Protect pay in transition schemes

Transition scale

The central case covers 100,000 workers a year receiving temporary pay protection during industrial or net-zero transition.

• CCC estimates 8k-75k job losses from net zero.
• Central case includes wider industrial transition.
• Average support is GBP 8,000 per worker.

Core trade-offs

Workers facing transition gain income insurance. Taxpayers or employers pay. If poorly targeted, it can slow necessary reallocation and preserve unviable jobs.

• Displaced workers gain income support.
• Taxpayers or employers pay.
• Bad design slows reallocation.

Illustrative fiscal impact

+GBP 0.1bn to +GBP 3.5bn. Central estimate: +GBP 0.7bn.

• Positive numbers mean public-finance pressure; negative numbers mean Exchequer savings.
• Gross costs are separated from tax, NI and benefit offsets.
• Private business costs are not automatically fiscal costs.
• Behavioural responses widen the range materially.
• This is not an official costing.

Economic impact by 2027-28

• Jobs: Protects incomes, not jobs; may delay movement from declining sectors.
• Wages: Maintains earnings temporarily for selected transition workers.
• Prices: Small aggregate effect unless levies or regulated prices fund it.
• GDP / productivity: Likely negative if unconditional; better if tied to retraining and viable jobs.

Assessment

Pay protection can reduce hardship during transition, but it is not automatically pro-growth. The economic case depends on whether it speeds retraining into productive jobs or delays adjustment in declining sectors.

Confidence: Low. The exposed workforce is uncertain and depends on industrial-transition policy design.

Main risks

• Reallocation delay: Pay protection can keep labour in low-productivity or declining activities.
• Eligibility pressure: More sectors may claim transition status once support exists.
• Regional lock-in: Support may preserve jobs where future demand is weak.

Safeguards

• Tie support to retraining milestones.
• Publish eligible sectors and expiry dates.
• Evaluate earnings after support ends.

Academic evidence

UK government evidence

Sources

• PolicyLens illustrative scenario methodology for protect pay in transition schemes Internal - PolicyLens, 2026
• A Net Zero workforce Official advisory report - Climate Change Committee, 2023
• Green Jobs Taskforce report UK government report - BEIS and Department for Education, 2021
• OECD Employment Outlook 2024 International report - OECD, 2024
• Rates and thresholds for employers 2026 to 2027 UK government guidance - HMRC, 2026
• Robots and Jobs: Evidence from US Labor Markets Academic article - Acemoglu and Restrepo, Journal of Political Economy, 2020
• Does Employment Protection Reduce Productivity? Academic article - Autor, Kerr and Kugler, Economic Journal, 2007
• Workers' Charter 2026 Party policy source - Green Party of England and Wales, 2026

Other Green policies

• Raise the minimum wage to £15
• Index public-sector pay to inflation
• Add public-pay restoration premiums
• Raise low-paid public-sector wages
• Cap organisation pay ratios at 10:1
• Create a single worker status
• Equal terms for outsourced workers
• Raise statutory holiday to 35 days