The UK has a long term underinvestment problem. Annual UK total

The main part of the reason for this underinvestment is poorly designed fiscal rules, which have three main flaws: (a) The design of the rules means governments don’t use all the fiscal space they allow, causing underinvestment; (b) The rules only capture part of the balance sheet value of capital stock, ignoring the economic value of nature and its part in reducing economic volatility; (c) The Of. [...] The Climate Change Committee (CCC) estimates that £50 billion of investment in the green transition is needed each year by the end of this decade.1 While much of this money will come from private sources, the seismic nature of the green transition hands a pivotal role to the public sector to galvanise private finance by acting as a first mover. [...] Political commentators expect the Conservatives to target the impact of Labour’s GPP on borrowing in the coming election campaign, using the argument that it will either have to reverse the tax cuts the government announced in the 2023 Autumn Statement or breach its fiscal rules. [...] Perhaps the main argument for green investment in the context of the fiscal rules is that failure to decarbonise the economy and protect nature is a fundamental threat to fiscal stability because of the colossal economic damage that climate change and nature depletion will cause. [...] The Treasury has estimated the size of the ‘multiplier’ (how much private investment is attracted by a £1 of public investment) to be up to 2.5 times that of fossil fuels.25 Economic modelling by Cambridge Econometrics for the CCC’s sixth carbon budget (which has been accepted by the government and entails a reduction in UK greenhouse gas emissions of 78 per cent by 2035 relative to 1990, and a 63.