Latest Government figures spark fears that UK’s green economy is ‘stagnating’

The latest Government figures reveal that turnover in the UK's low-carbon economy was £46.7bn in 2018, up from £40.5bn in 2015. But the 2018 figure is still equivalent to just 1% of national non-financial turnover, experts have warned.

Latest Government figures spark fears that UK’s green economy is ‘stagnating’

Published this week, the Office for National Statistics’ (ONS) low-carbon and renewable energy economy figures for 2018 reveal overall – but not sizeable – growth in the sector since 2015.  

The digest covers businesses involved in renewable energy generation and distribution, and the manufacturing of carbon-saving products, stating that annual turnover in this space increased by £6.2bn between 2015 and 2018.

It reveals that the biggest drivers of turnover (36%) and employment (51%) within the sector were energy-efficient products. In terms of exports, the biggest contributor to turnover was found to be low-emission vehicles, despite challenges to UK manufacturing as a result of factors such as Brexit and slow legislation changes.

As for jobs, the digest states that employment in the UK’s low-carbon and renewable energy economy was equivalent to 224,800 full-time jobs in 2018, up from 200,800 in 2015.

But previous figures from the ONS claimed that there were 235,900 full-time jobs in the sector in 2014, meaning that there has, overall, been a slight decrease in employment in the sector over the past six years.

The loss of thousands of jobs between 2014 and 2016 has been attributed to policy changes such as cuts to solar power subsidies and the exclusion of onshore wind projects from the Contracts for Difference (CfD) auction process, compounded by slow policy progress in the transport sector.

The uptick in employment over the past two years, meanwhile, can be aligned with improvements in policy frameworks around areas such as offshore wind and energy efficiency.

Industry reaction

The Department for Business, Energy and Industrial Strategy (BEIS) claims that the ONS figures for 2014 were “distorted” and that employment in the sector has continued to rise on a year-on-year basis. BEIS is targeting two million “green-collar” jobs in the UK by 2030 as part of the nation’s 2050 net-zero target.

Industry experts, however, have expressed concern about the Government’s ability to deliver, based on its track record.

“The uncomfortable truth is that the low carbon and renewable energy economy made up just 1% of total UK non-financial turnover and employment in 2018 and has stagnated at that level for several years,” Business in the Community’s environment director Gudrun Cartwright said.

“While employment numbers and turnover in the UK’s low carbon and renewable energy economy increased slightly on the previous year, they’ve not increased anywhere near enough. We only have two or three business planning cycles before our 10-year deadline to limit climate change catastrophe, but the green economy is still tiny in comparison. The green economy needs to be urgently embedded within UK plc if we are to avoid an existential threat.”

Similarly, the TUC’s secretary-general Frances O’Grady said the UK is “making next to no progress” in “transforming its economy to safeguard our future”.

“The climate emergency is a major threat to the living standards of British people,” O’Grady said. “There should be a very good news story to tell. A path has been open to us for a long time now that’s full of opportunities to create good quality green jobs. By taking this path, we can revitalise towns and communities that lost traditional industries.

“No more excuses – the Government must sit down with unions and businesses to plan a just transition to a fairer, greener economy.”

The TUC is notably campaigning for the Government to create a cross-party commission focused on ensuring that the transition to net-zero by 2050 is socially and economically “just”; not excluding any region or social demographic, or placing the burden of the transition on those with the least money or influence. 

Similar calls to action have been made by the likes of the Institute for Public Policy Research (IPPR) and the Aldersgate Group. Before she stepped down as Energy Minister and into her new role as COP26 president, Claire Perry-O’Neill said the Conservative government would only follow net-zero advice which would not exclude entire regions or social classes from the transition to carbon neutrality. 

Sarah George

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