Investment, jobs and justice: the new green consensus 

In Scotland on Monday 20 June Keir Starmer set out Labour’s vision for the energy system. At its heart is an ambitious goal to decarbonise the power sector by 2030, one of five ‘missions’ he hopes will define a future Labour government.

Prospect’s senior deputy general secretary, Sue Ferns

The UK desperately needs a new approach to energy policy. Millions of households remain in fuel poverty after bills surged last year. We lack a plan to meet our international climate commitments as the world races towards 1.5C of warming. Meanwhile workers in the sector face an ongoing crisis of understaffing, overwork, and unsafe conditions.

Countries around the world have found a better way forward. As President Biden’s Inflation Reduction Act has shown, bringing together an energy strategy with a climate strategy and an industrial strategy can begin to address the interconnected challenges we face.

Recent analysis from the Climate Change Committee shows that net zero offers an opportunity to rebuild the British economy with good jobs in every part of the country. Labour is right to take inspiration in how to deliver this from the US, which created nearly ten times as many green jobs in the first seven months of the Inflation Reduction Act as the UK has managed in seven years.

But as Prospect set out in a new report last month, we shouldn’t underestimate the scale of the challenge ahead: decarbonising the power sector requires a transformation of our energy system. Doing that in a way that also delivers good jobs requires a transformation of how we manage the economy. Success rests on three areas of action.

First, a government committed to decarbonisation has to drive investment into all parts of the energy industry. A huge amount of low carbon infrastructure needs to be built. Even on current government plans, over the next seven years we need to deliver five times as much transmission infrastructure as we have in the last three decades, three times as much additional offshore capacity as we’ve ever built, and the first new nuclear reactors since the 1990s.

Private investment will be central to this, but public investment is needed too. Labour’s commitment to £28 billion a year of public investment in green infrastructure is the right scale of ambition. Its plans for a new public company to invest in clean energy generation and a National Wealth Fund to invest in net zero supply chains are much-needed responses to the global race for clean energy investment sparked by the Inflation Reduction Act.

Second, industrial strategy needs to actively prioritise the creation of well-paid, high-skilled green jobs. As economist Dani Rodrik argues, it is not enough to just hope that good jobs will inevitably flow from net zero or other policy goals – however important these goals are in themselves.

Labour promises a modern industrial strategy, with the 2030 clean power mission at its heart. An incoming Labour government would need to work in partnership with trade unions and use every tool at its disposal to deliver good jobs in the energy sector. Prospect’s report suggested several ways to do this, including prioritising companies with decent employment practices in Great British Energy’s spending decisions and Contracts for Difference auctions. Every pound of public money spent should support good, secure, unionised jobs.

Third, the principles of a just transition must be taken seriously. For decades trade unions have been calling for a proper plan to ensure no workers or communities are left behind by the move to a low carbon economy. Towns and cities around the UK still bear the scars of deindustrialisation and the poorly managed transition away from coal. Past mistakes cannot be repeated.

The Treasury is due to receive a £1 billion annual windfall from new offshore wind lease agreements. Using this money to establish a new fund that provides support and training for workers and communities dependent on high carbon jobs would demonstrate commitment to a just transition. With polls showing public support for climate action depends on it being seen to be fair, this is vital to maintaining trust in net zero.

These three themes – investment, jobs and justice – form the foundation of a new green agenda being adopted by progressive governments around the world. While the outcome of the next general election remains uncertain, if Labour is serious about transforming the energy system it must get ready to deliver on them.

Sue Ferns is Prospect’s Senior Deputy General Secretary