Think tank also backs case for taxing income from wealth at similar rates to income from work
IPPR has welcomed Labour’s ambition to boost investment in the UK’s transition to net zero by £28 billion a year. Such a figure would be good for the economy, providing some of the boost that the think tank says is needed to enable rapid recovery from the crisis caused by the pandemic.
It would be a significant move towards meeting the annual investment in reducing carbon emissions and the transition to net zero that IPPR calculates is needed at least until 2030, if the UK is to meet its existing net zero target.
Investment on this scale would also contribute to wider economic recovery, the think tank says, in line with its call for the UK to ‘boost it like Biden’ and target full employment so that employers bid for workers, rather than workers fighting for jobs. IPPR has called for extra public investment of £47 billion annually.
IPPR also welcomed indications in the conference speech by shadow chancellor Rachel Reeves that Labour is considering taxing income derived from wealth – such as dividends and capital gains – at similar rates to tax on income from work.
Luke Murphy, head of IPPR’s cross-party Environmental Justice Commission, said:
“The costs of inaction on the climate crisis are far greater than the investment needed to deliver net zero. We therefore welcome this significant investment commitment by Labour which IPPR has been calling for.
“If enacted, this investment would put the UK on the fast-track to deliver net zero and realise the many opportunities from jobs to levelling up that the climate transition can offer.
“The willingness to do whatever it takes is exactly the kind of commitment we need from government to tackle the climate crisis and restore nature.”
George Dibb, head of IPPR’s Centre for Economic Justice, said:
“We welcome Rachel Reeves' focus on reforming the UK tax system to make it fairer – this should be a focus of any government that’s looking to build back better. Right now the system is skewed to tax workers more than those who get their income from property or shares, and hasn’t kept up with the massive boom in property wealth over the past 20 years.
“IPPR analysis shows that equalising capital gains tax and income tax would raise £90bn over five years. We’ve also called for a windfall tax on excess pandemic profits, and a fair proportional tax on property to replace outdated council tax.”
On economic recovery:
“The UK economy has been held back by low investment and demand for too long. To recover from the Covid-19 crisis the UK needs to learn from the example of President Biden, who is investing in job creation with an ambitious stimulus plan. Rachel Reeves’ commitment today to £28bn of new investment is in line with IPPR’s proposals. Boosting investment in the UK economy on at least this scale isn’t just good for nature and the climate – it's also sound economics.”
Luke Murphy and George Dibb are available for interview
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NOTES TO EDITORS
- IPPR’s cross-party Environmental Justice Commission’s blueprint for a fair transition to net zero, Fairness and Opportunity: A people-powered plan for the green transition, was published last month and can be read here: https://www.ippr.org/research/publications/fairness-and-opportunity
- Among the commission’s recommendations, it called for £30 billion a year investment in a green economy. Analysis by IPPR shows that the transition could create 1.7 million jobs by 2035 in sectors from transport to home retrofit and low carbon electricity.
- Analysis by IPPR for the IPPR Environmental Justice Commission suggests that delivering net zero and restoring nature will require a step change in public investment
- IPPR has called for a major fiscal stimulus to secure a strong recovery, matching the ambition of the US President Joe Biden’s stimulus plans.
Prosperity and Justice after the Pandemic by George Dibb, Carsten Jung, Henry Parkes and Shreya Nanda, published last week, is available at: http://www.ippr.org/research/publications/prosperity-and-justice-post-pandemic
See also Boost it like Biden by Carsten Jung and Dr George Dibb at: https://www.ippr.org/research/publications/boost-it-like-biden
IPPR is the UK’s pre-eminent progressive think tank. With more than 40 staff in offices in London, Manchester, Newcastle and Edinburgh, IPPR is Britain’s only national think tank with a truly national presence. www.ippr.org