Ed Miliband is facing mounting opposition from trade unions and City investors over his green agenda, as Western Europe endured one of its worst ever heatwaves — a stark reminder of the urgency of decarbonisation. The backlash comes as Andy Burnham, the presumed next prime minister after Keir Starmer’s resignation, prepares to form a cabinet. Despite the environmental imperative, Miliband’s stance on net zero has drawn fire from two powerful quarters: Unite and the GMB, who warn of major job losses in oil, gas and utilities; and financial figures who fear his appetite for public investment will send borrowing soaring and spook bond markets.
The opposition is not simply ideological. Within Burnham’s circle, there are concerns that appointing Miliband as chancellor could revive the bitter Blair-Brown power struggles of old, and that markets might recoil at his net-zero policies. Alternatives such as Wes Streeting and Shabana Mahmood are also being considered for the Treasury. Meanwhile, Miliband’s refusal to grant any new licences for North Sea oil extraction has become a flashpoint. He recently blocked a Treasury proposal to expand North Sea drilling to help fund defence spending — a move that angered unions representing workers in the sector.
Miliband’s green agenda
Ed Miliband currently serves as Secretary of State for Energy Security and Net Zero. His background includes a stint as a Treasury adviser under Gordon Brown, and he is a former Labour leader. As energy secretary, he has outlined a series of measures to boost the UK’s energy security: accelerating renewables auctions, promoting plug-in solar panels, and speeding up the “warm homes plan”. These initiatives are presented as a direct response to the volatility of global fossil fuel markets.
However, his most ambitious project — a £28bn per year green prosperity plan — was blocked by the Treasury. The plan would have created 650,000 jobs across the country by 2030, with a strong emphasis on industrial regions and commitments on skills, training and apprenticeships in green sectors. Miliband argues that as chancellor he would control the very levers — public investment, regional development funding, industrial strategy, tax incentives, retraining programmes and social protection — needed to ensure workers and communities are not left behind.
Significantly, not all unions are opposed. Unison, Britain’s largest trade union, has endorsed Miliband for chancellor, as has the National Education Union. This bolsters his credentials within the labour movement, even as Unite and the GMB remain hostile.
The economic case for green investment
Opponents of Miliband’s agenda argue that major increases in green investment will force the government to borrow more, pushing up bond yields and threatening fiscal stability. But this argument, say economists, misunderstands the root cause of inflation. Britain’s inflation shock of 2022-23 was fundamentally a supply-side energy shock driven by dependence on imported fossil fuels, mainly gas. In the postwar era, energy price spikes have coincided with eight of the ten episodes in which inflation was near or above 5%.
The only long-term solution, according to analysis cited by Josh Ryan-Collins, an associate professor at UCL’s Institute for Innovation and Public Purpose, is investment in cheap domestic renewable energy, electricity networks, home insulation and industrial decarbonisation. Such investment would reduce exposure to volatile global gas prices, making the economy more resilient and less prone to inflation. A more stable economy should ultimately strengthen, not weaken, confidence in UK government bonds.
The evidence for the economic benefits of green investment is substantial. A report from the Confederation of British Industry finds that the net zero economy generates output worth £105bn — about 3.5% of UK GDP — and supports more than a million jobs, many in the north-east of England. Average wages and productivity in the sector are significantly above the national average. The Climate Change Committee has calculated that for every £1 of public money spent on net zero, the benefits outweigh this by 2.2 to 4.1 times.
Beyond the green transition itself, critics argue that the Treasury’s relentless focus on fiscal sustainability has been counterproductive. Over decades, it has overseen falling public investment in infrastructure and services, and pushed private-finance initiatives that proved poor value for money compared to direct public funding. The paradoxical result has been lower growth and a higher debt-to-GDP ratio, alongside crumbling public services. Rachel Reeves, the current chancellor, has been unable to escape these orthodoxies, her approach described as adhering to “Treasury orthodoxy” and fiscal conservatism.
Miliband, by contrast, has both the intellectual and reputational heft to reform the Treasury. He has experience inside it from his time as an adviser to Gordon Brown, and he has proved himself as the most effective minister in Starmer’s cabinet, in his role as energy secretary. Andy Burnham, whose political model of “Manchesterism” emphasises regional devolution and civic pride, has argued for greater public control over domestic essentials such as energy, housing, food and water to tackle the cost-of-living crisis. With Miliband as chancellor, the argument can be made that major green investment is the only way to stabilise the UK economy in the long term and create the decent, well-paid jobs that the poorer regions of the country desperately need.
