My Lords, I declare my interest as co-chair of Peers for the Planet. I welcome the Minister to what I believe is her first full debate in the House and I thank everyone in the staff administration who has made it possible for us both to be present in the Chamber today.
“This crisis offers us a once-in-a-lifetime opportunity to rebuild our economy in order to withstand the next shock coming our way: climate breakdown. Unless we act now, the climate crisis will be tomorrow’s central scenario and, unlike Covid-19, no one will be able to self-isolate from it.”
Those are not my words but those of Mark Carney, the former Governor of the Bank of England, his successor, Andrew Bailey, and other European bankers who argued this week for a recovery that places our net-zero objectives at its heart.
The last three months have been transformative, not just for millions of individuals and families but for institutions—look around this Chamber today—and for the entire governance of our country. The crisis has made us examine what and who we really value, recognise better the people on whom we depend and, amid the pain of separation, sickness and bereavement, appreciate the kindness of strangers and acknowledge our shared fragility and vulnerability.
While individuals have often felt powerless, unable to live their normal lives, the Government themselves have in many ways been empowered by an overwhelming threat and the public response, so unprecedented restrictions have been imposed and unparalleled amounts of public money spent to save lives and support jobs and businesses. Not just the extent but the speed of decision-making, innovation and delivery has been transformed. Government, organisations and individuals have made changes in days that in normal times would have taken years to achieve.
The fight against Covid-19 is far from over, but the first phase and the economic measures that anchored it are coming to an end. We need now to replace those short-term measures with a long-term strategy to rebuild the shattered economy, to replicate the sense of determination, to act at speed, to do whatever it takes.
The pandemic has distracted attention from the climate change crisis, but the imperative of tackling that overwhelming threat has not diminished. Without urgent and radical action, the world faces a dystopian future: extreme weather events; forest fires and melting ice caps; the spread of disease vectors; mass climate migration; and threats to the very existence of countries and communities vulnerable to sea-level changes.
The need for urgent and sustained action has been acknowledged internationally, but reaching the targets set out in the Paris agreement will be extraordinarily challenging. This year, CO2 emissions are expected to fall by 8% because of the global downturn that coronavirus has brought. To achieve our 2050 targets, we need to replicate that fall every year until then—and without bringing the world to a standstill.
My Lords, it is a great pleasure to follow the noble Baroness. As I have only two minutes, I will not develop the many points on which I agree with what she had to say. In the absence of the Government providing us with an opportunity for a two-day debate on the economy, which is what is required, I will focus on the catastrophe—for that is what it is—we face in the fourth quarter of this year as a result of the circumstances we find ourselves in. A great tsunami will sweep away the jobs of many people who thought they were in secure employment. It is not beyond the bounds of possibility that we could be looking at 3 million or more people with no jobs.
The extent to which those people will be able to find new jobs will depend on the nature of the recovery. Most people have abandoned the idea that it will be V-shaped; perhaps it will be L-shaped. How quickly the economy recovers will depend on how quickly we can end this lockdown and Ministers can get their act together and decide where our priorities should be.
Earlier today I asked the Minister to indicate what assessment had been made of the number of people who would lose their jobs as a result of two-metre distancing, as opposed to the one-metre distancing recommended by the World Health Organization. He did not answer the question. The Government will have to look at how quickly we can free up the economy and save those jobs that are disappearing even now. Many of the people on furlough schemes are already out of work and will find themselves unemployed when the furlough ends. The solution for the Government is not to put up taxes or cut public expenditure but to go for growth. To quote Ronald Reagan, the deficit is
My Lords, this is an important debate. As we all know, Covid-19 has had an unprecedented impact on the domestic and global economies. Some 3 million people have applied for universal credit and a significant proportion of the workforce is furloughed. We are still uncertain about when schools and universities will return to normal or when graduates will be able to find jobs. Yesterday the OECD warned that the UK is likely to be the hardest hit of all major economies. That should concern us all, but it should also motivate us to break from the past and rebuild in a fairer, cleaner and more sustainable way.
I think we all agree that GDP, despite its importance as an indicator, should no longer be the only way we measure economic success. Among other things, we need to embrace means of improving well-being and boosting social mobility. A fairer economy means tackling health inequalities, rebalancing the regions and getting to grips with the issues that prevent individuals from certain ethnic or socioeconomic backgrounds meeting their full potential.
Doing this will require new policies rooted in a new consensus. We need to change, from how we engage with businesses and citizens to how we restructure central government. For example, should there be a Minister with a formal responsibility for economic fairness? Should that Minister sit in the Cabinet? How will the Government ensure that such a Minister can work effectively across all departments?
