London Jobs and Growth Plan

Meeting: 
Plenary on 2015-07-01
Session date: 
July 1, 2015
Reference: 
2015/1994
Question By: 
Jenny Jones
Organisation: 
City Hall Greens
Asked Of: 
Harvey McGrath, Deputy Chair of the LEP, and Cathy Walsh OBE, Further Education Representative of the LEP

Question

Why does the LEP not share the Mayor’s ambition for London to be a global leader in the transition to a low-carbon economy?

Answer

Answer for London Jobs and Growth Plan

Answer for London Jobs and Growth Plan

Answered By: 
Harvey McGrath, Deputy Chair of the LEP, and Cathy Walsh OBE, Further Education Representative of the LEP

Harvey McGrath (Deputy Chair, London Enterprise Panel):  Thank you.  The LEP is supportive of that ambition.  However, when we look through a jobs-and-growth lens in the way that our remit asks us to do, the work that we did on the future employment trends by sector in London did not identify the low-carbon sector as such a significant component of future job growth.  That is not to say that it is not important, but it is not as significant as other sectors, for example, in the tech and creative areas.

However, I am quite sure and would fully expect that when the next Mayor leads a full revision of the statutory Economic Development Strategy (EDS) - which is due for renewal, the last having been published in 2010 from data which was from 2008/09 - this objective will, as it is in the existing EDS, again be explicit.

Therefore, I am supportive but, in the context of looking at the diversification of the economic base of London, all the evidence that we saw did not identify it as significant as some of those other areas that we have talked about.

Jenny Jones AM:  I hear what you are saying.  However, climate change is a risk.  In fact, the Economy Committee here at the London Assembly was told last June by Lloyd’s of London that climate change “is the greatest threat to business for London’s SMEs” and that there is “limited capacity” to keep insuring them.  That would hit jobs and growth, would it not?

Harvey McGrath (Deputy Chair, London Enterprise Panel):  Yes, absolutely, it would, which is why I have said that the Panel is supportive of a low-carbon ambition, absolutely.

Jenny Jones AM:  PWC also told the Economy Committee that we are “importing a great deal of risk” through supply chains and that this is not well understood by most businesses.  Do you think the LEP understands it?

Harvey McGrath (Deputy Chair, London Enterprise Panel):  I am not familiar with the analysis that they have done, but what kind of risks are they identifying through the supply chain?

Jenny Jones AM:  For example, when climate change hits Indonesia, there is a drastic shortage in Britain of component parts for computers and IT generally.  If there are famines in various parts of the world that supply us with food, we also start to run out of food.  Supply chains are at risk from climate change and that could certainly affect jobs and growth here in Britain, could it not?

Harvey McGrath (Deputy Chair, London Enterprise Panel):  Supply chain disruption, however caused, yes, is clearly an inherent business risk.  I agree.

Jenny Jones AM:  You see, the Jobs and Growth Plan for London that came out in 2013, which I assume you are responsible for ‑‑

Harvey McGrath (Deputy Chair, London Enterprise Panel):  Yes.

Jenny Jones AM:  ‑‑ makes some passing references to climate change and low-carbon jobs, but it was not one of your priorities.  However, then London 2036, which you did with London First, makes absolutely no mention of climate change and low-carbon jobs at all.  I would have expected a mention.  No?

Harvey McGrath (Deputy Chair, London Enterprise Panel):  I acknowledge the point ‑‑

Jenny Jones AM:  This was just in January and the problem of climate change has been happening for a few decades.

Harvey McGrath (Deputy Chair, London Enterprise Panel):  The work that was done by McKinsey & Company that underpinned this report and the consultation process that we went through in order to winnow down the important priority issues in the context of London’s economy did not surface this as an overarching or specific issue, in point of fact.  The lens through which we are looking here is, narrowly, jobs and growth.  There are, clearly, other elements of the London Plan, of the statutory EDS and of the Mayor’s 2020 Vision that do, indeed, major on climate change and low-carbon initiatives.  However, this sits alongside of those and is looking more narrowly at a set of priorities that this group of people felt were those to focus on in terms of London’s competitive position.

