WIREDGOV

In a speech today (Monday 1 July) the chief executive of the business organisation the CBI will warn of the risks of trying to “separate the economy from net zero” and tell whoever forms the next Government they “can’t be pro-growth and deliver for our people and communities, without being pro-green.”

See below for the full speech

Check against delivery

Good morning everyone. 

I don’t think any of us, when we signed up to this conference…

…realised how timely it would be, in the final days of the general election. I know there’s a fantastic line-up for today, with so many important and expert views on our preparedness and the costs of adapting to climate change. 

But I want to take one step further back and talk about the economic opportunities from net zero. The fast-growing technologies that are reshaping everything and which make acting now, not only a moral imperative, but an economic necessity. 

I want to set out why we at the CBI, as the voice of business, think whoever forms the next government can’t be pro-growth and deliver for our people, planet and communities, without being pro-green.

And I want to lay out five steps, to get there. 

Deafening silence

With a name like mine, talk about the weather tends to follow me.

I don’t know about you, though, but in recent years I’ve noticed a darker edge to it. And I can see in the natural world all around us. 

 I remember sitting at a table during the Hay festival in mid Wales about five years ago with an octogenarian farmer, in a particularly hot May. He said he could see first-hand how much the climate, the biodiversity around us, had changed from when he was a young farmer. 

The impact of climate change is already here – it's in our soil, our air quality, and yes, our weather patterns.  

Globally, last year broke every climate indicator we have: it was by far the warmest year on record; observed sea levels reached record highs, and greenhouse gas concentrations continued to rise.1

This statistics will be all too familiar to this audience. Yet this election, you might have noticed what seems like less focus, less animation from all parties about the issue of climate change. About biodiversity loss, net zero and our planet. At times, it has felt that the silence has been deafening. 

As Chris Stark said recently, the oxygen was sucked right out of the UK net zero debate – even before the election began. 

Instead, parties are focused on the economy, immigration, work and skills. And of course – all those issues are important. 

But on the economy especially, it’s a dangerous error to try and separate it from net zero. 

There is still too much in our political discourse that amounts to – ‘can we afford to go for net zero?’

But the real question is – can we afford not to?

I’m sure this audience will be all-too familiar with the cost of inaction the OBR has set out. That the hit to our GDP will be five times higher if we don’t act, than if we act early.2  

According to the GFI’s recent excellent report ongoing damage to nature could lead to a 12 per cent loss in GDP over the next decade – unless we act now.

But there is another cost on top of all that – the cost of falling behind in the global race for cheaper, more reliable, more efficient energy. 

The huge emerging markets for new technologies.  

The size of the prize

We’re in an age when green tech is transforming in the blink of an eye. 

Solar PV went from something that was seen as too costly to make a difference in the early 2010s…

…to what the IEA called in 2020, “the cheapest electricity in history.”4 

And the countries that move fast in these markets, are securing huge global advantages. 

Not only making clean energy and carbon storage cheaper, accelerating the global race to net zero…

…but securing economic success, cleaner air, better jobs, higher living standards and quality of life – for their people. 

The numbers speak for themselves. In 2023, a year when the UK economy flatlined our net zero sector grew by 9 per cent.  

And the UK really has been an early global leader in green. 

We were the first to write net zero into law. 

We launched groundbreaking contracts for difference to speed up investment. 

And in 2020, we were investing the biggest GDP share of any country in the energy transition. 

But now we’ve fallen down the table, behind both France and Germany in overall green investment.

We’ve lost our nimble first-mover advantage…

…to titanic economic packages from the EU and the US. 

We can’t outspend competition like that. The US package alone is estimated at over $1 trillion.5 

But we can outsmart them – by playing to our strengths and acting fast. 

A whole-economy perspective

As one business leader asked me…

Will the new government, whoever it is, be serious about this? 

Will they be prepared to make decisions early so we can have more world-leading clusters like the Solent, which has the potential to develop hydrogen and CCUS to help decarbonise industry and transport?

Or Yorkshire and the Humber, where Phillips 66 are working to decarbonise their refinery and deliver greener, EV battery-grade graphite, with Enfinium leading on CCUS technologies.6

Will they ensure nuclear is part of the mix for the electrification we need? Will they reform planning, get the grid connections we need? Will they do what it takes?

Those are the questions the silence this election has left.

And they must be answered. Because we still have powerful strategic advantages that must not be wasted. 

But to use them to get the sustainable growth we need, we must deliver systems change at speed and scale. And we must think about climate and nature together – not separately – but as two sides of the same coin. 

Nothing less than a whole-economy, whole-government, cross-party approach to land management. Which works with our farming communities as custodians of our land and nature.  To make the whole greater than the sum of its parts – in the race to transform our economy and the world that surrounds us.  

That’s what we do at the CBI. 

With input from every sector, we feed into government how we can help the UK get ahead of the competition to win the race for green growth. 

