The cost of energy has rightly been the focus of policymakers’ attention over the summer, with spiralling prices hitting Western Europe in ways not seen in decades. The immediate focus is rightly on how to ensure the UK can protect consumers and business through the winter. However, the challenges of the transition to net zero and ensuring inclusive economic growth remain.
It is these two challenges, and indeed opportunities, which face the UK that formed the basis of PwC’s events at this year’s party conferences. Partnering with the New Statesman we held a fringe event at the Labour Party conference to explore how the UK can genuinely and permanently rebalance, or “level-up” the UK economy, and the crucial role the transition to net zero will play in achieving this mission.
There is a growing recognition that a net zero economy is not only essential for the UK to meet its global obligation but that it comes with the potential to unleash dynamic new industries and jobs that can help drive long-term growth. The actions of businesses – their investments, their innovations and their people – will help drive the changes needed but success will require business leaders to, now more than ever, consider the wider social impact of their decisions. While the shift to net zero has the potential to spread economic opportunity to every part of the UK, it is not certain that this will happen organically.
PwC’s purpose is to build trust in society and solve important problems, and as part of our work to help businesses and governments understand the challenges ahead and plan for the transition, we launched our Green Jobs Barometer last year. The Barometer helps to chart the UK’s transition to net zero by measuring a unique set of metrics that provide a picture of how well different regions are performing on key areas – including the number of green jobs that are emerging, the additional employment those jobs create, and the number of “sunset jobs” that could be lost.
This last category – jobs lost in the transition, or ‘”sunset jobs” – is particularly crucial for businesses and successive governments to understand and plan for. There will clearly be jobs lost in heavily carbon-dependent or producing areas that are clustered in certain parts of the country.
A coherent approach to reskilling is key to minimising job loss, and this requires close collaboration between business and government. For example, PwC’s most recent analysis shows that skills in the energy sector are highly transferable to roles in renewables and that, with government and business support, there is the potential for significant growth in jobs rather than job losses.
Close attention also needs to be paid to how green jobs will be distributed across the country. Our Barometer shows that green jobs are already favouring certain areas, and that these won’t necessarily be those set to lose the most jobs in high-emitting industries. We will continue to monitor this shift through our Barometer to identify the areas where support and investment needs to be targeted.
For example, regions such as Yorkshire and the Humber and Wales have scores across the Barometer’s metrics that demonstrate they are beginning to lag behind the rest of the country, while London is outperforming in terms of new green jobs being created. These results cast a light on the need for a fair transition and highlight the challenges the government’s levelling up agenda will need to overcome.
Over the last year we have been convening working groups of businesses, skills providers and policymakers across the UK to look at these challenges in greater detail. PwC is committed to maintaining our focus on these issues and will be publishing an update to the Barometer in November.
We believe that by acting now we have a massive opportunity to rebalance the economy and ensure a fair transition.