How net zero push is impacting Britain’s economy – including some nice salary bumps

Published

4 months ago

February 24, 2025

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The net zero sector has grown by 10% over the past year – adding £83bn to the UK economy, a new study suggests.

Employment in green businesses and industry has also climbed 10%, supporting the equivalent of 951,000 full-time jobs (2.9% of total UK employment).

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The study – commissioned by thinktank the Energy and Climate Intelligence Unit (ECIU) – found for every £1 of value generated by the net zero economy, an additional £1.89 was created in the wider economy.

It report was published as the government increases efforts to meet a legally binding goal to cut greenhouse gas emissions to zero overall (that’s net zero) by 2050.

Some Conservative and Reform MPs have criticised net zero, electric cars and renewables, suggesting efforts to curb climate change are to blame for higher energy bills and the deindustrialisation of Britain.

But the report, with analysis from CBI Economics and the Data City, suggests the UK’s net zero economy is a significant driver of growth, innovation, and productivity.

Where is the growth happening?

Renewables, electric vehicles, low carbon heating, recycling and green finance are all part of the net zero sector.

Small and medium businesses with fewer than 250 employees are the main drivers of growth, and salaries are 15% higher than the UK average (£43,100, compared with £37,430).

Regions beyond London and the South East are where the net zero economy is growing significantly, the report found, boosting some of the country’s most deprived areas.

The West Midlands, Yorkshire and the Humber, and southwest England were the largest contributors, each more than 5% of the national total, while Scotland’s net zero economy has grown by 21.3% since 2022 – now worth £9.1bn.

Tyne and Teesside was also highlighted as a hotspot thanks to a £1bn Nissan electric vehicle project, which includes a gigafactory for next-gen batteries. It is creating 6,200 jobs.

London and the South East are still leading the way, with £16.2bn and £13.1bn of green investment respectively.

Overall, the sector attracted £23bn of public, private and foreign direct investment – and each full-time job generated £105,000 in economic value, well above the UK average, the report found.

What are the Conservatives and Reform’s views on net zero?

Tory leader Kemi Badenoch has described herself as a “net zero sceptic” and her voting record shows she has largely opposed efforts to reduce greenhouse gas emissions.

She has also voted against banning fracking and called net zero targets “arbitrary”, saying they would “bankrupt” the UK.

The Conservatives’ manifesto from the 2024 election, when Rishi Sunak was leader, said the party was committed to a “pragmatic and proportionate” approach to net zero by 2050.

It said the party would invest £6bn in energy efficiency over three years to make one million homes warmer.

Reform has said it would impose taxes on the renewable energy sector and wants to scrap “net stupid zero” targets.

The party blames net zero policies for higher energy bills and deindustrialisation in the UK and believe green initiatives will make “zero difference to climate change”.

Deputy leader Richard Tice called renewable energy a “massive con” and promised Reform would recover subsidies paid to wind and solar companies.

‘You can’t have growth without green’

Energy Secretary Ed Miliband said the findings showed “net zero is essential to growth, a strong economy, and money in working people’s pockets”.

Making Britain “a clean energy superpower” will provide “energy security, good jobs, and investment in our communities”, he added.

Louise Hellem, chief economist at the CBI, said “there are huge emerging markets for green technologies that the UK must capitalise on”.

“It is clear, you can’t have growth without green,” she said.

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Rachel Reeves hints at tax rises in autumn budget after welfare bill U-turn

Published

7 hours ago

July 5, 2025

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Rachel Reeves hints at tax rises in autumn budget after welfare bill U-turn

Rachel Reeves has hinted that taxes are likely to be raised this autumn after a major U-turn on the government’s controversial welfare bill.

Sir Keir Starmer’s Universal Credit and Personal Independent Payment Bill passed through the House of Commons on Tuesday after multiple concessions and threats of a major rebellion.

MPs ended up voting for only one part of the plan: a cut to universal credit (UC) sickness benefits for new claimants from £97 a week to £50 from 2026/7.

Initially aimed at saving £5.5bn, it now leaves the government with an estimated £5.5bn black hole – close to breaching Ms Reeves’s fiscal rules set out last year.

In an interview with The Guardian, the chancellor did not rule out tax rises later in the year, saying there were “costs” to watering down the welfare bill.

“I’m not going to [rule out tax rises], because it would be irresponsible for a chancellor to do that,” Ms Reeves told the outlet.

“We took the decisions last year to draw a line under unfunded commitments and economic mismanagement.

“So we’ll never have to do something like that again. But there are costs to what happened.”

Meanwhile, The Times reported that, ahead of the Commons vote on the welfare bill, Ms Reeves told cabinet ministers the decision to offer concessions would mean taxes would have to be raised.

The outlet reported that the chancellor said the tax rises would be smaller than those announced in the 2024 budget, but that she is expected to have to raise tens of billions more.

It comes after Ms Reeves said she was “totally” up to continuing as chancellor after appearing tearful at Prime Minister’s Questions.

Criticising Sir Keir for the U-turns on benefit reform during PMQs, Conservative leader Kemi Badenoch said the chancellor looked “absolutely miserable”, and questioned whether she would remain in post until the next election.

Sir Keir did not explicitly say that she would, and Ms Badenoch interjected to say: “How awful for the chancellor that he couldn’t confirm that she would stay in place.”

In her first comments after the incident, Ms Reeves said she was having a “tough day” before adding: “People saw I was upset, but that was yesterday.

“Today’s a new day and I’m just cracking on with the job.”

Sir Keir also told Sky News’ political editor Beth Rigby on Thursday that he “didn’t appreciate” that Ms Reeves was crying in the Commons.

“In PMQs, it is bang, bang, bang,” he said. “That’s what it was yesterday.

“And therefore, I was probably the last to appreciate anything else going on in the chamber, and that’s just a straightforward human explanation, common sense explanation.”