about our incoming government's green plans and the level of commitment it has to them, as well as the reception they might receive.  

We know that these issues, and particularly energy reform, are high on the priority list for Labour. Great British Energy and the promise to decarbonise UK power form one of the party's five key "missions".  

We think Labour leadership include a significant number of people with real understanding of the green transition and a track record of supporting it – most notably Ed Miliband, but including many other Shadow Cabinet members. Keir Starmer himself, while less established, seems enthusiastic and genuine in his commitment to these issues. 

And we know that a major part of the coalition of voters that will take Labour into government expect and demand to see real progress on climate action. The pressure on Labour to act from within and without is real and considerable. 

But the Conservative Party has its own share of committed environmentalists, and as polling by the Conservative Environment Network and others shows, there's significant majority support for environmental protection amongst Tory voters. However, despite this, delivery has been patchy – with notable successes and failures, whether according to what we need for our climate targets, or even based on goals the government has set itself. Under Rishi Sunak's leadership this patchy performance has hardened into a distinct lack of leadership. 

The devil is in the detail when it comes to delivering. We have learned that when it comes to energy and climate policy, what governments promise and what they achieve are often very different.  

We are currently way off track for our next batch of climate targets, despite repeated rhetoric and policy initiatives to the contrary. The government faces an extensive and difficult to-do list after the election.  

The financial hangover of the pandemic, an economy languishing with stagnant productivity, public services underfunded and in disrepair, national and global politics polarising, the AI revolution upending previous economic models, conflict on the borders of Europe, and inequality and inflation have put much of the country into increasingly desperate financial straits.  

But beyond a limited manifesto we're sighted on relatively little detail on how Labour will prioritise and organise itself to cope with the polycrisis. The Shadow Cabinet includes several smart and skilled politicians, but also very little experience of government. So, we don't know how they will face up to this challenge. There are real question marks about how they will hit the ground running in the way they tangibly need to. 

The relatively limited visibility on the hard choices and trade offs the incoming government will make means there are also question marks as to how any new plans and actions will go down with the wider public. There is a tangible appetite for change, but relatively limited enthusiasm for Labour. How much patience does the country have for the upfront investments and decisions that may take time to pay off? We don't know.  

Another thing that is unclear is the shape of the political pressures from the opposition.  

We know this campaign has seen a sharp increase in support for Reform UK – a party that has broken from the mainstream consensus to oppose climate action – although how much stability and substance to that support is still to be shown. Other opposition parties, such as the Greens and Liberal Democrats will be pressing the government to be more ambitious – but what shape will the Conservative Party end up in? A long tradition of conservation and environmentalism within the Conservative Party and valued by many of its supporters looks under threat.  

This level of volatility and uncertainty is uncomfortable for business. There is a huge amount of business support and appetite to invest in developing the UK's green economy. But confused and ineffective government repels this support – making it harder for businesses to have the confidence they need to act. 

As part of London Climate Action Week, many of the most influential and active business networks in the UK joined together under the banner of the UK Business Group Alliance for Net Zero. The message from discussions was clear. Business wants clarity, stability and commitment, and above all delivery, delivery, delivery.  

Labour has many of the ingredients needed to supply this delivery. The green economy will be watching to see how well they follow through. 

First published in BusinessGreen