The scale of the challenge we face is significant. Very little good will come out of Covid-19, but acceptance of the need to reshape our economy could be one glimmer of hope.
The horrific killing of George Floyd has forced us to confront race injustice, which must be tackled in the economy we build for the future—just as much as we tackle climate change, Brexit, Covid, generational injustice, regional inequalities and the fourth industrial revolution. I challenge every business to embed diversity and the Government to require every public company to put social and environmental stewardship on a par with shareholder returns. A shift to a green economy is urgent as we run out of time to limit climate change, and I support the proposals my noble friend Lord Oates will detail in this debate.
I turn to the gig economy, because I anticipate that many who have lost or will lose their jobs will turn to self-employment. As the IFS has said, they will be primarily the young, low-skilled and poorly paid—it could have added BAME—workers. The Government must at once implement the Taylor review and remove the abuses within the gig economy. Flexibility for a company should not equate to an absence of rights for a worker. We will need new approaches, such as portable benefits, minimum hours and a tax system that recognises risk.
Secondly, we cannot again face an abyss or allow so many to. The Government need to sign up to the universal basic services agenda, including in housing, to put a proper floor in place for everyone. That would also encourage creativity, innovation and risk-taking, which are vital to our future.
Lastly, in dealing with Brexit we must not take a “charge of the Light Brigade” approach. A senseless order must be countermanded and an effective negotiating strategy put in place to conclude transition, even if it means an extension.
My Lords, I warmly welcome this debate. The country faces the triple challenge in the next decade of the threat of climate change, the deepest recession for generations and the health challenges of Covid, all of which will exacerbate existing inequalities. I support much of what other noble Lords have said and will focus my remarks on the vital theme of digital inclusion.
As we discovered through the pandemic, the key to much of life in lockdown has been digital access—in churches, charities, schools, universities and business. As the Government recognise, one of the keys to a cleaner and sustainable economy is a fair and ethical digital sector, but it is the key responsibility of government to ensure equal access for all. The government report exploring the UK’s digital divide is to be welcomed, as is the DCMS industrial partnership through DevicesDotNow, announced in April, to provide equipment and access to as many as possible of the 1.9 million UK households without internet access.
However, the digital divide in this country was already substantial before the exacerbating effects of Covid-19. Only 47% of low-income households have broadband internet at home. Britain is ranked only 34th in the world in the broadband speed league. Brad Smith likens rural broadband to electricity. A fair, clean and more sustainable economy depends on possibility, not just affordability, of access. When will the Government commit to making digital access a fundamental right as essential as access to home heat and safe drinking water? Does the Minister agree that a post-Covid economy that lacks fast and affordable internet access for all cannot be fairer, cleaner or more sustainable?
My Lords, I congratulate the noble Baroness, Lady Hayman, on introducing this important debate. I speak as a civil engineer and draw attention to my interests in the register. In the limited time available, I will make three points. These relate to carbon, resilience of our infrastructure and prioritisation of resources.
First, on carbon, the Government have legislated to cut greenhouse gas emissions to net zero by 2050. We have a long way to go to achieve this, and we must act quickly. We require smart engineering to minimise the use of materials and energy, while still ensuring the resilience of our infrastructure. This can be achieved by many innovations, including the latest digital and sensing technologies. We must be innovative with green stimulus programmes. We should be planning modern transport infrastructure, reducing car use and pedestrianising cities. We should construct more renewable energy sources such as offshore wind. Carbon capture and storage should be exploited for low-carbon production of cement and hydrogen fuels. All such initiatives will involve welcome new employment opportunities, requiring extensive technical training and reskilling.
Secondly, all the new infrastructure that we build must be cost-effective and resilient. Covid-19 has forced rapid changes in practice on our society. It demonstrates the opportunity to do things differently. We must not revert to designing and constructing infrastructure in the same way as before. We must apply the latest technologies to find ways of doing more for less, but still ensuring resilience.
Thirdly, how should we prioritise our resources? Much of our infrastructure is old; a lot of it is Victorian. We should exploit the latest digital and sensing technologies to optimise the assets that we already have by measuring and understanding their performance. We should fix them before rushing to build new infrastructure. In summary, we should exploit the very latest technologies in the post-Covid-19 recovery plan. We need all our engineering ingenuity to reduce carbon, increase resilience and preserve resources.
My Lords, we now know that we have a huge task ahead to secure our economy following the Covid crisis and our post-EU situation. As one of those involved in the rollout of development corporations in the most needy regions of our country in the 1980s and 1990s, I would support their implementation again to help us recover. Choosing the areas of the country most affected by the current crisis and installing development corporations under enlightened and strong leadership, we can replicate the success of the earlier examples that rejuvenated the local economies of many places, including the north-east and Yorkshire. The corporations not only produced fresh enterprise, including many new-technology businesses, but improved the environment in their areas of operation. Maintaining an emphasis on sustainability and job creation with an eye to future opportunities, they could again be the basis for recovery and greater geographical equality in this country.
