Climate change is the most pressing existential threat facing the planet. In an attempt to meet this threat, the 2015 Conference of the Parties (COP) 21 summit in Paris agreed to try to limit global warming to 1.5 per cent above pre-industrial levels. This is a stretching target; success requires cuts of carbon dioxide emissions by 45 per cent by 2030. We do not have long, yet a failure to meet this threat is unthinkable.
The UK government is committed to a ‘net zero carbon’ economy by 2050. The TUC strongly supports this target, but we believe that meeting it requires a reset of the way we live and work. Get it right and we can develop new, innovative industrial sectors providing great new jobs. Get it wrong and those working in fossil fuel sectors of the economy will lose their jobs and livelihoods, with only low skill, low value jobs to replace them. It is for this reason that trade unions call for a ‘just transition’ to a net zero economy.
The economy of the UK varies greatly by region and nation. For this reason, a just transition may look very different in different parts of the country. This report heard from trade unionists in four UK regions – the North, the North West, the Midlands and Yorkshire and the Humber – as well as Wales, to understand the history and culture of those places, as well as to identify the opportunities and threats of the move to net zero, in terms of jobs and skills. We demonstrate the expert knowledge of trade union full time and lay officials, using that knowledge to provide practical and achievable policy recommendations whilst also highlighting, yet again, why trade union voice should become an established feature of UK industrial policy, as it is in the industrial policies of so many of our continental neighbours.
A just transition will require different policy levers at different levels. Industrial policy is crucial to achieving both a just transition and net zero. Industrial policy works at the national, regional and local level.
At the national level, the government needs a co-ordinated industrial strategy which includes the following elements:
The Committee on Climate Change has reviewed the scientific evidence on how best to deliver the change we need and now needs to build a consensus on how this change should be delivered so that it works for workers and consumers alike. The Just Transition Commission we set out below should advise the government on long-term energy strategy, involving affected workers, unions, industries and consumers, to plan a path that will deliver a just transition to a clean, affordable and reliable energy supply for the future alongside reductions in emissions.
The TUC supports a balanced energy policy which enables us to meet out net zero commitments. Key technologies focused on by unions in this report include Carbon Capture Storage and Use (CCSU), which was highlighted by trade unions in the Northern and the Yorkshire and Humber regions as being key to a just transition in their areas. Nuclear energy was highlighted in the North West and is an integral part of a net zero carbon energy policy. Trade unions call for a net zero roadmap that embeds a fully integrated, whole systems approach, including nuclear energy at scale, with direct government investment in order to create high quality employment.
The UK is a world leader in offshore wind, but whilst it is great news that turbine blades are built on Humberside, the turbines themselves are built overseas. This is a missed opportunity for the UK economy and a more mature industrial strategy is necessary to change this. Hydrogen technology has the potential to play a key role in achieving our net zero targets, as well as to create and sustain hundreds of thousands of high-quality jobs across the country. A cross-departmental hydrogen strategy must be developed between government, industry and unions.
Battery technology will be vital to the Midlands, the North East and Wales, given their historic motor industries. The UK’s decision to phase out petrol and diesel engines by 2035 means that companies such as Toyota, Vauxhall, Ford and Nissan face a massive threat – but also a massive opportunity if we can develop the battery technology here in the UK. Meanwhile, buying steel from China can produce up to fifty time more carbon than sourcing from the UK, so this is important from the perspective of both UK – and particularly Welsh industry - and environmental objectives. Steel producers join the ceramics sector, based mainly in the Midlands, in highlighting the imbalance between the price they pay for electricity and that paid by overseas competitors.
Government investment in support of these sectors must prioritise job creation. Research by Transition Economics for the TUC shows that an £85bn programme of investment now could create 1.24 million jobs over the next two years, with significant benefits for jobs in each region of the UK. Government should use its procurement powers to focus on high quality jobs and every new infrastructure project must come with an Olympics-style plan to promote good quality jobs and training.
