Rishi Sunak has confirmed a £3bn green plan to boost employment and upgrade the UK’s infrastructure, but industry leaders have warned more needs to be done to power the recovery.
In the much-awaited summer statement, the Chancellor said he planned to tackle the economic challenges of the pandemic with a “historic investment in infrastructure”.
Responding to the statement, Shadow Chancellor Anneliese Dodds said the green jobs plan “barely touch” the levels pledged in other countries, saying it falls short of the amount committed in Germany.
Sunak said £1bn of the infrastructure package will be spent on improving the energy efficiency of public buildings such as hospitals and schools.
The rest of the funding will be for a “Green Homes Grant” – from September people can apply for vouchers to make their homes more energy efficient which in turn will create more jobs.
The grants will cover at least two thirds of the cost, up to £5,000 per household.
Alistair Phillips-Davies, chief executive of energy firm SSE, welcomed the announcement but warned more would need to be done for the recovery.
“Funding for green homes and energy efficiency is a welcome boost but more action will be needed in the National Infrastructure Strategy and the Autumn Budget to build a long-lasting green recovery.”
The SSE boss added that the government “can unlock more from industry with stronger policy signals, particularly on carbon capture and storage and the rollout of electric vehicle charging infrastructure”.
Certainly from an investment perspective, Sunak’s infrastructure announcement will be welcomed by construction firms, whose work ground to a halt over the lockdown period.
“But these stocks aren’t out of the woods yet,” says Dzmitry Lipski, head of funds research at Interactive Investor. “Depressed office and retail occupancy rates could be an anchor to growth prospects… and it is arguably property developers that are likely to be the net beneficiaries.”
Sir John Pearce, chairman of the government initiative Mildands Engine, said the Chancellor’s announcement “can only be the beginning.” He called on the Chancellor to fund the development of schemes such as Midlands Engine Rail as soon as possible “so that they are ready to build in two or three years, rather than seven or eight years.”
“Our public transport system needs investment, and I hope such funding will be forthcoming in the autumn Budget. It is essential that we build an integrated transport network across the region,” he added.