One of the most important powers ceded to the corporations was that of fast-track planning. Decisions were taken and investment obtained on a new basis that fully considered all aspects of community needs and environmental enhancement. In many cases, we were able to encourage enterprise to come to local populations, thus minimising the need for unnecessary travel. The boards comprised representatives of business, workers and the community. In the main, they made very good decisions, and the evidence of success is still to be seen today.
Looking ahead, the challenges seem enormous, with the shrinking of our GDP predicted to be 12% this year. Many sectors are affected, but the remedies lie not in old approaches but in new technology, job creation and, of course, care for our environment. These things are not incompatible.
My Lords, I too believe that we should learn from the past without living in it. In 1998, we introduced the new deal for the young unemployed, which included in it a particular strand for environmental work, but crucially for training and for jobs of the future. We face an even bigger catastrophe now and therefore we should mobilise, learning from what happened previously, and ensure that we link that to further and higher education.
The importance of research and knowledge transfer cannot be overestimated, but this is a devastating moment for our university sector, as money that was previously coming in from overseas students, particularly postgraduates, which funded and cross-subsidised the research agenda, will not be available. I hope that the Minister will be able to encourage the research sustainability task force to come forward urgently and encourage the Government to take up its recommendations and fund them properly, so that we can take up the work of the Advanced Manufacturing Research Centre at the University of Sheffield and partnership programmes across the north of England. This will help us to break the triangle of Imperial, Oxford and Cambridge as we rebalance our economy and our future.
Crucially, time is running out: we see from the discouragement of people using public transport because of the two-metre rule that traffic is already returning to previous levels. Pollution can even be tasted in the air that had become so clean over the past two months. Linking job creation for young people and research and knowledge transfer from our universities with immediate action to avoid a return to the pollution that we experienced earlier this year will be vital if we are going to have that sustainability for the future.
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After the last recession, there was a sharp rebound in emissions due to a wave of carbon-intensive stimulus packages. While it is tempting to rely on familiar levers, these would in reality bring lower returns and lock us into unsustainable models. Nor, particularly given the disproportionate effect in health and economic terms that Covid has had on the most disadvantaged—the poor, the sick and ethnic minorities—can another round of austerity be contemplated. The 2008 crisis taught us that recovery policies focused on investment were more effective at restarting the economy than austerity-based approaches.
Fortunately, when looking at investment choices and stimulus policies, we do not have to choose between tackling the climate crisis and rebuilding the economy. In fact, the evidence suggests that clean stimulus strategies are likely to result in net positive gains for the economy and for society. This is increasingly recognised through the strategies being pursued across the world, with ambitious and extensive green stimulus programmes. It is also why the business community is restructuring its investment plans accordingly. In the wake of Covid-19, global businesses worth $2.4 trillion have called for a green recovery plan, and over 200 leading UK businesses, investors and industry networks, ranging from Lloyds Bank to Greggs, from Tesco to Sky, have stated publicly:
“Efforts to rescue and repair the economy in response to the current crisis can and should be aligned with the UK’s legislated target of net zero emissions by 2050 at the latest … we must use the recovery to accelerate the transition to net zero.”
So what are some of the practical, high-potential policy opportunities? Renewable energy in the UK has showcased what is possible, making renewables the cheapest form of new power in virtually every major economy. At midnight on Wednesday this week, Britain passed the milestone of having gone two full months without burning coal to generate power; 10 years ago, we depended on coal for 40% of our electricity. As electricity demand bounces back, our energy sector is set to create 400,000 new, clean jobs between now and 2050 to meet our net zero target. Our wind sector has already established pools of technology excellence in former coal communities, while further jobs will open up across the UK requiring a diverse mixture of skills, including, importantly, in rural and coastal areas. But to capitalise on this potential, we need to address barriers such as planning policies which create obstacles to onshore wind projects and the clean electricity they produce. Perhaps I might recommend my Private Member’s Bill on onshore wind to the Minister.
In transport, there are myriad possibilities, from electrifying railways and having overhead cabling on highways for HGVs to investing in clean public transport. Networks for walking and cycling have already been scaled in cities such as Manchester and London since the lockdown. Transition to electric cars needs to be fast-tracked. We need to drive both supply and cost reductions, offer financial incentives to replace polluting vehicles with electric ones, and accelerate plans for a national network of charging points.
