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Irish Times
08-07-2025
- Business
- Irish Times
Is this Government serious about climate action? We'll soon know
Later this month the Government will publish its review of the National Development Plan, setting out how much capital funding will be spent over the next 10 years. It is the area of spending we have to prioritise. If we don't ramp up investment in housing, transport, energy and water services, then our country will grind to a halt. To make it work, we also need to keep current spending under control. That combination can stop our economy from overheating and ensure we can continue to build, even if there is a sudden drop in corporate tax revenues. A key question will be where such capital funding is directed and not just what the overall amount is. For example, will new spending on housing continue to support the National Planning Framework goals for compact, low-carbon and better-balanced regional development, or will we instead revert to low-density sprawl? The latter option will cost us all a lot more in the end, as we pay for new supporting infrastructure, at the same time that our city and town centres fall into dereliction and decay. The last government had agreed that €3.15bn from the fund would be spent over the next five years It will be especially interesting to see the Government's plans for the new Infrastructure, Climate and Nature Fund within this review. The last government had agreed that €3.15 billion from the fund would be spent over the next five years. That total was specific because we knew exactly where the funding shortfalls were in the delivery of our national climate action plan. READ MORE The analysis supporting that figure was done in taskforces involving all relevant government departments and it was clearly understood that the resulting investments had to improve the competitiveness and security of our country, as well as reduce our emissions. As a result of this process, 40 per cent of the fund was earmarked for energy efficiency improvements to our public building stock. It is something we are compelled to do under European law but which no department wants to prioritise in advance of other spending commitments. A second priority was using 25 per cent of the allocation for investment in district heating, anaerobic digestion, clean industrial heating and modern methods of construction. This would address the areas where we are furthest from meeting our climate targets and would bring in significant matching private finance to help deliver what we want. Last but not least, €480m or 15% of the fund was to be spent on supporting innovation in new technologies such as long-term battery storage The third target was to provide 20 per cent of the funding to the farming and conservation sectors, so they can deliver the Nature Restoration Plan, which is already committed to under European law. Last but not least, €480 million or 15 per cent of the fund was to be spent on supporting innovation in new technologies such as long-term battery storage, offshore energy and low-carbon data centres. It would bring down prices for people and allow us to continue to attract more foreign direct investment, which is the source of this funding in the first place. If the review fails to commit to these sorts of investment priorities, then we will know the Government is not intent on delivering the climate action plan. The consequences for our economy as well as our environment would be immense. We are never going to be competitive burning other people's fossil fuels and we will never be able to trade under a green brand if we are not willing to clean up our act here at home. Minister for Public Expenditure Jack Chambers has said the Republic's infrastructure delivery is in a 'state of paralysis' and the State system is too 'risk-averse'. It is true we have to do everything faster, but that need for speed should not mean we abandon strategic thinking when it comes to deciding what we build next. Delay is going to cost us more, not just because of potential fines, but because it makes more sense to move now to the fast-evolving and cleaner new industrial model It would be a mistake to give up on the climate commitments we have already made, just days after the European Commission proposed a higher target of a 90 per cent cut in emissions by 2040. Delay is going to cost us more, not just because of potential fines, but because it makes more sense to move now to the fast-evolving and cleaner new industrial model. It will give us greater economic security in a world of volatile fossil fuel price shocks. Are we just going to say to our European Union colleagues, 'sorry, but there is just not sufficient political will for us to make the change?' We cannot use the excuse that we don't have the money, because our tax revenues are the envy of every other country. We cannot fudge things by saying we need more time, because these proposals have been worked on by teams of civil servants for years. If the revised National Development Plan and Infrastructure, Climate and Nature Fund do not match our climate ambitions, then I can see a future court asking a simple question. They will wonder why, when we knew what had to be done, and when we had the finances and the backup analysis in place, we still decided to shirk our responsibility. In such circumstances, I don't believe we would have a credible defence.
