SUBMISSION TO THE ECONOMY AND FAIR WORK COMMITTEE INQUIRY
The Just Transition Partnership* includes leading organisations in the trade union and environmental sectors and has played a significant role in creating the commitment in Scotland to policies for Just Transition. It welcomes this Inquiry into Just Transition for the Grangemouth Area and wishes to draw the attention of the Committee to the points set out below.
1 The role of government is to make the Just Transition happen, not just to support, incentivise and de-risk
The Committee should not start from the assumption that a just transition is going to happen in Grangemouth, one way or another. The overall and essential question is how we can ensure that a just transition does actually happen in Grangemouth and every area of Scotland, because there are not many signs for confidence about this. It is the role of the Scottish Government and the Scottish Parliament to do this, a role which is not properly captured by the phrase ‘support, incentivise and de-risk’ which seems to imply that this is a process with its own momentum where the role of government is to help it on its way.
2 A just transition must be worker-led
Workers themselves are best placed to shape and determine what a just transition means for their workplace, their industry and their community. Government must therefore engage workers and trade unions directly in just transition planning. However, equally importantly, they must require businesses to talk to trade unions by making Government support for business conditional on trade union access and collective bargaining at company and sectoral level.
3 The importance of Just Transition Plans for regions with significant dependency on fossil fuels
The Scottish Government has said that there will be a Just Transition Plan for every sector and region of Scotland. The Inquiry into a Just Transition to net zero for the Grangemouth area is a welcome stimulus to the process of thinking through how Just Transition principles, plans and projects are developed and implemented in a specific geographical area. It is very useful to start with areas, like Grangemouth, in which industries based on fossil fuels are located because these exemplify in clear ways the application of just transition principles to industrial change and the benefits and challenges associated with them. These plans are therefore important steps in demonstrating that the climate crisis can and will be met in a just way delivering better jobs, a better society and a better world for all.
4 Regional Just Transition Plans should cover the whole economy, not just fossil-fuel sectors
However it is not the case that the need for decarbonisation in the Grangemouth area applies only to the fossil fuel-based enterprises at the Ineos refinery and petrochemical plant. The port is another enterprise of Scottish significance and there are other employers in the area which, depending on how wide its boundaries are drawn, might include the bus manufacture Alexander Dennis. In addition, the communities of the Grangemouth area face the same challenges and opportunities regarding decarbonising demand for energy in a just way as any other Scottish community so logically the Just Transition Plan for the area must also cover transport, public services, the heating of buildings and the food and farming sectors. This approach, also involving community engagement, is necessary if the full benefits of a just transition are to be planned and anticipated – because they may be dependent on whole-economy plans.
5 Regional and sectoral Just Transition Plans must consider supply chains
Research for the STUC suggests that, with the right policies, meeting climate targets could create 367,000 jobs. However, without the right policies, job creation will be less than 131,000.i Crucial to this is ensuring that we retain and create manufacturing supply chain jobs in Scotland as part of the transition.
The Scottish Government must ensure local manufacturing jobs are created by requiring local content in all green energy leases and planning consents, building supply chains in Scotland. Investment should be targeted to sectors and enterprises in the supply chain to complement requirements for a minimum proportion of local content. Lessons must be learned from the recent Scot Wind leasing round, which has been shown to have failed to maximise opportunities for supply chain benefits and local ownership.ii
6 The National Just Transition Planning Framework needs elaboration for regional use
The process of Just Transition Planning is central to this Inquiry. The National Just Transition Planning Framework produced by the Scottish Government is a good starting point but it remains a high-level guide and has yet to be properly implemented in any sector. Furthermore it appears to be designed for application to industrial sectors at Scottish level and does not include any consideration of the integration of area-based just transition plans with existing geographic planning like development plans prepared under the land use planning system. It is therefore very useful for the Inquiry to investigate how sectoral, geographical and enterprise-level just transition plans can be created rapidly, consistently and consensually; and in what order.
