From skills to taxation: Major UK businesses set out net-zero priorities for Government

The industry has laid out five major policy demands for the Government to ensure the nation achieves its net-zero by 2050 goal.

The Group (CLG UK) has delivered the recommendations for the newly-created Department for Energy and Net-Zero as it faces a busy initial few months of work. The 2023 Budget statement is due in mid-March. Also in March, the Government will need to provide an update to its flagship Net-Zero Strategy, and is likely to be ready to respond to Chris Skidmore MP’s Net-Zero Review recommendations.

With all of this in mind, the Group, which convenes 16 major businesses, has issued a set of seven key net-zero recommendations to the new Department and to the UK Government more widely.

Chief among them is the creation of a new Office for Net-Zero – an independent body responsible for driving delivery and monitoring progress across all Government departments and arms-length bodies. The creation of this office was a key recommendation in the Skidmore review, commissioned to identify the most “pro-growth, pro-business” pathway to delivering the UK’s 2050 climate target and interim carbon budget. Skidmore heard much evidence that Government departments are working in siloes, leading to conflicting decisions and messaging, and slowing down processes.

The CLG UK is highlighting the importance of ensuring that departments working on topics including education, innovation and infrastructure have strong net-zero remits, as well as the Treasury.

Regarding the Treasury, the Group wants to see the development of a ‘Net-Zero Fiscal Reform Strategy’ which assesses the impact of net-zero policies on the economy. The Climate Change Committee (CCC) has placed the cost of the net-zero transition at 0.5-1% of GDP annually, down from 1-2% initially. But it has stated that these costs will not be shared fairly without reform of the tax system, and the CLG agrees.

The CLG UK also wants to see the Treasury working with other departments to ensure that the UK leads the way in climate-related disclosures. Good emissions data from organisations, it argues, is necessary to “empower financiers and business to make better informed decisions about capital allocation”. The UK became the first nation to mandate climate risk reporting for large businesses last year and is shortly set to implement a net-zero transition plan mandate for big businesses in high-emission sectors.

Also on finance, the CLG UK wants the Government to more clearly state its priorities for unlocking investment in emerging technologies, following years of stop-start subsidies and small funding pots for trials in certain areas. More long-term certainty, it argues, will send a stronger signal to the market – as has been the case as the US and the EU have firmed up new subsidy packages for cleantech.

Skills and communications

Another key focus of the CLG UK’s briefing to the Government is green skills and jobs – and ensuring that the general public understands the skills, jobs, financial and other benefits of the net-zero transition.

The Group is calling on the Government to develop a proper action plan for net-zero skills and jobs, setting out job creation figures to specific timescales and in specific sectors and regions, plus plans for upskilling and reskilling people to fill those roles. The Government has pledged to host two million green jobs by 2030 but has been slammed for failing to properly define a green job or to provide a thorough update of its skills strategy since net-zero was enshrined in law.

Decarbonising the economy will mean a different mix of jobs and skills than we have now,” the CLG UK report states. “This offers opportunities for better quality green jobs and could contribute to the government’s levelling up agenda.”

But poor planning on jobs and skills, the report adds, could delay the transition to net-zero, increase the costs of the transition, and shape it in a manner that is less socially just.

Summarising the CLG UK’s calls to action, the Group’s director Beverley Cornaby said: “We need to approach the hurdles ahead of us holistically– nothing meaningful will be possible if we tackle climate action in a piecemeal way. Taking this comprehensive view of action offers opportunities to move change along at pace and scale in meeting the UK’s climate targets. A cross-cutting approach means we can also address the needs of people, climate and nature simultaneously.”

The CLG UK’s members are Amazon, Anglian Water, Aveva, Coca-Cola Europacific Partners, EDF, Lloyds Bank, SalesForce, ScottishPower, Signify, Sky, Thames Water, Velux and Unilever. It also has two affiliate members – SSE and Heathrow Airport – plus Low-Carbon as an associate member.

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