A cross-party letter, initiated Green New Deal Group members Caroline Lucas MP and Clive Lewis MP, calls on the Chancellor to use next week’s budget to show real leadership on climate.

The letter, signed by MPs and peers from the Green Party, Labour Party, Liberal Democrats, the SNP and Plaid Cymru, urges the Chancellor to address the climate, ecological and social crises by investing in a Green New Deal, in order to transform almost every aspect of our economy and society. Such a programme of investment, the letter points out, would also fulfil government promises to ‘level up’ the nation.

Caroline Lucas MP said:

“Next week’s budget will be a litmus test of the Government’s understanding of the climate crisis, and its ability to deliver on its promise to make the UK the ‘cleanest, greenest country on earth’.

“Addressing the climate emergency must start now and it must become the overarching objective of every branch of government.  That starts with significant investment in our flood defences, our buildings, a sustainable transport system and our power generation, in other words almost every aspect of our infrastructure.  This won’t only help us address the climate emergency, it will also make our economy fairer and fit for the future”.

Investing in an ambitious training and works programme to insulate the 30 million homes and buildings in the UK by 2030 would help deliver on Government commitments to decarbonise and level up the UK, by creating jobs and business opportunities in every constituency.  It would also demonstrate the leadership required ahead of the UK’s hosting of the UN climate summit, COP26, in November.  

A Green New Deal Group briefing, which accompanied the letter, sets out how the Green New Deal could be financed though government borrowing (by issuing bonds) while interest rates are low. Such government borrowing could be financed in a way that also creates a safe place for the nation’s pensions and savings, 1by making simple changes to existing tax incentives. Much of the £70bn saved annually in ISAs could then be invested in government-backed green bonds at an interest rate of 1.85% (the UK government’s current average cost of borrowing) and a quarter of the £100bn currently invested in pensions could be directed into Green New Deal investment.

A Treasury review into how Britain can fund its transition to a net zero carbon economy by 2050 is expected to be published by the end of the year.

Richard Murphy, Green New Deal Group member, and the author of the briefing said:

“The climate crisis is the biggest issue that we face, but it’s important that people see that it can be managed without making their day-to-day lives hard. That’s why we have deliberately shown that simple changes to the UK’s rules on pension and ISA saving could direct all the money needed to fund the Green New Deal in its direction, without creating any additional tax burdens. What is more, they meet the demand people now have for sustainable investment products. In addition, they will help build intergenerational solidarity as older savers help younger people build the future we all need.”

Signatories to the letter are: Caroline Lucas MP, Clive Lewis MP,, Alan Brown MP Nadia Whittome MP, Liz Saville-Roberts MP, Wera Hobhouse MP, Baroness Bennett of Manor Castle, Baroness Jones of Moulsecoomb, Baroness Lister of Burtersett, Layla Moran MP, Lloyd Russell-Moyle MP, Alex Sobel MP, Jonathan Edwards MP, Debbie Abrahams MP, Colin Hines, Convener (Green New Deal Group), Richard Murphy (City University London)