Green stimulus needed to tackle next recession
The UK government should learn from past mistakes and invest heavily in the green economy when the next recession hits, the New Economics Foundation (NEF) has said.
The think tank urged ministers to funnel up to £50bn, or 3% of GDP, into a series of green stimulus packages spread over a three-year period during the next economic downturn. This would include the formation of national agencies responsible for retrofitting all homes, scaling up renewable energy investment and improving infrastructure for electric vehicles.
Although public borrowing would have to rise to fund the proposals, the analysis, published in a new report, shows that this would remain within historical norms.
It states that residential emissions would now be 30% lower if £10.5bn had been invested in a mass insulation project during the last financial crash, with energy bill savings being equal to the cost of insulation after just three years.
Meanwhile, separate research found that nearly half of UK firms expect the country to enter a recession this year, with more than a tenth predicting that the economy will contract by 1%-3%.
The report outlines a series of additional recommendations that the government could carry out to stabilise the economy while moving to net-zero emissions during the next recession. Read it at bit.ly/2QQTe13