The Guardian
08-06-2025
- Business
- The Guardian
The winners and losers in Labour's first spending review
When Rachel Reeves publishes the government's spending review on Wednesday, the stories the Treasury will want to tell are the energy, transport and other infrastructure projects that will get a share of the big boost in capital funding – £113bn. They will argue that cash, freed up by the change to the fiscal rules in the budget, could only have happened under Labour and was opposed by the Tories and Reform. But the capital spending cannot stop expected cuts in day-to-day spending, meaning extremely tight settlements for departments, with savings expected from policing budgets, local government, civil service cuts, foreign aid, education and culture. Treasury sources said they would still spend £190bn more over the five-year parliament than the Conservatives' spending plans – meaning more than £300bn will be distributed among departments. Real-terms spending will grow at an average of 1.2% a year over the three years that the spending review period covers, a significant drop from the first two years when it will be 2.5%. Even that figure does not tell the full story because of the disproportionate boost being given to defence and the NHS – and has led the Institute for Fiscal Studies to warn that the spending commitments will require 'chunky tax rises' in the autumn, when coupled with other expected priorities such as restoring the winter fuel allowance to more pensioners and action on child poverty such as ending the two-child benefit limit. Here are some of the key offers from the spending review – and the rows over cuts. The biggest row of the spending review has been between Reeves and the home secretary, Yvette Cooper, over policing, which one source describes as being a 'huge headache'. Cooper has brought out the big guns to make her case, first with a letter from six police chiefs who warned that without more funding the government would not meet its manifesto promises on crime. Sir Mark Rowley, the head of the Metropolitan police, and other senior police officers have also written to the prime minister to warn him that investment was need to prevent some crimes being routinely ignored. It is understand the policing budget will not face real terms cuts but the level of spending is still under discussion. The Home Office is under strain as a major spending department that is key to some of the most ambitious manifesto pledges – including halving knife crime, police recruitment, reducing violence against women and girls as well as dealing with monitoring offenders who will be released earlier due to sentencing changes. The other major spending review row is over deep dissatisfaction from Angela Rayner – the deputy prime minister and housing secretary – with the level of funding for social homes in the spending review, making her one of the last remaining holdouts in negotiations with the Treasury over departmental spending settlements. The Ministry of Housing, Communities and Local Government has been battling for more funding for the affordable homes programme as well as trying to preserve cash for local councils, homelessness and regional growth initiatives. The Treasury had previously put £2bn into affordable housing, described as a 'down payment' on further funding to be announced at the spending review, which Reeves said would mark a generational shift in the building of council homes. However, the next phase of funding has caused a major rift with Rayner – and more so because capital spending on infrastructure such as housing is meant to be a priority. The environment secretary, Steve Reed, is said to have been holding out for a big capital injection to fund flood defences. The autumn budget said the government was facing significant funding pressures on flood defences and farm schemes of almost £600m in 2024-25, and that those schemes would have to be reviewed for their affordability. Sources at the Department for Environment, Food and Rural Affairs (Defra) confirmed a post-Brexit farming fund would be cut in the review. Labour promised a fund of £5bn over two years – from 2024 to 2026 – at the budget, which is being honoured, but in the years after that it will be slashed for all but a few farms. The energy secretary, Ed Miliband, had a long fight to keep cash for a major programme of insulation, which was a key part of the government's net zero strategy. However, there are reports suggesting other schemes could be scaled back to protect the insulation programme. At the October budget, Reeves announced £3.4bn over three years for household energy efficiency schemes, heat decarbonisation and fuel poverty schemes. The government responded to concerns expressed at the time calling the sum the 'bare minimum' and promising a spending uplift at the review. Miliband's department is expected to get significant capital investment in energy infrastructure including nuclear – with the government poised to give the go ahead to the Sizewell C nuclear plant. The chancellor has already announced £15bn in transport spending across the north of England, funds which she said fulfil promises made by the Conservatives to the country but which the party had no way to pay for them in its own plan. Wes Streeting's department is set to be one of the big winners of the spending review and it will lay the groundwork for the NHS 10-year plan, which will be published imminently after the spending review. The department will get one of the biggest boosts to funding as others face real-terms cuts. The funding for the plan prioritises three key areas, moving care from hospitals to communities, increasing the use of technology, and prioritising prevention. No 10 and Streeting hope that the 10-year plan will contain major commitments and a positive story that the government will finally be able to tell properly on improvements to the health service – though any good news could be scuppered by the ballot for strike action by resident doctors. Still, Streeting's department was one of the last to settle formally with the Treasury due to negotiations over drug prices, though departmental sources downplayed any specific row. Any child in England whose parents receive universal credit will be able to claim free school meals from September 2026, the government has said. Parents on the credit will be eligible regardless of their income. The government says the change will make 500,000 more pupils eligible. A Department for Education (DfE) source said it was the best measure outside welfare changes to address child poverty and that the education secretary, Bridget Phillipson, had consistently fought to protect school food programmes through each round of spending negotiations. But schools budgets will be squeezed. Teachers will get a 4% pay rise next year, with additional funding of £615m. But schools will still have to fund about a quarter of the rise themselves – a total of £400m from their current budgets. Phillipson has tasked the DfE with finding savings in schools budgets, such as energy bills. Savings will also come as the government is removing public funding for level 7 apprenticeships, which has drawn criticism from skills experts. The justice secretary, Shabana Mahmood, was one of the first to reach her settlement to allow her to announce a £4.7bn plan to build three new prisons starting this year, part of a 'record expansion' as the government attempts to get to grips with the prison crisis. The early announcement was essential because it came alongside an announcement that the government would put a limit on how long hundreds of repeat offenders can be recalled to prison amid Whitehall predictions that jails will be full again in November.
