The Green Transition: Can Labour level up?... and other news
Weekly analysis of the shift towards a new economy.
Dear Readers,
Happy Friday from the Spotlight on Policy team. As ever, you can find our policy coverage on our section of the New Statesman website.
Not much in the news at the moment, so apologies for this light introduction.
We’ve got an excellent guest-authored piece from the Centre for Progressive Policy (CPP) this week.
As last week’s GT analysis explored, Labour’s big pitch on net zero involves some big assumptions around whether climate investment can be used to “level up” regions that needed more investment historically.
Green industrial strategy will, according to some readings, present us with a way to leverage a manufacturing renaissance in communities outside London and the south-east. But research from the CPP suggests this isn’t necessarily the case. See below for analysis from Ross Mudie, their senior research analyst.
Let’s get right into it.
PS: Do read on for a discussion of how Labour’s green policy agenda is being sold to an excited electorate, and why there might be some holes in the opposition’s claims. Onwards to 4 July!
ARGH! IT’S FINALLY HAPPENING!
We’ll be back next week once we’ve calmed down, with some even more level-headed election analysis.
***A message from our partners: The private markets are bouncing back: Governments are seeking to boost their economies via industrial strategy, expansionary fiscal policies, derisking, and by driving private capital into domestic industries in a way that reflects their strategic priorities – particularly around net zero.
A new study from State Street analyses how the next five years will be a key period for these markets after the recent macroeconomic challenges. Get the full report here.***
The green transition is no panacea
The transition to a greener economy is one of the few big opportunities we have to level up the UK – or so we have heard. In the run-up to the general election on 4 July both of the main parties will argue that net zero could be pivotal to helping alleviate the UK’s persistent regional inequalities. The Labour leader Keir Starmer stated in a recent speech that “we can use the opportunity of clean energy to create jobs to deliver security and bring back hope to communities that got ripped apart by deindustrialisation in the 1980s”. But a new report by the Centre for Progressive Policy highlights that we might be wrong to assume that the economic opportunities of the green transition will be reaped primarily by poorer parts of the country.
Our report looks at where the country stands today on filling green jobs and where we need to be heading tomorrow. The “green skills gap” – the gap between the number of green jobs and the number of qualified workers available to fill them – is well known, and it is a binding constraint on the UK’s ability to develop green industries. Our analysis, which matches the skills of different “non-green” and “green” occupations based on how similar they are and maps this comparison across England and Wales, suggests that some parts of the country are far better placed than others to capitalise on the green transition.
We find that while there are some post-industrial areas – including coastal Cumbria, Lincolnshire, East Yorkshire, coastal East Norfolk, and Teesside – with a higher concentration of workers with the right skills to build green industries, they are the exception, not the rule. Indeed, there is no correlation between areas that suffer high deprivation or low productivity and areas with workforces that have high potential to transition into green jobs.
We also find that many workers who could be most easily retrained into higher-paying, higher-productivity green jobs tend to live in areas that are already wealthy: the report identifies the City of London, South Cambridgeshire, Cambridge, Wokingham, and Richmond upon Thames as five of the areas best placed to train workers to develop green industries.
But there may be hope for some poorer areas. We also identify what we call a relative pay effect for workers switching into green jobs. This means, to put it simply, there are some places – such as Nottingham, Blackpool, Barking and Dagenham, and Luton – where there are more workers with relevant skills who could earn a pay rise by switching into green jobs. This might provide a greater incentive for workers in these areas to change to green jobs, compared to other areas with lots of already well-paid workers – such as inner London, or Derbyshire’s wealthier manufacturing communities. The silver lining is that there is an opportunity to support workers in these areas to switch into better paying, good green jobs, wherever we can.
What does this mean for UK policymaking?
While the net zero transition may help “level up” some poorer communities, it is not a silver bullet for resolving regional economic divides.
To realise the potential of the net zero transition to help tackle regional inequalities, policymakers must be aware that different areas are starting from vastly different positions. A new green industrial strategy is needed, but a “one-size-fits-all” approach will not work. An approach that is blind to the huge variation in workers’ skills across different parts of the country risks the benefits flowing disproportionately to communities that are already well off.
We also need to hear much more detail from politicians about how they plan to reallocate workers across industries to support the growth of the green economy. Doing this will not be easy – and tough choices remain around which workers will be prioritised, where they currently live and work, and how we might target support. But over the next decade these are choices the government will have to make.
In addition, policymakers will need to think more about internal migration between regions, so that we can properly match potential green labour supply with demand.
Lastly, green jobs may not secure the economic future of all places, so any effective industrial strategy should seek to boost other emerging industries where necessary. The CPP report, Are we ready? Navigating the green transition in an age of uncertainty, is the first in a longer research programme looking at the economic transitions Britain faces over the next decade.
In Brief
Election stations!: Be sure to check out the New Statesman’s election coverage, updated regularly on our website.
And in other news: The Spotlight team has produced a plethora of special policy reports recently, with the most recent being focused on healthcare. We looked at the UK’s avoidably high rates of sickness-related economic inactivity, and how a future government can fix sick Britain. Read it in full here.
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The Green Transition is produced by Spotlight, the New Statesman's online policy section and print supplement. Spotlight reports on policy for the people who shape it and the business leaders it affects. Explore our in-depth reporting and analysis here.
Thank you for reading.
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