In the Programme for Government announced in September 2023, the Scottish Government committed to develop a Green Industrial Strategy. This should be seen as an opportunity to rectify the crisis of credibility on just transition which follows from years of inadequate action and failed targets.
This briefing sets out the context and the views of the Just Transition Partnership about the content of a green industrial strategy. The recommendations should be taken forward to deliver for workers and the climate, and are relevant for the development of strategies by both the UK and Scottish Government.
For decades, the market-based policies of Scotland and the UK have enabled the development of the economy to be guided by the actions and interests of large, often multinational corporations, with dire consequences for workers and communities. Meanwhile other countries with active industrial strategies have been able to ensure the employment benefits of transitions to renewable energy; and historical research shows that earlier energy transitions in the UK which were guided by interventionist governments could enable positive job progressions for affected workers.
Active industrial strategies have now returned to the fore as governments reckon with the planning that will be necessary to decarbonise the economy and build new industries that support quality work and emissions reductions.
Context in Scotland
The Partnership and others have repeatedly warned that the lack of serious government intervention into sectors like energy, transport, and industry would lead to failed climate targets and disruption for workers in the years ahead. Recent months have served to prove these warnings true and have demonstrated the gaping hole in the credibility of the Scottish Government when it comes to delivering a just transition for workers, communities, and the climate. Green job promises have been broken, climate targets abandoned, and public investment has fallen far short of the necessary levels.
A series of recent reports indicate weaknesses in planning and preparations for change. There is no current plan or proposal from the Scottish Government that gives confidence that performance will improve the foreseeable future.
- The Just Transition Commission’s letter to the Scottish Government about the Energy Strategy reveals clear frustration about the delays in producing the Energy Strategy, Climate Change Plan and the Just Transition Plans.
- The report of the Economy and Fair Work Committee on Just Transition in the North East and Moray echoes these concerns and also raises serious questions about the management of the Just Transition Fund.
- The report of New Economics Foundation on Delivering the Economy Outcome of the Environment Strategy finds that there are several significant gaps in Scotland’s performance towards a net zero, nature positive and circular economy
- Audit Scotland’s report on Decarbonising heat in homes reveals that we are off track, and we need an action plan and new targets from the Heat in Buildings Bill.
- The report by Transition Economics for the STUC on SCOTWIND: the investment needed to secure manufacturing jobs in Scotland which shows the need for “an enormous ramp-up in the Scottish supply chain for offshore wind”.
Deep-seated problems of a market-based policy frame
It is no longer sufficient to call attention to these serious problems with the planning and delivery of government policies, and hope for an improvement, while the Scottish Government appears to believe that public policy on climate change should be implemented through private corporations. For example, its uncritical pursuit of Foreign Direct Investment rather than on increasing levels of investment from within the Scottish economy amounts to putting Scotland’s assets up for sale to the highest bidders.
When this view that increased private finance flowing into public policy objectives is the solution is held by both ministers and senior decision-makers, the consequence are inevitably the decline in the public sector’s capacity and competence in delivering economic objectives and dealing with large corporations – which sadly has been on display in such cases as BiFab and Ferguson Marine. In this regard, it is important to register that recurring cuts to public services have reduced capacity, rather than to attribute blame to the competence of civil servants and local government.
Building a green industrial strategy for workers and communities
In this context, it is time to pick up from best practice internationally and the successes of the past across the UK to develop an industrial strategy for Scotland. The purpose should be to reset Scotland to deliver on climate ambition and nature protection while creating decent work across the economy and regenerating communities.
The best examples have seen the active leadership of the public sector in delivery through public enterprise, and the explicit regulation of the terms in which private investment and ownership should be used. Drawing on these, some key principles recommended by the Just Transition Partnership are as follows.
1 Objectives for the transformation of the whole economy
The framing of this industrial strategy should be how to deliver a just transition to zero carbon emissions alongside economic benefits for Scotland, like well-paid, secure employment. This means considering the transformation of the whole economy, not just selecting a few sectors in which there is currently a competitive advantage.
2 Analysis of the challenges in the Scottish economy
It must understand the barriers to change as well as the opportunities. Rather than just conduct a superficial SWOT analysis, it is time to accept and address key weaknesses of the Scottish economy. These include low levels of investment and start-ups, high degree of external ownership, a high proportion of fossil fuel sectors, poor skills utilisation and increasing precarity of work.
3 Capacity to make transformational changes
An effective industrial strategy must include the powers necessary to address these issues. It will have to enable an extension of public control over the outcomes from the economy, including through greater public ownership as well as clear obligations on large enterprises.
4 Planning investment and delivery of a just transition
Building on the existing intention to create Just Transition Plans, the industrial strategy should identify the investment needed, the implications for skills and the public programmes to deliver them. The overall plan should explain how manufacturing supply chains which respond to demand in Scotland can be built; and ensure continuity of work for the workforce and justice for any communities affected by current and past energy transitions.
5 Partnership processes
While the Scottish Government must lead, it must also act in partnership, drawing in employers’ commitment to the strategy’s goals. It should ensure that workers, through trade unions, affected communities and local authorities are integral to planning, delivery and monitoring – for which clear targets using just transition metrics will be vital