Government slammed over paltry Green New Deal

The government was today accused of failing to deliver on its promise of a Green New Deal after new research suggested that just 0.6 per cent of the country's economic stimulus package will be focused on new green measures.

Speaking to the Commons liaison committee earlier this year, prime minister Gordon Brown said that the UK would match the US commitment to invest around 10 per cent of its stimulus package in green technologies. Ministers have subsequently talked repeatedly about a Green New Deal that will help cut emissions, while creating jobs and providing a boost to the economy.

But according to research published today by the New Economics Foundation think tank, new and additional spending on green businesses and technologies delivered as part of the UK's stimulus package amounts to just £120m, or 0.6 per cent of the total.

The report argues that bonuses paid to staff at the publicly owned RBS were seven times this amount, while the car industry is set to receive £2.3bn in government support.

Responding to the report, a spokesman for the Treasury told the BBC that it was unreasonable to look at the stimulus package in isolation, arguing that the government's over-arching low carbon policy framework will result in more than £50bn being invested in green technologies over the next three years.

However, Andrew Simms of NEF said that the government's green job creation plans remained poorly funded and were failing to lay the foundations for a low carbon economy.

"Investing in rapid transition away from the UK's fossil fuel dependence could provide a parachute for a troubled economy," he said. "But it feels like the government has cut the parachute strings and pushed green energy, efficiency and conservation from the plane."

The NEF report echoes the findings of a study earlier this year by HSBC, which found that despite talk globally of Green New Deals and low carbon job creation, relatively little was being invested in low carbon technologies as part of economic stimulus plans.

The report noted that Lord Nicholas Stern had recommended that countries dedicate at least 20 per cent of their stimulus spending to low carbon initiatives, but that only China and South Korea had exceeded this level, with the US and EU investing just 13 and 14 per cent respectively of their stimulus plans in green projects.

In related news, a separate report from Greenpeace, the Liberal Democrats, the TUC and the Federation of Master Builders predicts that a more ambitious energy efficiency programme backed by £5bn a year in funding could create 55,000 jobs directly while cutting emissions by around 1.6m tonnes a year.

The report shows that an annual £5bn investment in domestic energy efficiency would create around 55,000 jobs directly. Hundreds of thousands of jobs would be created indirectly. And every year it would reduce emissions of carbon dioxide by about 1.6 million tonnes while also addressing fuel poverty.

Greenpeace executive director John Sauven said that the money could be raised by scrapping the "unfocussed" cut in VAT, and diverting the money raised into " an efficiency programme which delivers real value – providing jobs, improving housing, boosting the economy and tackling climate change".

Lib Dem leader Nick Clegg added that if the UK is to run up a deficit during the recession, then the spending should be refocused on environmental projects that deliver long-term benefits to those who will have to pay back the debt.

"The extra money we borrow during the recession to stimulate the economy must be invested in projects that create jobs and build green infrastructure that will benefit us all in the future," he said.