Making GDP the focus of a post-coronavirus economy would be a mistake | Carys Roberts

Growth often doesn’t benefit the people who need it – a green economy could create 1 million jobs

The UK lockdown might be easing, but the path ahead for the economy will be long and difficult. Unemployment this quarter is likely to rise twice as fast as it did following the global financial crisis. Almost half of businesses that have taken up one of the government’s bounce-back loans do not expect to be able to pay it back.

It’s tempting in a crisis to want to do whatever it takes to get economic activity – measured by GDP – back to where it was before. But an overwhelming and singular focus on increasing GDP would be a mistake. GDP figures do not tell us who is benefitting from growth. GDP does not tell us whether environmental resources – and nature – are being dangerously depleted, and does not reflect the value of caring, much of which is performed by women.

Boris Johnson has called for the UK to “build back better”, but to use government resources and capacity most effectively and – more fundamentally – to take the opportunity to build a better kind of economy and society, we need to know what it is we want to rebuild. This is precisely the moment to think beyond a blind pursuit of GDP, about what kind of economic activity to bring back and prioritise, and what we could do without. Any stimulus package must be tailored to create not just any economic activity, but that which will serve society best. As a result, any recovery or spending plan should be scrutinised not just on its size, but what it is spent on.

This must be a green recovery. That does not mean adding on a few green job programmes to a larger, fossil-fuelled stimulus: the whole recovery package must accelerate the UK’s path to net-zero carbon and restore our natural environment, which is in crisis. Anything else risks emerging from one disaster only to accelerate headlong into another. As the government turns on the taps to boost the economy, there is a huge opportunity to fill the £30bn per year funding gap for green investment.

The recovery must target well-paid, high-quality jobs, spread around the country. These must provide good work for those who have lost it as a result of Covid-19, as well as people previously locked out of the jobs market or at risk of being left behind on the journey to net zero. This is a more profound shift than it appears. Currently, stimulus packages aim to boost GDP, and jobs are a way to get there. But what matters is that ordinary people have access to secure incomes – both for themselves, and because this will ensure spending in the economy (people who need money are more likely to spend it) and a sustainable tax base. An alternative approach, for example, of loosening lending restrictions for mortgages, might boost GDP but would do so by increasing debt and raising house prices, benefitting the already wealthy while hurting people without wealth. 

The recovery must involve a reconsideration of what is valuable in society. The pandemic has put into stark relief the extraordinary contribution of health and care workers, many of whom are women and migrants, and the essential support of key workers across the economy. The recovery must recognise that contribution in higher pay and better working conditions. So, too, the pandemic has caused conversations up and down the country about unpaid care work and who performs it. But the easing of lockdown has prioritised marketised activity over human relationships, which don’t require cash. You can visit your parents at home, but only if you want to purchase their house or clean it. The recovery should recognise and reflect what is important to people and valuable – not just economic activity.

These goals are not in conflict but instead are inextricably linked. Achieving them requires and provides an opportunity to rethink an economy that doesn’t work for so many across the country or for future generations. We estimate that close to a million good jobs could be created in this new, green economy, with many more if we choose to invest in our social care system.

Talking about and targeting the “economy” as an abstraction masks the underlying shape and nature of the activity taking place underneath. It means we miss people: who loses out, and who benefits from the status quo being restored. Lockdown has found us in a collective moment of reimagining, but this will not last for ever: we should use it to ask what economic activity we want to rebuild, and what we could do without.

• Carys Roberts is executive director of the Institute for Public Policy Research. The full IPPR Environmental Justice Commission report can be found here


Carys Roberts

The GuardianTramp

Related Content

Article image
More long-term thinking is needed to protect the UK economy
Stop-start policies are harming UK plc and the fight against Covid-19. Rishi Sunak needs to plan ahead now

Richard Partington

20, Sep, 2020 @12:58 PM

Article image
The British government is about to sleepwalk into an unemployment crisis | Larry Elliott
Rishi Sunak’s furlough scheme was a start. But unless more action is taken to protect jobs, a grim winter awaits, says Guardian economics editor Larry Elliott

Larry Elliott

25, Jun, 2020 @1:52 PM

Article image
Governments put 'green recovery' on the backburner
G20 countries aim their pandemic bailout spending at fossil fuel industries, leaving Paris climate change targets in doubt

Fiona Harvey Environment correspondent

15, Jul, 2020 @6:00 AM

Article image
We now have the proof: greening the economy doesn't come at the price of prosperity | Fiona Harvey
After the financial crisis, green investment paid dividends. Coronavirus presents an even greater opportunity, says environment correspondent Fiona Harvey

Fiona Harvey

22, May, 2020 @6:00 AM

Article image
UK must prioritise levelling up if economy is to get back on its feet
Boris Johnson’s tenure will be coloured by the Covid-19 economic recovery but urgent fixes are needed now

Richard Partington

26, Jul, 2020 @1:19 PM

Article image
UK economy to shrink by 8% in 2020, forecasters say
EY Item Club further downgrades UK economic prospects with full recovery unlikely until 2023

Zoe Wood

14, Jun, 2020 @11:01 PM

Article image
UK's green plan offers mixed hopes for post-Covid-19 jobs boom
Only five green jobs on average are created per £1m spent, while most equipment is made abroad

Phillip Inman

05, Feb, 2021 @10:19 AM

Article image
UK's coronavirus recovery should have green focus, Johnson urged
Climate advisers call for work and training in low-carbon heating, water efficiency and flood-protection

Fiona Harvey Environment correspondent

06, May, 2020 @6:00 AM

Article image
Reworking our economy for a post-coronavirus society | Letters
Letters: Caroline Lucas MP and Prof Richard Murphy on the need for all political parties to support green initiatives, Christopher Tanner on reimagining the idea of economic growth and Dave Young on the importance of building social infrastructure


15, Jun, 2020 @4:57 PM

Article image
The answer to climate breakdown and austerity? A green new deal | Caroline Lucas
Business as usual is causing environmental destruction and spiralling inequality. We have a radical plan to address both, says Caroline Lucas, the MP for Brighton Pavilion

Caroline Lucas

27, Mar, 2019 @10:00 AM