During the current crisis, remote working has revolutionised how we participate in the economy. Many people have no desire to return to the tyranny of the five-day office commute and flights to non-essential meetings. We need to build on this. Investment in full- fibre broadband could be one of the most important enablers for behaviour change, reducing journeys, emissions and pollution while promoting social inclusion. Efficiency in housing and building offers another strategy area where what is good for the economy is good for net zero. Retrofit is a resource-intensive job creator, and one of the cheapest ways to reduce emissions, but has suffered from an uncertain policy framework. Fixing that can offer a quick first wave of demand for the construction sector, with knock-on benefits throughout the supply chain, as well as addressing fuel poverty. Public buildings, including schools and educational facilities, could lead the way.
Others will speak, I am sure, of the possibilities that the UK’s world-leading track record in R&D innovation can open up in areas such as hydrogen, batteries, carbon capture and storage, circular business models and much more. Our natural assets also hold immense potential, where investing in large-scale mixed tree planting, creating productive forests, and restoring carbon-rich peatland and marine environments, can act as critical carbon sinks while supporting countryside and coastal communities.
Not all this is down to government alone; our financial system must also play an instrumental role. We already know that, in the last decade, listed companies with green activities have performed better than fossil-fuel stocks and that, during the pandemic, ESG portfolios have fared better than conventional ones. Investors need to align their investments to our obligations under the Paris agreement, report on climate risks and set strategies to mitigate those risks. The pensions industry could and should make a game-changing contribution by setting a trajectory to redirect the $2.9 trillion in pension funds—our money—into sustainable investment.
Clean stimulus strategies have many attractions as a route to recovery. They bring substantial benefits, such as clean air quality, without the restrictions and sacrifices that the pandemic demanded and without a requirement to slash public spending. They generate high returns while many are mature, proven industries and technologies, not risky ventures. They are labour intensive, creating more jobs than traditional stimuli. Renewables projects have been shown to create twice as many jobs as the equivalent investment in fossil fuels.
Jobs matter enormously, particularly to the young, who face the worst prospects in the projected recession and its horrifying unemployment levels. The OECD report this week made very grim reading. The elderly have suffered most in health terms, but the young are most at risk economically. We need to re-gear our national approach to education, apprenticeships, reskilling and life-long learning, not only to ensure a sustainable future but to support workers whose sectors cannot be sustained, and in regions which need regeneration.
In recognising the profound damage done to our economy and the challenges there will be in rebuilding it, public support will be essential. Public support has been shown, in survey after survey across the globe, for Governments to act to avert climate catastrophe. But to maintain that support, the measures taken will need to be seen to be fair. We need fairness between generations, between regions and between industries. The IFS warned in its report today:
“Britain risks entrenching deep class, ethnic, gender, educational … and geographical divides unless the government acts to tackle inequality.”
Public assistance for conventional industries must be transitional and accompanied by obligations to disclose climate-related financial risks and clear decarbonisation targets. Fairness will also need to govern our tax and benefits regimes. That includes how we tax income and wealth, looking at bold new funding mechanisms for social care and, yes, looking at the triple lock on pensions.
The Prime Minister and other Ministers—the noble Lord, Lord Agnew, did it this morning—have spoken enthusiastically of their commitment to greening our economy, but in practice there remains a frustratingly piecemeal and inconsistent approach to policy-making. The urgency of transformation calls for a coherent vision and steely determination to deliver. Will the Minister indicate today that the Government are committed to placing a climate lens on every policy and Bill they introduce and that they will be explicit and transparent about the contribution each of their proposals will make to getting us to net zero?
I have focused so far on UK strategies, but if we did not know before we certainly know now that we are part of a global community. The world will not come out of recession, any more than it will address the climate crisis, by raising drawbridges and retreating into narrow nationalism.
The UK has an historic opportunity to lead concerted international action through our presidency of COP 26 and our hosting of the G7 next year. I have said before that I believe this country’s contribution to the fight against climate change will be measured not only in the scale of our national emissions reduction but, crucially, in the quality of our global leadership. I hope we will hear from the Minister today that the UK is already working to secure international support and co-operation for a global road map to net zero and the philosophy of building back better.
Clean, fair and sustainable strategies offer strong alignment between tackling the climate emergency and generating prosperity for all parts of our country. They will support structural changes that deliver social, regional and intergenerational gains. They can reskill affected workers, improve physical infrastructure, enhance environmental assets and promote well-being for current and future generations.
I end with a question posed recently by Sir David Attenborough: do we invest money into the practices that take us deeper into this crisis or the solutions that get us out of it? The answer this Government give to that question will define the shape of our economy and society for decades to come.