Spend GBP 40bn on green investment

Policy baseline

The Green manifesto proposes around GBP 40bn more annual green investment. Returns depend on project selection, supply chains and planning.

• Targets decarbonisation infrastructure and industry.
• Large capital ramp-up raises delivery risk.
• Public debt and procurement capacity matter.

Core trade-offs

The direct beneficiaries are clean-energy sectors and future emissions reduction. The costs fall mainly on taxpayers and constrained capital markets. The main economic question is rapid scaling risks waste and crowd-out.

• Clean-energy sectors and future emissions reduction gain most directly.
• Costs fall mainly on taxpayers and constrained capital markets.
• Key risk: rapid scaling risks waste and crowd-out.

Fiscal impact by 2028-29

+GBP 30.0bn to +GBP 65.0bn. Central estimate: +GBP 40.0bn.

• Positive numbers mean net fiscal cost; negative numbers mean Exchequer savings.
• Main channel is the scored tax, spending or delivery change.
• Offsets depend on tax receipts, behaviour and pass-through.
• Range reflects uncertain implementation and economic response.
• This is not an official costing.

Economic impact by 2028-29

• Jobs: Green construction and supply-chain jobs rise; fossil-linked jobs face transition risk.
• Wages: Skilled retrofit and energy workers may gain; households gain only if bills fall.
• Prices: Upfront costs are high; long-run energy bills may fall if delivery succeeds.
• GDP / productivity: Potentially positive through lower energy imports and innovation; delivery bottlenecks can weaken returns.

Assessment

This is a real trade-off, not a free gain. Clean-energy sectors and future emissions reduction benefit, while taxpayers and constrained capital markets bear most costs. Overall output depends on behaviour, capacity and pass-through.

Confidence: Medium-low. Higher on the policy target and fiscal channel; lower on behaviour, pass-through and economy-wide effects.

Main risks

• Supply-chain limits: Skills, grid connections and materials can delay delivery.
• Cost overruns: Retrofit and energy projects often face uncertain unit costs.
• Weak additionality: Public money can replace private investment rather than add to it.

Safeguards

• Publish project pipelines and unit costs.
• Use competitive procurement where possible.
• Report additional private investment mobilised.

Academic evidence

UK government evidence

Sources

• PolicyLens illustrative scenario methodology for spend gbp 40bn on green investment Internal - PolicyLens, 2026
• The Environment and Directed Technical Change Academic article - Acemoglu, Aghion, Bursztyn and Hemous, American Economic Review, 2012
• Green Party manifesto: a reaction Think tank analysis - Institute for Fiscal Studies, 2024
• Green Party manifesto summary Manifesto summary - Local Government Association, 2024
• The Macroeconomic Impact of Europe’s Carbon Taxes Academic working paper - Metcalf and Stock, NBER, 2020
• Progress in reducing emissions Official advisory report - Climate Change Committee, 2025
• Spending Review 2025 UK government spending review - HM Treasury, 2025
• Manifesto for a Fairer, Greener Country Party policy source - Green Party of England and Wales, 2024

Other Green policies

• Raise the minimum wage to £15
• Index public-sector pay to inflation
• Add public-pay restoration premiums
• Raise low-paid public-sector wages
• Cap organisation pay ratios at 10:1
• Protect pay in transition schemes
• Create a single worker status
• Equal terms for outsourced workers