Government must ensure that investment aims to promote decent work, against the background of a strong framework of employment rights that prevents a race to the bottom.
Skills are an essential part of the move to a just transition. And to make all this happen, a Just Transition Commission, similar to that which exists in Scotland, is necessary for the whole of the UK, with regions being able to input into its work.
An intelligent, sustainable industrial policy with a focus on delivering high employment standards at national level is necessary, but not sufficient, to bring about a just transition across the whole country. This policy must be complemented at the regional, sub-regional and local levels. Combined authorities and Local Enterprise Partnerships (LEPs), have a crucial role to play in shaping how infrastructure is delivered to maximise good job creation. Combined authorities, local councils and LEPs should work with other local actors to articulate the need for greater government investment in infrastructure, especially green infrastructure, and define what works best for those areas, including through recovery panels. Community and workforce representatives can ensure that infrastructure and regeneration is delivered in a way that meets genuine need and enhances wellbeing in those communities.
It is further essential that regional and local bodies work with trade unions to ensure that every investment programme comes with a plan for decent jobs attached; all infrastructure projects, including house building, should include framework agreements that maximise employment and training opportunities for local people and deliver great jobs, employment standards and positive industrial relations.
We have an opportunity to build back better – and build back greener after the economic crisis caused by the coronavirus pandemic. We must seize that opportunity to deliver the just transition working people want and need.
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As we have argued, government needs a co-ordinated industrial strategy that seeks to deliver a just transition to net zero. Key elements of this should involve:
We have called for regional recovery panels to help drive the recovery after the corona virus. These panels should be given a specific remit to look at just transition. These regional and devolved nation structures are essential because, as we have seen, there are wide variations across the country in terms of both the nature and scale of the challenges faced and the institutional arrangements and capacities for addressing these challenges.
As set out above, we argue for significant additional investment to aid the progress towards net zero. But investment alone won’t guarantee good jobs are accessible to the people who need them. Combined authorities and Local Enterprise Partnerships (LEPs), have a crucial role to play in shaping how infrastructure is delivered to maximise good job creation.
Public sector organisations can have significant spending power, which can be used as a strong economic lever to stimulate and restructure a region’s economy. Combined authorities and local councils should work with anchor institutions in the region to coordinate strategic procurement spending in support of a just transition.
These objectives should be a key measurable outcome and condition of the financial support co-ordinated by combined authorities, local authorities and LEPs through City Deals, the Local Growth Fund and the forthcoming Shared Prosperity Fund.
To develop strong local recovery strategies, combined authorities and LEPs should establish new sectoral boards, bringing together with employers, unions and other stakeholders to support productivity improvements and better jobs across key industries. These sectoral boards would provide strategic guidance for each sector, looking at and planning for:
Worker voice must be embedded in these plans, whether through the promotion of collective bargaining at a workplace level, enterprise and sectoral level or using a social partnership model to ensure equal voice between government, workers and employers. Collective bargaining delivers. Workers in unionised workplaces have better pay, more training, better work-life balance policies, better pensions, and are less likely to leave their job.
More and more evidence shows that collective bargaining also delivers for workers across the economy too – particularly when workers can bargain with employers to set standards across a whole industry or sector. The OECD has published evidence showing that collective bargaining can help tackle inequality, boost business productivity, and help groups who are discriminated against in the labour market get and keep jobs. It also says collective bargaining is at the heart of how governments can deliver better work. Furthermore, as this report has demonstrated, worker representatives have detailed, specialised knowledge dating from years of experience in those sectors that are central to the transition from a fossil fuel-based to a low carbon economy. Their primary role is to protect and enhance the interests of their members, but wise employers see their unions as a resource, harnessing their expertise for the growth potential and success of the company or organisation.
To embed this kind of good practice and increase workers’ voice in the long term, combined authorities, local councils and LEPs should:
Regional and local responsibility for skills provision means that combined authorities and LEPs have an opportunity to drive change in skills provision in the regions and sub-regions. They should:
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