And I’m  delighted to share that, we have four more great globally listed companies joining us in that journey, as members:

Schroders, Phoenix Group, JLL and Smith & Nephew. 

Together, and with our members across sectors, we’re going to press the next government fast on the reality that net-zero is the opportunity of a lifetime. And if you don’t go for green, you don’t get growth. Not in the long-term. 

Business get it – by playing to the UK’s advantages, by giving up short-term politics for long-term plans…

…by 2030 the next government could add as much as £57bn or around 2.4% to the economy from green growth.7  

Five steps to recharge our economy

Now I want to use the rest of my time to set out five short steps…

…to get us there.  

First – the next government needs to be loud and proud in making green growth part of a new investor pitch for brand Britain. 

No more wavering, no more rowed back commitments. Whoever forms the next government has to let the world know it’s serious about the investment opportunities from net zero, and we’re in this for the long-haul. Make decisions and stick to them.

Whether it’s continuing with the ‘five growth sector’ strategy, or part of a new plan for sustainable growth, the next Chancellor must set out our national stall. 

2: More than a department

Second, if net zero can’t be delivered by one part of the economy, we need to get past the fantasy that it can be delivered by just one department. 

The truth is, Whitehall has never been good at working cross-department, and we must make sure that doesn’t hamper us on green. 

So business wants to see a new Office for Net Zero Delivery based in the Cabinet Office, to coordinate and take a truly strategic approach. 

So we need to see the next Secretary of State for Net Zero not confined to one ministry…

…but hammering on the door of every department to get this done. 

3: A Net Zero Investment Plan

Step three: none of this makes any difference, if the money’s not flowing. 

So the way we outmanoeuvre our competitors…

…is using public spending to crowd in private spending. 

This is a model that we know works.

So what business want to see from the next government, is a Net Zero Investment Plan.

To shine a light on the barriers to investment…

…and take a market-making approach that crowds in the private finance we need. 

And in our tax and green investment report, we’ve laid out ideas …

…like a green super-deduction of 120% – to get investment flowing where it’s needed most. 

4: Transformational tech: 

Step 4: is backing the innovation for the transition. 

Innovation is at the heart of reaching net zero, and there is huge first-mover advantage for those who can get ahead. 

It’s one of the most exciting parts of my job to see the work businesses, innovators and researchers are already doing right across the UK, bringing new tech to market.  

But there’s more the next government can do to back them – and help big ideas scale up to big business.

Like a new Green Innovation Credit to unlock private R&D…

…and lowering corporation tax on green tech profits.

5: A very old opportunity

The final step is maybe the most practically important: the grid.

A century ago next year, the UK pioneered the world’s first fully integrated national electricity grid. It was a source of national pride.

Other countries followed and national grids sprouted up around the world because of UK know-how.

But since then, from leaders, our investment has fallen behind. 

And now, to meet our net zero targets, we’re going to have to build five times more onshore transmission lines by 2030…

…than we’ve built in the last three decades.8

So from a source of national pride, our grid has become the Achilles heel of any net zero project. 

I heard from one member in the North East, one of their projects had been held back 15 years waiting to connect to the grid. 

And any recent attempts to expand and upgrade it…

…have run up against nimbyism and local political snares. 

This matters: tens of billions of pounds of net zero investment – and the future attractiveness of the UK as a place to invest at all – hinge on the grid. 

So it’s obvious the next government must back rapid grid upgrades…

…and work in partnership with business – to get them done.

Without that, there’s no net zero, no green growth.   

But it’s important to remember, this isn’t just a problem for us. When I was at the B7, the business equivalent of the G7…

…it was clear that grid upgrades are a challenge for every country. 

So if we move fast here, and show the way to a future-proof, flexible, digitised grid…

…then, just like a century ago, we can export British engineering – 

…to the tune of up to £18bn in services exports by 2030.9

For our economy, our people – and our planet. 

So there you have it  five steps to green growth. But I have one final ask. 

The value of trust

Because you know what? Despite all the politics, the public know energy transition is what we need. And they want to get there. 

Polling from Opinium and RenewableUK shows four out of five people want a cross-party consensus to boost green investment.10

And most people still back our net zero targets. 

The problem is, because of all the politicking in the last few years. 

The inconsistency and rowing back on commitments…

…just one in five still think politicians can get us there by 2050.11 

So our last ask for the next government comes down to one word: trust. 

Business can do our part.

We can deliver on construction. We can deliver on finance. 

But we need politicians to restore trust, and bring the public with them, to get net zero and the energy transition done. 

Politicians have to be honest – more honest than perhaps they’ve been. 

There is a cost to energy transition. In public spending, to crowd in private investment. 

But when you compare that to the cost of falling behind in new markets that could regenerate our economy…

To the cost of repairing the climate damage you’re going to hear about throughout today…

And to the cost of failing in our moral duty to our children and future generations…

It’s clear we need to act now. And fast.                          

Thank you.