Scotland's National Strategy for Economic Transformation: equality position statement

5. Wider context

Due to the breadth of NSET's vision to reshape our economy and society, the factors that will influence its delivery are wide-ranging. Some of these factors are explored in more detail below.

5.1 COVID-19

The economic effects of COVID-19 have impacted disproportionately on many who were already experiencing inequalities. As our economy recovers, we must seek to mitigate any 'scarring' impacts that could have damaging long-term implications on the Scottish workforce. In the longer term, we need to improve employment outcomes for people who traditionally face disadvantage and/or are under-represented in the labour market. This particularly applies to people with low socio-economic status, young people, minority ethnic people, women, and people with disabilities. We recognise that there are barriers to participation in the labour market resulting in significant and persistent employment and pay gaps for these groups. Failing to take a targeted person-centred approach to improve outcomes for those specific groups who experience most disadvantage may lead to inequalities being entrenched further.

We recognise that a number of these groups overlap, for example the vast majority of lone parents are young women who live in more deprived areas; and women, disabled people and people from minority ethnic backgrounds are all on average more likely to be low earners. The COVID-19 pandemic has exacerbated some pre-existing inequalities (in relation to income, wealth, living standards, labour market participation, health chances and education outcomes) and highlighted the effect of deprivation as a driving force for multiple inequalities and poor outcomes^[6].

In addition, whilst the adverse economic impacts resulting from the COVID-19 pandemic are still unfolding, the pandemic has had a particular impact on reducing resources and resilience among businesses across Scotland, with an increase in corporate debt and some business still continuing to focus on survival. This might have an impact on advancing equality amongst the Scottish workforce and the labour market overall, and we recognise that equality and human rights need to be embedded and factored in from the start as priority principles that drive policy development and implementation.

5.2 EU exit

EU exit has impacted the Scottish economy and, when combined with the adverse impact of the pandemic, this might also negatively affect certain groups of the population^[7].

5.3 Just Transition and Climate Justice

The need for rapid global decarbonisation will transform markets, refocus businesses and provide opportunities to create new jobs, businesses and sectors. However, the impacts of climate change and the costs and benefits of the transition to net-zero are not always distributed fairly. The concept of just transition means reducing emissions in a way which is fair and leaves no-one behind^[8], a transition in which every region and community shares in the economic and social opportunities it presents. A just transition to net zero is central to NSET's vision, and particular consideration is needed for groups of people who traditionally face disadvantage in Scotland's labour market and economy.

Over the next ten years, technological change to improve competitiveness and productivity in our economy might impact certain jobs more than others, and the transition to net zero will impact on jobs and distribution channels in the oil and gas industry in particular. Evidence also suggests that climate change needs to be seen as a pervasive economic issue impacting differently on men and women, with women experiencing disproportionate impacts^[9].

The transition required to meet the emission reduction targets set out in the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019^[10] will represent one of a number of long-term structural changes to the economy and it is imperative we understand and mitigate risks that could arise in relation to regional cohesion, equalities, poverty (including fuel poverty), and a sustainable and inclusive labour market^[11]. The experience of the impacts of the transition to net zero and the capacity to adapt will be experienced differently across industries, regions and people. NSET, with its focus on a wellbeing economy, fairer prosperity, new markets and skills programmes, and projects relating to investment in skills and training throughout people's working lives, aims to tackle potential disadvantages that may be experienced by different groups during Scotland's transition to net zero.