Continuity Miliband: Labour's Green Economic Recovery

Labour's Green Economic Recovery is a huge retreat in terms of ambition and understanding of how to decarbonise the economy particularly when it comes to public ownership.

5 min read

Earlier this month, Ed Miliband launched ‘Labour’s Green Economic Recovery’ report, which aims to set out the “foundations for a credible, jobs-rich green recovery”. Unfortunately, the document marks a significant retreat from the ambitious policies developed under the leadership of Jeremy Corbyn and, if implemented, would fail in its promise “to deliver system-wide change”.

During Miliband’s tenure as leader, Labour avoided mention of public ownership in general and specifically in relation to green energy. Instead, the 2015 manifesto committed to giving the Green Investment Bank, which had been established by David Cameron’s government, “additional powers so that it can invest in green businesses and technology” and to creating “an Energy Security Board to plan and deliver the energy mix we need, including renewables, nuclear, green gas, carbon capture and storage, and clean coal.”

Under Miliband, the aim of the GIB and ESB would not have been to move energy-production and supply into democratic, public control but, rather, to “reintroduce proper competition” and “offer a range of financial solutions to accelerate the rate of private sector investment in clean energy”.

This approach changed once Jeremy Corbyn became Labour leader and the Party began to unapologetically espouse the benefits of nationalising key services. In fact, public ownership became the central pillar of Labour’s response to climate change with Rebecca Long-Bailey – in her role as Shadow Secretary of State for Business, Energy and Industrial Strategy – pledging to nationalise the National Grid as part of her Green Industrial Revolution.

As Labour’s ‘Bringing Energy Home’ report explained in May 2019, bringing energy networks into public ownership was needed to ensure that decarbonisation occurred at the speed and scale necessary to seriously tackle climate change. The report pointed out the shortcomings of a reliance on the private-sector, which had typified Labour’s policies under Miliband, arguing that:

while government intervention and subsidies have led to private companies investing significantly in renewable generation like offshore wind, private network companies have failed to deliver decarbonisation at the speed and scale required despite heavy incentivisation. They have been repeatedly criticised […] for prioritising dividend extraction over investment into infrastructure upgrades […]
it is imperative that energy networks be run transparently, in the public interest with democratic control and oversight. This is inconsistent with current ownership structures, in which electricity and gas distribution companies are owned and controlled by largely international investors including private investment banks, private equity funds, international pension funds and sovereign wealth funds.

Or, as Rebecca-Long Bailey succinctly put it in November 2019, “Socialism or barbarism might be a cliché on the left, but when it comes to climate change, the choice looks inescapable. There is no third way in the climate crisis.”

During last year’s Labour leadership contest, Long-Bailey remained a committed proponent of public ownership, while Keir Starmer was careful to keep his statements on the topic vague and open to interpretation. This constructive ambiguity resulted in Labour for a Green New Deal awarding Starmer just 51 points out of 100 on their ‘climate commitment scorecard’ during the Labour leadership contest, while Long-Bailey scored 80 points.

Once elected leader, Starmer appointed Miliband to the position Long-Bailey had held under Corbyn and, given the two men’s track records, it was entirely predictable that Labour’s commitment to public ownership would fall by the wayside. And it has.

Labour’s Green Economic Recovery represents a retreat from Labour’s 2019 policies in terms of spending, public ownership and trade unionism. The report contains no mention of nationalisation and, instead, Miliband advocates for the funding of private enterprise through a Green Investment Bank, just as he did as Labour leader.

Labour’s Green Economic Recovery represents a retreat from Labour’s 2019 policies in terms of spending, public ownership and trade unionism.

Labour is now calling on the Government to bring forward £30 billion in capital investment, which “must be focused on supporting future-facing businesses” and could be used to provide “finance for small and medium sized enterprises and community-owned initiatives struggling to obtain this from the private banking sector.” This £30 billion figure is a fraction of the £250 billion that Labour allocated to a Green Transformation Fund under Corbyn, and is more in line with the £36 billion and £27 billion of green investment recently announced by the German and French governments respectively. We would hardly describe the Christian Democrats and En Marche as left-wing parties committed to the transformation of their countries’ economies.

The report’s fleeting references to supporting “community-owned initiatives” and “community-based groups” are a nod to the cooperative movement but no detail is given as to how such small organisations could hope to compete within a market system that is set up to favour big, centralised energy companies.

Furthermore, Labour’s Green Economic Recovery backtracks on the Party’s previous support for trade unionism. While the 2019 manifesto gave a central role to unions in regional development banks and emphasised that the jobs created through the Green Industrial Revolution would be unionised, both of these commitments have now been dropped.

Publication of the report followed a consultation that received “nearly 2,000 responses from a range of businesses, trade unions, think tanks, NGOs and Labour members” but it seems that the final document fails to reflect that consultation. Labour for a Green New Deal claims that 1,400 of those 2,000 responses endorsed its proposals, which included support for nationalisation of energy production on the basis that “only the state can ensure the rapid economic transformation we need.”

In response to the report, Labour for a Green New Deal has now criticised the Party leadership for backtracking on policies established under Corbyn. Angus Satow, co-founder the group, has described the document as “a big step back in ambition” and argues that “Labour is hoping against reason that the market, with a small nudge from the state, can solve this crisis.”

When it comes to climate change, the scale of Labour’s ambition needs to match the scale of the problem. But, ultimately, Labour’s Green Economic Recovery fails to provide a credible response to the existential threat we face.

It’s over five years since Ed Miliband was Labour leader and in the intervening period the need for radical action to decarbonise our economy has only intensified. And yet, somehow, Miliband has produced a document that simply rehashes the same basic policies he outlined in 2015. Those policies weren’t adequate five years ago, and they’re certainly not adequate now.


Terry Cox