Investing in a green recovery could create 1.6 million new jobs after Covid crisis, new IPPR report finds

The government should invest urgently in a jobs-led recovery focused on helping the UK meet its targets for improving air quality, lowering carbon-dioxide emissions and restoring nature, according to a new report by IPPR. 

The think tank warns today that the investment promised so far by the Prime Minister falls well short of what’s needed. Greater investment in a green recovery and clean, low-carbon jobs – including a nationwide drive to insulate homes and prepare for new low-carbon heating - could create 1.6 million new jobs, IPPR calculates. 

That makes it the most effective route out of the post-Covid economic crisis, the think tank says. 

Such a move would attract strong public support, according to new UK-wide polling of more than 2,000 adults by Savanta ComRes for IPPR.  

When asked about priorities for investment, three in four UK adults (74 per cent) agree that the government should spend more on action which will address climate change and protect the environment. There is similar support for low-cost loans or grants to households to support the installation of home insulation, with 76 per cent backing the idea.  

Carbon-intensive investments received the least support of all options polled, with just one person in 10 wanting the government to prioritise extending the fuel duty tax cut (11 per cent), building roads (10 per cent) or providing financial bailouts to airlines (7 per cent). 
 
Economists at IPPR examined a range of low-carbon jobs and industries that could help kick-start the economy as it recovers from the impact of the Covid crisis. Without government intervention, they found, unemployment could rise by more than 2.1 million to almost 10 per cent of the workforce. But “clean recovery” investment could generate about three quarters of these, including by: 

• Improving the energy efficiency of homes, preparing them for the switch to low-carbon heating systems such as heat pumps and district heating, and building new zero-carbon social housing, which could generate 560,000 jobs 
• Supporting 700,000 new jobs in social care and health care, which would meet growing need over the next decade while being in line with a low-emission economy 

• Investing in better and more sustainable public transport, including rail and electric bus services, walking and cycling infrastructure and electric vehicle charging in our towns and cities – which could generate more than 230,000 jobs 
• More jobs would be created by investing in tree planting and peatland restoration across the UK (46,000).

The IPPR report, Transforming the Economy after Covid-19: A clean, fair and resilient recovery, comes as the chancellor prepares to announce plans to support the economy as the jobs furlough scheme unwinds. It sets out detail of the investments needed and highlights how this can also support efforts at “levelling up” to address inequalities between nations and regions. 

These include railway construction projects, with greatest jobs impact in the North West, the East Midlands and Yorkshire and the Humber; and investment in low emission housing, with notably high impact in Scotland, the North West and the South East (outside London). 

Further poll findings by Savanta ComRes for IPPR include:  

• Three quarters of all adults (74 per cent) agree that actions to address climate change can help create jobs and opportunities for the UK, while two thirds (67 per cent) agree these actions can create jobs and opportunities in their local community 
• Seven in ten UK adults (71 per cent) say that the government should spend less on actions which will worsen climate change and harm the environment 
• Two thirds support low-cost loans or grants to households to buy electric cars (65 per cent), increased subsidies for public transport (66 per cent) and higher charges on products which have a lot of packaging (65 per cent). 
• Support for actions that prioritise climate change and protecting the environment rises to 78 per cent (compared to 74 per cent nationally) amongst those living in seats won by the Conservatives from Labour in last year’s general election, including those sometimes referred to as ‘Red Wall’ seats. 
• Most people living in such seats (55 per cent) also say that the government should be more ambitious in addressing climate change and protecting the environment, a higher proportion than amongst UK voters overall (48 per cent).  

Carsten Jung, IPPR Senior Economist and co-author of the report, said: 

“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. 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.” 

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.” 

Carys Roberts, IPPR Executive Director, said:  

“The UK faces an unprecedented economic crisis. As well as protecting businesses and workers, it is vital that the government sets out a plan for the economy of the future. Tackling the climate and nature emergency must be at the heart of this plan, so that we don't leave one crisis to plunge headlong into another.  

“Our report sets out the clean jobs that could provide good-quality, well-paid work over the next decade, if the government acts - from retrofitting houses to be energy efficient, to social care.” 

1. Previous work by IPPR has shown that there is a £30 billion annual investment gap between the government’s current planned spending and what is needed to deliver its ambitions for net zero and to restore nature. An additional £15 billion per year is needed to deliver the number of affordable homes required to meet housing need. Additional significant investment will be needed every year to meet the needs of the NHS and in social care.
2. The jobs figures are collated from a variety of third-party sources, including government statistics. Because they are based on varying assumptions they should be treated as broad estimates. The total number represents jobs that could be created up to 2035. More details are contained within the report.
3. Savanta ComRes interviewed 2,120 UK adults between 19th and 22nd June 2020. Data were weighted to be representative of UK adults. Savanta ComRes is a member of the British Polling Council and abides by its rules. Full polling details will be available on the IPPR website.