The voices of 190,000 UK businesses were represented in CBI’s recent article, ‘Seize the Moment’, which conceptualises how the UK can achieve economic recovery. The report focuses on six business-led opportunities, all of which are forecast to generate around £700 billion for the UK’s economy by 2030.
Between this report by the CBI and the government’s budget documentation for 2021 and ten-point plan, it is becoming more and more clear that the vehicle being used to achieve economic recovery is green energy manufacturing.
It is increasingly apparent that this plan seeks to introduce new policy and increase public investment as well as mobilising private investment. According to the Secretary of State for business, energy & industrial strategy, if executed precisely, this plan has the potential to deliver around £20 billion in private investment by 2030. Simply put, the government’s movement towards a green industrial revolution is captured in one simple goal – invest in making the UK a global leader in green technologies and use this to transform the economy and deliver growth.
Undoubtedly, the saving grace for the UK’s economic challenges last year was the resilience and growth of the property sector. According to ONS, the UK’s average house price has increased by 10.2% in the past year which is the highest annual growth rate the market has experienced in 14 years, according to official figures. Effectively what we witnessed here was a ripple effect. The uplift in demand for property purchases and housing transactions, coupled with the household savings potential accumulated from furlough and working from home schemes, has driven the value of the land to appreciate. We have already seen significant changes in the form of new permitted development rights to support the alteration, and re-purposing, of vacant commercial buildings in prime locations. The question is what is the next step?
The construction of green energy technologies, such as advancing offshore wind, increasing nuclear power and introducing new low-carbon Hydrogen production plants, is referenced by CBI as the first stage towards pioneering the carbon net zero global movement. Furthermore, the government’s increased infrastructural investment will create regional economic clusters and distribute the country’s capital output more evenly. The increasing energy prices, as a result of this, will drive inflation and enable the Bank of England to reduce its quantitative easing programme. Essentially, the government will reduce the amount of public borrowing and increase the UK’s revenue by inducing the positive effects of inflation and generating economic growth.
Some of the positive effects of these measures have already been seen. The BBC have reported a surge in consumer spending, reflecting a boost in market sentiment, of 9.2% by the end of the first quarter of 2021. Institutions such as the Bank of England have continued to forecast Britain’s ‘V-shaped’ economic recovery as data collected towards the end of 2020 and through to the conclusion of the first quarter of 2021, indicated a collective household savings pot of roughly £150 billion. Other sectors are experiencing the positive effect of the UK’s new green energy construction plan as the automotive industry exceeds its production capabilities by an astounding 34,500% from the same period the month previous.
If this growth continues, it is entirely possible for the UK to assert itself as the new global leader in green technology and economic sustainability.