The Green Party is pressing for a Green New Deal to be placed at the centre of a post-coronavirus recovery package to rebuild the economy on sustainable foundations and tackle the climate crisis.
As the Office for Budget Responsibility (OBR) predicts a 35 per cent fall in gross domestic product (GDP) in the second quarter of 2020, the Greens have called on the government to avoid a business as usual approach when responding to the economic crisis following on from the end of lockdown.
The call comes today on the 50th anniversary of Earth Day (22 April), which the Green Party Co-leader Jonathan Bartley has said serves as an “important reminder that the climate crisis is still looming”.
Based upon work carried out by the think tank Common Weal, the Green Party’s plan reiterates pledges made by the party at the 2019 general election, committing to £100 billion of investment a year (less than five per cent of UK GDP) for a minimum of ten years to develop a low-carbon economy with hundreds of thousands of low-carbon jobs, energy efficient homes and greener transport networks.
Investment would be derived from the Bank of England’s QE (Quantitative Easing) programme and through borrowing to invest. At the general election, the Green Party pledged to borrow £91.2 billion a year, with a further £9 billion coming from increased tax revenues.
Bartley stated: “The impact of coronavirus has laid bare the inequalities that exist in our society and our lack of resilience. The recovery has to spell an end to these once and for all, not make them worse.
“We can direct emergency economic support so that it powers a move to a sustainable, secure economy and make sure, once we come out of this emergency period, we will have an economy and a society that is more able to withstand future shocks and tackle the climate crisis.
“A green recovery is the only way to deal with the huge economic challenges while tackling the climate crisis, creating security and leaving behind the inequality that has damaged our society for so long.”
The plan responds to the OBR’s forecast made on 14 April that the coronavirus outbreak will ‘substantially raise public sector net borrowing and debt, primarily reflecting economic disruption’.
The OBR has made an initial exploration into the economic implications of the Covid-19 pandemic and has created a coronavirus reference scenario.
This model shows real GDP falling by 35 per cent in the second quarter of 2020 and then bouncing back quickly. It predicts unemployment to rise by more than two million people to 10 per cent of the working population in the second quarter, but then decline at a slower rate than GDP recovery.
However, with no relevant precedents to inform its economic assessments, the OBR acknowledges there is no certainty regarding the economic fallout due to the virus, as the economy depends on the effectiveness of public health measures to contain the outbreak.