Britain’s status as a low-investment nation is as damaging as it is incontrovertible. Fraying infrastructure, weak growth, slowing climate progress; the sense nothing works anymore is inseparable from the failure of repeated Conservative governments to adequately invest in the nation’s productive capacity and collective resilience. Life is harder and more insecure for many as a result. Contrary to recent headlines, then, Labour’s Green Prosperity Plan makes urgent economic sense. Breaking from the trap of a stagnant and unequal economy requires increasing public investment, ‘green’ or otherwise. The more appropriate criticism of Labour’s investment agenda is not that it is too ambitious, but that it remains inadequate for the age of overlapping emergencies.
Labour is provisionally committed to publicly investing an additional £20bn a year in green infrastructure and industry by the end of the next Parliament. New investment would be funded through borrowing. Given there is widespread evidence that higher public investment boosts inclusive growth and accelerates decarbonisation, outcomes that are central to fulfilling Keir Starmer’s five governing missions, this is welcome. Yet even if the headline figure was delivered in full – itself uncertain, amid recent reports that high level discussions are scheduled in Labour to decide on its fate – Labour’s plans mean overall public investment would still be lower as a percentage of national income at the end of a first term of a Starmer government than at the start. It would remain significantly – and damagingly – below the average in other advanced economies, and less than today as a share of the economy.
That is the Plan’s paradox: at once a vital step forward but insufficient, central to Labour’s governing agenda and growth ambitions but not yet decisive enough to drive national renewal, a welcome break from Britain’s pattern of self-harming underinvestment but still inadequate.
This paradox is central to current political debate. Both the headline green investment figure and Labour’s commitment to borrow to invest are the focus of intensifying Conservative attack. That intensity flies in the face of public opinion: polling shows strong support for public investment in greening the economy. The focus on debt ignores the Conservative’s own record – public debt has continued to climb during their term in office – and the fact that by increasing growth the Plan will likely improve Britain’s debt-to-GDP ratio. And it fails to recognise the nascent turn toward state-led green industrial strategy. In short, the criticism is strangely out of step with the public’s priorities and doesn’t reflect the new consensus on how best to accelerate decarbonisation as the route to shared economic prosperity.
Given this disconnect, what is driving the renewed attack on the Green Prosperity Plan? On the surface, it is obvious: the Conservatives are punching a bruise. Labour is wary of getting snared in a long-running debate on what, to most voters, seems a large and abstract number, particularly as the Party fears that discussions of public borrowing will only reinforce perceived weaknesses about their brand. But counteracting that by translating a still-broadly undefined agenda into detailed spending plans and benefits risks exposing Labour to political traps that the government would undoubtedly try to set.
The party could attempt to sidestep this in three ways: a robust defence of borrowing as an investment in the country’s future; by pivoting to the approach of Joe Biden’s Inflation Reduction Act, which funded increased green public investment through higher taxes; or diluting the Plan by stripping it of investment commitments. No approach is without risk. The first centres debate on Labour’s perceived weaknesses around “fiscal irresponsibility”; the second runs up against the party’s commitment to no major new taxes; and the third undermines their central engine of growth while reinforcing public perceptions that Starmer doesn’t stand for anything . With Labour caught in a bind to some degree of their own making, a divided Conservative Party that cannot convincingly run on its governing record has reached for a tried-and-trusted vocabulary: attacking Labour for public debt, reckless borrowing, and wasteful industrial strategy. That this line of attack gets the economics wrong is incidental.
There is, however, something more at work than a reflexive hitting of the bruise. A recent book – Clara Mattei’s The Capital Order, a genealogy of austerity’s origins – though far removed from Westminster briefing wars, nonetheless tells us something about the deeper political logics from which the Tory attack emerges. The book allows us to locate criticisms focused on public debt and state investment in the right’s wider project: the decades-long effort to subordinate the political to the economic, to shrink the scope for democratic control of the economy, and in doing so, insulate entrenched privilege and leave undisturbed the pillars of capitalism. How so? And what relation does that bear to contemporary debates on the political economy of decarbonisation?
Austerity emerged in the turbulence of the interwar period as a political project to protect capitalist hierarchies – and the constitutive relations they emerge from – against the threat of thoroughgoing transformation from below. As Mattei shows, the pursuit of austerity in 1920s Britain and Italy was not primarily a strategy to revive economic dynamism. Instead, it was and remains a concerted effort to protect capital in a time of upheaval through the forceful reimposition of social order. To that end, radical ideas about how to organise the economy that emerged in the turbulent aftermath of the First World War – production based on need not profit, an end to an exploitative wage-labour relation, the socialisation of ownership and investment – and the popular forces that drove these ideas forward were subjected to punitive fiscal, monetary, and industrial austerity. The inevitable effect was to disempower workers by reinforcing market dependency and increasing their precarity. This disempowerment was in the service of a more systemic goal: to stabilise the existing social order by politically foreclosing possible economic alternatives to capitalism.
The parallel with today is compelling. Accelerating environmental breakdown is a profound challenge to the stability of societies everywhere. What’s more, the response this threat compels us to undertake – the decarbonisation of human civilization within a half-century – is itself an unprecedented system-wide disruption. In other words, though the pitch of class struggle today might not yet match the intensity of conflict in the 1920s, analogous disruption to the social order via economic transformation and geopolitical disruption is inevitable. In this context, instability is inescapable. Just as in the interwar period, the climate interregnum we are entering – with societies still deeply reliant on fossil fuels yet tentatively moving toward a post-carbon future – will be marked by profound turbulence. A more turbulent world in turn creates new vulnerabilities and sites of contestation, politicising questions of production and consumption long cast as natural and immutable. Who should control the pace and direction of the transition – and bear its costs? Is market coordination capable of guiding systemic transformation? Can the profit imperative adequately meet fundamental needs? Such questions go to the heart of power in our society: who controls the economic surplus, who decides on the allocation of investment, and therefore who decides the terms of the future.
It is exactly these questions that the right seeks to foreclose politically. The necessity of decarbonisation cannot be allowed to act as a lever for economic democratisation. Instead, the economy must be re-cast as a natural object beyond public control. This is what connects the contemporary austere rejection of green public investment and a rhetorical commitment to private coordination of the transition to the right’s longer history, one that has sought to depoliticise economic conflict and make social life amenable to market rule. They are part of a consistent strategy for stabilising hierarchy in our age of instability. In this case: the attempt to organise decarbonisation without disturbing private control of investment, for-profit imperatives, and a stark labour-capital wage relation divide.
Even in its most ambitious iteration, the Green Prosperity Plan will not disturb these relations. This is not just due to the modest quantity of investment relative to the scale decarbonisation requires, but also its quality: as political economists such as Brett Christophers and Daniela Gabor have warned, public money mobilised to de-risk asset-manager-led energy infrastructure investment is both more expensive and less effective than direct public investment. The alternative remains to be won: public coordination of the transition based on democratic ownership, transformative investment, and purposeful planning.
However short Labour’s Plan may fall, even the steps it proposes – an expanded role for state investment to guide decarbonisation, the limited revival of public ownership and industrial strategy, an emphasis on shared prosperity as the goal – tentatively re-open questions of investment and coordination, of who controls the transition and for what purpose. It is this – rather than the efficacy or otherwise of the Plan – that is at stake in debates over how we decarbonise as a society. In these echoes of the past, we can trace the fault lines of our future.
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