The UK has a competitive advantage over the rest of the world in a third of green products and services, giving it a head start in the race to achieve net zero, according to an upbeat report by a left of centre thinktank.
Firms are well placed to manufacture many of the most crucial green products – from electric trains to heat pump components – despite 40 years of decline that have left the UK industrial base smaller than many of its competitors, the Institute for Public Policy Research (IPPR) said.
The UK is particularly strong in making products and components used for monitoring, measuring and analysing industrial processes that will play a large role in the decarbonisation of the economy – such as the electricity grid and renewable energy generation.
To expand the number of industries capable of manufacturing products that will help achieve net zero, ministers will need to develop a mechanism for supporting businesses that want to expand the range and sophistication of what they produce.
Arguing that ageing industrial plants should be “greened” rather than closed down, the report said state subsidies would allow the UK to make less carbon-intensive steel and avoid an over-reliance on imports that have travelled thousands of miles.
The onshoring of factories to make vital components would shorten supply lines, making the UK “more resilient to future shocks” while also reinvigorating the economy.
George Dibb, the head of IPPR’s Centre for Economic Justice, said the geographical spread of industries primed to support the move to net zero meant the government could level up regions at the same time.
“Over the past 30 years we have slipped sharply behind our global competitors in the quantity and kinds of things we actually make,” Dibb said. “That’s bad for jobs, for living standards, for our security – and for our long-term economic strength as a country.”
“Yet UK manufacturers still have a competitive edge in making some of the products vital for a net zero economy, and with the right government support we have the potential to be world-leading in many more.”
Dibb said all the major products needed to achieve net zero were already available, allowing ministers to use the report as a crib sheet to identify areas in need of Whitehall subsidies.
To assess the UK’s green strengths, the IPPR identified a set of 143 products that could be linked directly to technologies and steps needed to deliver net zero. It found that the UK had a comparative advantage over international rivals in a third.
However, a separate report by MPs also out on Wednesday argues that the UK is ill-prepared to build climate-resilient infrastructure without a huge investment to raise the level of skills in the workforce.
The all-party public accounts committee (PAC) of MPs found that skills gaps in the UK’s workforce were compounded by competition from major global development projects.
“Project management and design are also areas of concern, and [a lack of] skilled professionals in senior positions in particular,” the parliamentary spending watchdog said.
Its report found that 16,000 project professionals must gain accreditation from the government’s project leadership academy to carry out vital work, but only 1,000 have so far.
The MPs found that an “unprecedented” scale of investment was under way across the rail, road and energy sectors with little oversight by ministers or evaluation by civil servants.
The report concluded: “Only 8% of the £432bn spend on major projects in 2019 had robust impact evaluation plans in place and around two-thirds had no plans at all. This is despite high quality evaluation being important to provide evidence for what works, demonstrate value and to make the case for or against further investment.
“Decisions are being made in the absence of evidence, putting value for money at unnecessary risk.”