Jenny Jones AM:  I said at the beginning that I take your point about the lens that you are looking through: jobs and growth.  However, for example, you may know that the Bank of England is looking at the issue of stranded assets.  That, clearly, is going to be a problem for jobs and growth.  I would have thought that if even the Bank of England, which has been incredibly slow to take up the issue of climate change, is looking at it, then perhaps you should be looking at it or the LEP should be looking at it as an overarching issue through whatever lens you are using.

Harvey McGrath (Deputy Chair, London Enterprise Panel):  That is acknowledged.  Let us take that thought away and have that discussion.

Jenny Jones AM:  The Bank of England has said that fossil fuel reserves that cannot be used if they become stranded assets could affect a third of the Financial Times Stock Exchange (FTSE) 100.  That sounds like quite a big impact to me.

Harvey McGrath (Deputy Chair, London Enterprise Panel):  I agree.

Jenny Jones AM:  I am glad I have your agreement.  I would also like to ask you if you are aware that the low-carbon sector employs 164,000 people: more than work in banking.

Harvey McGrath (Deputy Chair, London Enterprise Panel):  We did look at some of the statistics in the course of developing this report.  That number goes back to 2010 or 2011.

Jenny Jones AM:  Yes, there are more now, actually.  I am using the statistics that I have that are corroborated.

Harvey McGrath (Deputy Chair, London Enterprise Panel):  Yes.  We were not able to do that analysis and come up with those kinds of numbers and, looking forward, meaningful projections of them.  However, if you have that, I would be delighted to take a look at it.

Jenny Jones AM:  I cannot possibly do your work for you.  I am really sorry.  I do not have the resources.  Also, the green economy or the low-carbon economy is growing at 5% a year, which is a pretty good rate of return for investment.  I would have thought that would be something the LEP would have really liked to encourage.

Harvey McGrath (Deputy Chair, London Enterprise Panel):  Again, it did not come through in the analysis that we have been through and so, again, I would be very happy to take a look at the data.

Jenny Jones AM:  In his foreword to his Climate Change Adaptation Strategy, the Mayor says:

“...the drive to attract significant new investment into London, thereby securing tens of thousands of jobs through the delivery of vital infrastructure, goods and services, as well as developing world-class exportable skills.”

The Mayor at some point did accept that the low-carbon economy is going to be a massive boost to London, particularly in terms of exports of our own skills.

Harvey McGrath (Deputy Chair, London Enterprise Panel):  I acknowledge that.

Jenny Jones AM:  If you are saying ‘yes’ to me all the time, why is the LEP not actually doing something about it?  It is wonderful that you are saying ‘yes’ but ‑‑

Harvey McGrath (Deputy Chair, London Enterprise Panel):  I am not saying ‘yes’ in the following sense: the work that we have done does not suggest that we have a burgeoning ‑‑

Jenny Jones AM:  What work?

Harvey McGrath (Deputy Chair, London Enterprise Panel):  ‑‑ for example, export-based business around low-carbon technologies.  We have elements of that, but in the context of the overall London economy they are relatively small.  I would be very interested to see the analysis that supports the proposition that you have laid out in terms of the scale and size and to see how we can feed that in.

Jenny Jones AM:  Perhaps I can go back to London 2036.  There are some recommendations there that are relevant.  Our Committee heard that there are significant skills gaps in London in growth areas like the low-carbon economy.  What you could do, for example, is to respond to market shortages of technically capable workers by improving education and skills at all levels.  This would just be a way of not only encouraging the low-carbon economy but actually creating all sorts of opportunities, particularly, I would argue, for exports because other countries are going to desperately need the sort of low-impact technology that we could develop here.  Do you see that as a way forward?

Harvey McGrath (Deputy Chair, London Enterprise Panel):  I certainly see the role of London’s institutions in terms of research and development leading to technologies that are directly applicable in this context and the commercialisation of those into business propositions.  Indeed, it is something that should be encouraged and supported, absolutely.