7 A Just Transition Plan for Grangemouth should draw on the relevant sectoral Just Transition Plans …
It might be sensible to base a geographical just transition plan on the sectoral plans for the industries which are of greatest relevance. However to say this would be a recipe for indefinite delay in starting regional just transition plans. The first draft just transition plan is the Energy Strategy which is currently out for consultation, although we have serious concerns that this does not fulfil the minimum requirements for consistency with the Framework. It does not include reliable projections of the demand and supply for fossil fuels nationally, let alone as they might apply to the refinery at Grangemouth. It does not contain a workforce plan and contains very few new policies. The Scottish Government has said that it will produce draft JT Plans for Construction, Food and Farming and Transport (which will be of considerable relevance to Grangemouth) in 2023 but it would be rash to predict when these will be finally agreed with the respective industries. There is no known timetable for a sectoral just transition plan for the petrochemical and plastics sector within which the Ineos plant would fall.
8 … but starting the process in Grangemouth and other key areas should not be delayed until sectoral plans are completed
Pragmatically, just transition planning should start for all regions and sectors as soon as possible and run in parallel – they should influence each other. As the Framework says, these will be adaptable and iterative documents. This process should involve the engagement from the very start of representative organisations of the workforces and communities most affected including trades union councils. Furthermore, each should draw on just transition planning done at the business level. Every important enterprise, in private and public sectors, should already be making plans for decarbonisation and working with trade unions and its workforce to manage the process of change equitably – and with environmental experts to limit and mitigate any harm to the environment from transition plans; that is the essence of just transition planning.
9 It’s the responsibility of Government to start the process, within the framework of the Climate Change Act 2019
The process should be initiated by either the Scottish Government or the local authority, Falkirk Council, but should proceed in partnership with local trade unions and business organisations and engage with community bodies. The framing should be provided by the targets set in the Climate Change Act 2019 and the contribution to that which must be made within the Grangemouth area. It should consider how the required changes will be made to happen and their implications for workers and communities, in particular changes in the types and numbers of jobs. On that foundation it should make plans for the investments needed, planning for the relevant skills, the offer of jobs and support for the workers affected and the protections and improvements needed by local communities.
10 The key Just Transition Outcomes should guide both forward planning and monitoring of the benefits for the Grangemouth community
Both the forward planning and the monitoring of the local Just Transition Plan should be based on a clear and measurable set of targets. The outcomes for these should be derived from the Scottish Governments’ Just Transition Outcomes but these are not, in our opinion, specific enough – furthermore there are now two versions, one in the Framework and the other in the Energy Strategy. In our view the key indicators are:
- Job creation – numbers in new industries or processes
- Emissions reductions achieved
- Numbers of people making job transitions
- Skills necessary for transition – delivery and utilisation
- Pay , conditions andcollective bargaining
- Distribution of costs and benefits to communities and citizens – reductions of inequalities
These indicators give a clear view of what we believe should be the benefits of the just transition for the Grangemouth community
11 The Just Transition Plan has to attend carefully to delivery so should include financial projections as well as jobs.
Once the overall trajectory of the plan is established, commitments regarding the investments needed to make it happen will have to be sought, from both businesses and the public sector. The case for a government fund comparable to the Just Transition Fund for Northeast Scotland should be considered. Wherever public money and assets are involved, appropriate requirements should be stipulated which can ensure both the commitment of private companies to achieving their share of the plan’s targets and ways of tying down the public benefits – where possible this should include options for extension of public ownership to give a direct stake to the community.
12 Proper skills planning should respond to the actual and anticipated labour demand in the area
The skills required to deliver the transition are not being invested in at thenecessary pace or scale. There is too little work being done on upskilling workers to enable them to move to new industries when they come on-line. Plans for investment in skills training should respond to assessments of labour demand developed within the plan. Funding for training of the existing workforce should be expected from employers while colleges should commit sufficient budget to training of new recruits into the relevant local sectors.