Cross-party think tank Demos has published a new report on how to secure a ‘just transition’ to net zero in the Black Country. The report, Net Zero to Level Up, is based on over 40 local and regional stakeholder interviews and meetings, reveals that the transition could leave 20% of the Black Country manufacturing workforce (12,000 jobs) long-term unemployed by 2032.
- Manufacturing is a traditional strength of the Black Country’s local economy, where 14% of jobs are in the industry, compared to a national average of 8%.
- Net Zero to Level Up comes in the wake of the government’s ‘trailblazer devolution deal’ which gave the West Midlands Combined Authority (WMCA) enhanced powers to influence the region’s economy
- The report predicts that if the new powers are used correctly, up to 20,000 net zero jobs could be created by 2032 in the Black Country, opening up new employment opportunities for residents, and that the 12,000 manufacturing jobs could be saved
- The report sets out recommendations for how local and regional institutions should use their powers to secure a just transition, defending existing jobs and maximising the new opportunities of net zero
- Recommendations include targeted support for vulnerable SMEs in manufacturing, and creating pathways for local residents to get the training they need to access new net zero jobs.
Demos has urged West Midlands Combined Authority (WMCA) Mayor Andy Street to use the new powers in the recently-announced ‘trailblazer devolution deal’ to secure a just transition to net zero in the Black Country – defending existing jobs in manufacturing and maximising new employment opportunities connected to net zero.
According to Demos’s research, a significant number of small businesses in manufacturing will face enormous challenges as a result of the transition to net zero. The think tank has sought to define a framework for achieving a just transition – one that increases opportunity while reducing deprivation – that can be replicated across the UK. The Black Country is a key geographical area for the government’s levelling up agenda, with all four local authorities identified as ‘priority 1’ for the Levelling Up Fund.
The report, Net Zero to Level Up, highlights the high number of energy-intensive businesses selling into threatened supply chains such as internal combustion engine markets, despite the transition to electric vehicles already being well under way, with 20% of UK car sales in 2022 either battery electric or plug-in hybrid vehicles. It also points to an existing business support system which fails to reach many small companies as another leading cause for concern.
Net Zero to Level Up also references age demographics, outlining that future investors are unlikely to employ a large number of older workers, even if they replace some of the jobs lost. With two thirds of the manufacturing workforce in the Black Country already over 40, they may struggle to find jobs of comparable quality if made redundant, the report warns.
Despite the risk of job losses, the report finds that a just transition is achievable: the 12,000 manufacturing jobs could be saved and up to 20,000 new jobs in industries such as housing and transport could be created, provided the necessary action is taken and that pathways are set up to enable people from disadvantaged backgrounds to access some of the new jobs.
To support a just transition in the Black Country, Net Zero to Level Up has produced a number of policy recommendations for regional institutions to implement, including the WMCA, the Black Country local authorities and the Black Country Chamber of Commerce. These include, but are not limited to:
1. Distributing government funded business support products through the Black Country Chamber of Commerce, alongside the banks, solicitors, accountancy firms and brokers that businesses have existing relationships with
2. A regional mergers and acquisitions service to facilitate purchase of firms which are too small to respond effectively to the challenge of net zero by larger firms with greater human and financial resources
3. Communication to businesses of the likely future demand for low-carbon infrastructure, including what any development of central government policy will mean for the West Midlands
4. Active co-ordination of public and private sector investment