The leader of one of the UK’s largest business groups said companies were “confused and disappointed” as the government “backtracked” on encouraging green growth in the UK.
Tony Danker, director-general of the Confederation of British Industry, said neither Rishi Sunak nor Liz Truss were as interested in what he called “Britain’s biggest economic growth prize” as their predecessor Boris Johnson.
This comes as his organization predicts that the UK is already in recession and will remain in the downturn until the end of next year.
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While protracted, this recession may not be as severe as 2008, or even the recession of the early 1990s.
Economists at the CBI forecast a 0.7 per cent drop in gross domestic product (GDP) from the recession’s peak to its nadir.
They see GDP falling 0.4% in 2023 before returning to growth the following year when it grows 1.6%.
This is much more optimistic than the Bank of England forecast a month ago. The bank had forecast a 1.5% decline in 2023 and a further 1% decline in 2024.
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The CBI said the bank is assuming the base rate will be higher than its economists forecast.
But the CBI forecast remains gloomy as it shows the UK lagging behind many of its international peers.
Mr Danker said the CBI would do more next year to ensure the government pushed for green growth.
“I think the main policy lever that is missing is around green growth,” Mr Danke told reporters.
“I think it’s been a step backwards since Boris Johnson left because I think he was a personal champion in the cabinet.
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“When we talk to members – we’ve just asked them for advice on green growth – I think there’s a real widespread concern that this government is going backwards on green growth.
“Given that it is undoubtedly the UK’s biggest economic growth prize competitively with the rest of the world, for a variety of reasons – the government has been eerily quiet and reticent on all levers of green growth.
“In terms of clean energy opportunities, decarbonisation of other sectors and the role of the City of London in truly being the world capital of sustainable finance.
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“Roughly speaking, most businesses think the UK government has gone backwards in terms of going green. They are confused and disappointed that they have made significant progress in going green in the past five years, and this will be the culmination of the CBI’s work in the first quarter of next year. main focus.”
The CBI said the government should lift its de facto ban on onshore wind energy in England and make other regulatory changes that would help businesses invest.
The alternative is that productivity remains subdued, while structural weaknesses evident pre-Covid remain evident in the CBI’s forecasts for the coming years.
Productivity will remain 2% below the already weak pre-pandemic trend by the end of 2024, while business investment will be 9% (or £5bn) below pre-pandemic levels.
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August Graham is a PA business reporter.
