Frances O'Grady's Keynote speech: Green is Good for Growth

TUC Green is Good for Growth conference, 23 October 2012, London

Thanks Lesley. And thanks everyone for coming today. A special welcome to the green NGOs and businesses who are lobbying the government for change. A talented and forward looking group of people. Or according to George Osborne, the 'environmental Taliban'. If it's any comfort, the Chancellor also once described the trade union movement as the forces of stagnation. If only he'd know how ironic that would sound today. And I'd like to offer a special welcome to Judith Kirton-Darling from the ETUC and to Annabella Rosenberg from the ITUC.

And special thanks to all our speakers today: the Business Secretary Vince Cable, the Shadow Secretary of State for Energy and Climate Change Caroline Flint, the Green Party's first ever MP Caroline Lucas, and a whole host of experts from the business, union, academic and policy worlds.

Conference, we're here today to talk about how we can meet the twin challenges of economic and environmental renewal. Increasingly, some of those in power talk as if the former were real and the latter theoretical. But resource scarcity in one part of the world directly leads to rocketing food and energy prices in another - still further squeezing living standards in the here and now.

In fact, the two big challenges for our generation have a common cause - unregulated markets; a common victim - working people and the poor who are bearing the consequences of a twin crisis they did nothing to cause; and a common solution - a bold, imaginative and radical plan to green our economy and deliver the good green jobs that Britain is crying out for.

With austerity hitting hard, with growth and confidence in short supply, with years of stagnation staring us in the face, we urgently need to break this cycle of decline. Even the IMF is now urging change, accepting that for every £1 cut from public spending there is a £1.30 impact on GDP - more than double what they previously assumed. Investing in green industries, infrastructure and skills is a big part of the answer.

It's not just about equipping ourselves to meet the challenges posed by climate change, nor just about delivering economic regeneration to the regions that need it most. It's also about building a more equal and democratic economy that works for ordinary people: that offers hope to the 2.5 million unemployed that they can have good, high skill jobs that pay a decent wage.

I just want to make three key points this morning.

First: building a low-carbon future can create sustainable growth. The financial case for greening our economy is unanswerable. As research by the Department for Business has found, our low carbon environmental goods and services sector is already a huge part of our economy - but with the right policy framework, it could be even bigger. The facts speak for themselves. The green economy is now worth £122 billion - almost a tenth of total UK output. It sustains nearly a million jobs. And it is in trade surplus, with China our biggest export market. By 2015, the green economy will help us cut our trade deficit in half, rebalancing our economy away from domestic consumption and towards export-oriented investment. So when people say the green agenda is a luxury we can't afford, peripheral to the real task of economic recovery, secondary to jobs and growth, they're wrong - wrong on every count.

And with the global market for environmental goods and services currently worth a cool £3.3 trillion and rising, we've got to make sure we are well placed to thrive in the low-carbon growth sectors of the future. Whether it's wind turbines or CCS technology, Britain needs to be where the action is in the years ahead.

And this takes me onto my second main point: the government needs to do more to promote green growth. Much more. When it came to power in May 2010, the coalition said it would be the 'greenest government ever'. Well, I'll leave you to be the judge of that; bluest government ever might be more accurate. What is clear is that no issue better underlines the tensions with the coalition that this one.

Some people in government are genuinely committed to the goal of economic and environmental renewal, and they should be applauded for it. Others, however, are climate change deniers - latter-day flat earthers of the worst possible kind.

And this intellectual schism at the heart of power is playing itself out in a shambles of l-thought out, half-baked policy. Criticism of the government's approach is coming from all sides. The independent Climate Change Committee recently called for much greater certainty in energy policy. A number of energy technology companies - including Siemens, Alstom and Vestas - have warned about the current political risks for long-term investment. Some 50 businesses recently published a letter urging ministers to do more to promote green growth by introducing a new emissions target for 2030. And even the CBI says the government's current approach is 'is missing the mark, with policy uncertainty, complexity and the lack of a holistic strategy damaging investment prospects'.

For our part, we at the TUC want a fundamental change of direction from government. We want investment not cuts, so that we reverse the scandalous funding shortfalls that will see 16,000 jobs lost in the home insulation industry alone and 20,000 at risk in the solar industry following changes to the Feed In Tariff. We want a properly capitalised Green Investment Bank, not the pale imitation we have now, which is able to raise funds on the capital markets to invest in the green capacity Britain needs in the coming decades.

And above all we want a smart, active Green Industrial Strategy that provides us with a clear route map showing how we get from where we are now to where we want to be in 10 or 20 years time.

One thing's for sure. We won't build a cleaner, greener, more sustainable economy by relying on the market to deliver. Yes, there is a role for market incentives but the scale of the transition we need to make surely demands strong, intelligent leadership from government of the kind that is common in other countries. I agree that governments can't do it on their own. That's why the TUC is launching a new project looking at how industrial policy can help us reduce carbon emissions in transport, in the energy sector and in our homes and businesses.

That's why we're calling for an explicit policy focus on good green jobs that can't be offshored, that pay a decent wage, and that nurture the skills base Britain will need in the decades ahead.

And why we're also about to publish a new report looking at how we can help our energy intensive industries - what in the old days we used to call heavy industries - make the transition to the low carbon age. These industries employ 800,000 people, are worth £95 billion to the UK economy, and can help better balance our regional economies and reverse the growing north-south divide. The government recently launched a £250 million support package for the energy intensive sector, and that's to be welcomed - but we need a long term vision not a short term fix.

So to my third key point: the need to engage the trade union movement as equal partners in delivering green growth. The task we face is too important, too urgent and too big to simply be left to government and business alone.

We've got to move beyond the business-knows-best mindset. Or, perhaps more topically, the best know your place mindset. Trade unions have a critical role to play in ensuring that we deliver a just a fair transition to green growth. Helping deliver good green-collar jobs in the regions that need them most. Making sure we offer the retraining and reskilling opportunities that workers will need.

Ensuring that the industrial upheavals that inevitably lie ahead do not hurt those communities still battered and bruised by economic change in the 1980s. The transition we face won't be easy, but if we work together - government, business and unions - we can maximise the gain and minimise the pain. And we should be guided by a simple principle.

Working people must feel that the fight against climate change is something that is being done with them, not to them. Within our ranks, we have many experts and professionals in the field. But regardless of the jobs they do workers have a right to a voice and a big part to play, from promoting energy efficiency to green travel plans in individual workplaces and strategic decisions about the future of workplaces that nobody has a bigger stake in. There is no issue more important to ordinary working people.

We think the government needs to do more to promote it. And we want unions fully engaged in the process of change. We can't just muddle through, hoping that business will do the right thing and the market will deliver. Let's remember that the Stern Report famously described climate change as the biggest example of market failure in human history, so it follows that we need to break free from the stifling neoliberal mindset that got us into this mess in the first place.

I want a green growth to be at the heart of a new economy: fairer, stronger, more sustainable in every sense of the word. And I want green growth to power our recovery out of recession, showing that there is an alternative to the false economy of austerity. So let's make our case with conviction and clarity. Let's show we have nothing to lose by being bold. And together, let's make sure that when those elusive green shoots of recovery finally do appear, they really are green.

Thanks for listening.