New infrastructure bank to drive £40bn green investment

The UK government has announced a “real commitment to green growth” in the 2021 budget – which is music to our ears!

Two environmental pledges were made in the Chancellor of the Exchequer Rishi Sunak’s 2021 Budget.

Green investment pledge one

The first was the creation of a brand-new infrastructure bank based in Leeds, which will be allocated £12 billion in capital and will aim to fund at least £40 billion of green investment, beginning in the spring of 2021. The banks aim will be to assist the UK to deliver its commitment to reach net-zero carbon by 2050. It’s been designed to replace funding that came from the EIB, which the UK will leave after the Brexit transition ends on 31st December.

Green investment pledge two

The second environmental pledge was the announcement of £15 billion which will be put into green bonds, including for retail investors, to help fund the UK’s transition to net-zero by 2050.

Sunak said that the UK must “do things that have never been done before”, emphasising the need for a strong, resilient economy post-pandemic.

“Our future economy needs investment in green industries across the United Kingdom,” he stated in the House of Commons. “We need a real commitment to green growth.”

In addition to the two pledges, Rishi Sunak announced plans for the offshore renewable sector, stating “Offshore wind is an innovative industry where the UK already has a global, competitive advantage, so we’re funding new port infrastructure to build the next generation of offshore wind projects in Teeside and Humberside.”

Is the UK doing enough for a green recovery?

In November 2020, the UK revealed their ten-point climate plan, dubbed the ‘Green Industrial Revolution’. It is worth £12 billion (€13.4 billion) and aims to create 250,000 jobs – which is wonderful news right?

However, in response to the Chancellors budget speech yesterday, Greenpeace has spoken out against the pledges made.
“For all the talk of a green recovery, this Budget suggests the Chancellor has failed to clock the urgency of the climate emergency,” says Rebecca Newsom, Head of Politics for Greenpeace UK.

Rebecca feels that a national infrastructure bank and green bonds could be a great step forward, but without guarantees that they will provide sustained investment to decarbonise industry, transport, and buildings, they are unlikely to do much to advance climate action.
“Successive budgets that approach the climate and nature emergency in a half-hearted manner have left us running out of time and credibility,” Newsom concludes.

UK Homes Grant Scheme

Which has got us thinking about the faltering UK Homes Grant Scheme.

In the UK homes account for around 20% of greenhouse gas emissions and just under 30% of energy use. The Government introduced the Green Homes Grant Scheme with an allocated budget of £1.5 billion for the fiscal year 2020-21.

The scheme opened for applications on 30th September 2020, allowing homeowners and landlords to apply for vouchers to pay for green improvements such as loft, wall, and floor insulation.

The scheme states that: “The Green Homes Grant Scheme is only available to homeowners and residential landlords. Vouchers will cover two-thirds of the cost of eligible improvements, up to a maximum government contribution of £5,000. If you, or someone in your household, receive certain benefits you may be eligible for a voucher covering 100% of the cost of the improvements. The maximum value of the voucher is £10,000.”

However, according to government data, just 6.3% of the £1.5 billion budget for the Green Homes Grant scheme in 2020/21 has been spent and 86% of homeowners reported having a poor experience with the application process.

What are your thoughts on Rishi Sunak’s 2021 budget?

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