Putting the UK on track for a fair energy transition

Despite its welcome mission to shift Britain to clean energy, this government currently has no plan to ensure that the transition benefits the UK’s energy workers and communities. It needs to get one fast.

This government has made an enthusiastic start to its essential mission to transition the country to clean energy, in the space of just a few months setting up ‘mission control’, appointing officials, unblocking clean energy projects and championing billions in investment. 

Missing, though, is a clear transition plan for the UK’s energy workers and communities. If the UK is to take full advantage of this enormous shift, concrete steps are needed now to ensure that the benefits reach, in particular, those workers, supply chains and communities that are currently dependent on the declining North Sea. 

The current patchwork of policies – focused overwhelmingly on attracting investment – will not, as things stand, deliver a fair transition for the North Sea. For that to happen requires a plan.

Act now, don’t wait

The need for workforce transition planning is now urgent, both because of the pace and scale of escalating climate impacts and for the wellbeing of workers and communities already experiencing the transition's sharp edge. The UK’s shift away from oil and gas production is already well underway as the North Sea’s reserves decline, with the number of jobs supported by the industry more than halving in the past decade. 

The UK government needs to get ahead of this decline now, before skills and supply chains are lost and the recent announcement that the Government is stepping in to speed up the delayed “Skills Passport” for oil and gas workers is a positive sign. But the Grangemouth oil refinery should provide a warning: government intervention needs to come early, unions need to be involved from the outset, and decisions cannot be left solely in the hands of industry. 

It is not a given that the benefits from private investment reach UK workers and communities. Renewable energy has seen huge growth in this country, making the UK the world's second largest offshore wind market, but this has not yet led to a surge in clean energy jobs to replace them. Instead, much of the economic and social benefits have gone overseas. 

Policies to pull the money in

The UK’s clean energy transition, one of the pillars of the UK’s new industrial strategy, will pave the way to more stable energy bills and help tackle the climate crisis. This central mission is supported by three major policies: Great British Energy, the National Wealth Fund, and the British Jobs Bonus. 

All three of these headline policies, as currently imagined, see the government courting private investment above all else. So far, they lack details or a focus on how they will help energy workers and the country’s oil and gas-dependent communities and regions. 

• Great British Energy is a public company that will own, manage and operate clean power projects, but based on announcements so far, it is unclear how it will create the jobs it is promising and where and for whom these will be. 
• The National Wealth Fund has just had its remit expanded to cover the full new industrial strategy, raising questions about how much it will focus on the energy transition. The Fund’s advisory taskforce, which is dominated by investors with no involvement of unions or affected communities, has recommended that its primary goal should be to mobilise private capital over any broader social objectives. As one MP joked, is it “getting Blackrock to rebuild Britain”?
• The British Jobs Bonus intends to create jobs and attract investment in Britain’s energy heartlands but there is currently an absence of detail, for example, on whether or not job quality will be a requirement for government financial support. 

Unless these policies are specifically designed to do so, the UK will not gain the full benefits of its clean energy transition, whether that’s securing good quality UK jobs in the places that are experiencing decline, growing new industries such as decommissioning, reinvigorating our port towns, or building wealth in deprived communities. 

The current narrow focus –  on returns for investors – risks recreating the inequalities and failings inherent in the current energy system, where wealth and jobs flow overseas. Private investment will not guarantee good, secure jobs for workers in the places that need it most. We need a plan for that.‍

Policies for workers

This government has set about improving the lives of working people, with important changes being made through, for example, the New Deal for Working People and a better relationship with unions. 

But the UK’s energy workers have urgent and specific needs that also need to be met. Right now, 26,000 people are directly employed in the industry and a further 95,000 in the oil and gas supply chain, which together support whole communities, particularly in Aberdeen and the North East of Scotland. 

In immediate terms this means setting out in detail how the government’s three headline policies – Great British Energy, the National Wealth Fund, and the British Jobs Bonus – will be made to work for oil and gas workers and supply chains.

All three policies need to include: credible plans that get into the specifics of where and how opportunities will be created and that transparently explain how these policies will result in new jobs; and balanced governance, so that private interests do not dominate them and instead centre workers, communities and the public interest; and all three headline policies need to be coherently integrated into a wider transition plan for the North Sea.

By themselves, though, these policies will be insufficient to create a fair energy transition for workers. For this to happen will require: 

• A credible North Sea transition plan 

The current sector plan – the North Sea Transition Deal – is not fit for purpose and needs to be scrapped. It hands responsibility for the transition to an industry that is choosing to prioritise shareholder dividends over investment and jobs. Oil and gas companies have neither the capacity, nor are their interests served, by coming up with a broad and coherent plan for the North Sea energy transition that takes account of the needs of workers, the supply chain, communities, and the country as a whole.

In its place the UK needs a new coherent plan, a New Deal for the North Sea – jointly governed by Westminster and Holyrood, unions and industry – which would get into the detail of how this government will support the building of thriving renewable energy anddecommissioning industries, their supply chains and critical infrastructure, and which would ensure job creation in those regions with high oil and gas dependency. This includes, for example, investing in port upgrades and in domestic manufacturing of wind turbines to create new, permanent jobs in clean energy.

• Routes into quality jobs

Oil and gas workers need to be able to access good quality jobs in clean energy, which means the government needs to turn its attention today to reform the skills and training system and improve conditions, pay, and representation in the clean energy industries. The Offshore Skills Passport scheme needs to be rolled out, alongside skills and training reform, with costs borne by employers, not workers. Current oil and gas workers need to be further supported, for example, via a North Sea job guarantee and welfare support programme, driven by the new Office for Clean Energy Jobs.The government could improve the quality of new clean energy jobs through legislating to guarantee full employment rights and at least minimum wage to all offshore energy workers, as well as support for collective bargaining and union representation across the industry. 

• Communities gaining a share of the wealth.

Communities dependent on oil and gas have suffered as the North Sea declines. Aberdeen, for example, once one of the UK’s most affluent regions outside London, has had a ‘disastrous decade’, seeing a steep fall in incomes alongside rising levels of fuel poverty and emergency food bank use. 
The Government should introduce local just transition agreements, which would see local authorities, community and worker representatives given powers to build community wealth and local ownership through the energy transition, drawing on previous examples from the UK and abroad, such as legislation that gave communities in Shetland a share in the profits of oil.

‍Winning public backing 

‍This government has told a compelling story of the public benefits of the green transition and currently, the overwhelming majority of the public supports the UK’s shift from oil and gas to renewable energy, believing that the UK’s enviable renewable resources can provide not only reliable energy but also prosperity. But there is also scepticism about the transition’s benefits to ordinary people, and workers in particular, not least because much-hyped ‘green jobs’ have previously failed to materialise in the numbers and quality required. The history of industrial shifts in the UK, including the unjust transition away from coal, looms large.Public backing will be lost if decarbonisation becomes synonymous with deindustrialisation. If the government is to succeed with its popular clean energy mission, at least as much attention needs to be paid now to the needs of workers and communities as has been paid to global investors.