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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 105-v House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE ENVIRONMENTAL AUDIT COMMITTEE
THE INTERNATIONAL CHALLENGE OF CLIMATE CHANGE: UK LEADERSHIP IN THE G8 AND EU
Wednesday 19 January 2005 SIR DIGBY JONES AND MR MICHAEL ROBERTS Evidence heard in Public Questions 455 - 531
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Environmental Audit Committee on Wednesday 19 January 2005 Members present Mr Peter Ainsworth, in the Chair Gregory Barker Mr Colin Challen Mrs Helen Clark Paul Flynn Mr John McWilliam Mr Simon Thomas Joan Walley ________________ Memorandum submitted by the CBI
Examination of Witnesses
Witnesses: Sir Digby Jones, Director-General, and Mr Michael Roberts, Director, Business Environment, CBI, examined. Q455 Chairman: Good afternoon and welcome to the Environmental Audit Committee. Sir Digby Jones: Thank you for having us. Q456 Chairman: Mr Roberts is making a reappearance before the committee and Sir Digby Jones is making his first appearance. Congratulations on your new knighthood, Sir Digby. Sir Digby Jones: Thank you very much. Q457 Chairman: It is good to see you. We are going to divide this session into two: first of all, questions relating to our inquiry on the international leadership on climate change and then towards the end some questions relating to one of our other inquiries which is to do with the Pre-Budget Report. I will try to make it clear when we switch from one to the other. First of all, can I ask you, Sir Digby, whether you agree with the government's Chief Scientific Adviser, Sir David King, that climate change is the most serious problem facing mankind? Sir Digby Jones: I am not too sure I would say that it is the most serious problem. I would say it is up there as one of the first equal. I think there are one or two other equally serious problems. It is certainly not the second most serious. It is first or first equal. Q458 Chairman: Do you accept, following on from that, that we need in the developed world to make reductions in our emissions of between 60 and 80 per cent by 2050? Sir Digby Jones: I do, and I will go further than that and say that I am very pleased you used the words "developed world". I am very pleased that the European Union, led in many ways by example by Great Britain, have set stringent targets and have said that they will go for it. I just wish America was doing the same and we have not a hope of getting India and China and other emerging nations on board, especially those at the top of the developing world. India and China have got to the point where I do not even think we can call them developing any more. They are very much beyond that. We need in the developed world to set an example, so not only do I accept that but I would call on the United States to not only do something but be seen to do something because I think the example set is as important as saying we are going to try and do it. Q459 Chairman: I am delighted that we have got off to such a positive start, Sir Digby. Sir Digby Jones: I agree, it is a positive start. I am proud to lead businesses which really do want to do their bit. They really do understand how important the issue is and they do want to play their part in contributing to cleaning up the planet. If it is something where you may perhaps, Chairman, have been thinking, "Are we going to get such a positive start?", I will just mention with my tongue in my cheek and a smile in my eyes but nevertheless true, that it is a year to today since I used the immortal words in a press release which has been quoted many times very happily since, that the problem is that the UK Government risks sacrificing UK jobs on the altar of green credentials. I stand by that remark one year to the day, and in the same release when I said that I also said, "Britain should lead the world on the environment issues but not to the extent that some other EU members and other competitor countries profit from our good intention". I am sitting here today saying I am proud that I belong to a nation, my members belong to a nation, that is leading from the front, that has a Prime Minister who has said that he is going to make it the central tenet of his G8 chairmanship; I am proud that my members do and, by the way, they could do so much more as well. However, the issue where we might not find so much common ground, Chairman, is that I worry that we go into the ring of global competitiveness with one hand tied behind our back because we are one of the few nations that lead from the front and others do not and that renders us uncompetitive. Q460 Chairman: This, of course, is worrying because whilst we welcome the fact that you recognise the potential profound seriousness of the problem, the qualification you have subsequently places on the issue means that the CBI has been actively engaged in trying to water down various governmental measures to seek to mitigate the problem and it seems to me that, with the greatest respect, you cannot have it both ways, ----- Sir Digby Jones: Why not? Q461 Chairman: ----- that this is one of the first equal problems facing mankind and at the same time be seeking to diminish the efforts which Britain is making both at home and in international fora to tackle the problem. Sir Digby Jones: I disagree with you. I would say we can but, more importantly, if anybody thinks that by ensuring that jobs are lost in Britain, that businesses migrate to countries where I would criticise their regime because it is not as environmentally friendly but nevertheless in the real politic of life they go there, if you think that is going to clean up the planet more quickly, by having more polluting countries getting more business operating in their countries where the more environmentally friendly countries such as ours with a stricter regime, which we happily embrace, is going to lose work because of it, think again. Q462 Chairman: But do you not accept that if Britain is to take the leading role, which you say you are proud to see the Prime Minister taking, although it is mainly rhetoric at the moment and anyone can be proud of rhetoric, it will involve showing a lead by taking effective action to tackle the problem, not just making speeches and lecturing other countries and at the same time allowing our industry to continue to treat the environment in a way which is damaging. Sir Digby Jones: I could not disagree with that, could I? Of course it is right that you get maximum effect from recommendation if you have the moral high ground of setting a good example. Q463 Chairman: But you can flip it round and say that if we are not setting a good example, if we are not doing everything we possibly can - and clearly everyone recognises that there are economic constraints to this, of course there is an economic dimension to it - then we have no credibility in the international community when we come to lecture other people about how they should behave. Sir Digby Jones: We are in violent agreement, Chairman. What I am saying is that there is a massive difference between saying, "Let us be the best at this", - which we are not, by the way, but we are on the way to being, - and then over-achieving to the point where you render the business environment uncompetitive so that yes, I might then be unhappy because you damage business in this country, - and, by the way, that would mean less profit, it would mean less tax and fewer schools and hospitals, but if that is what you want, fine - but on the other hand if that that happens you are not going to clean up the planet more quickly because it is all going to go to countries that will say, "I am not going to follow your example anyway". The biggest polluter on earth is 3,000 miles west of here and he is not signing up to Kyoto. That is not British business's fault. Chairman: No; we accept that. There is no argument about that. Q464 Mr McWilliam: You might have been in danger of inadvertently not being entirely clear because I do not think you wanted to name names. Supposing 100,000 call-centre jobs go to India, which is one of the countries that really ought to start, as you rightly said at the beginning, sorting out its act in terms of environmental pollution. Are you claiming that that is a net disbenefit in terms of the world environment? Sir Digby Jones: And you specifically said call-centre jobs? Q465 Mr McWilliam: I just said call-centre jobs because they are the ones that are going abroad. Sir Digby Jones: That is not true. The whole question of the jobs that go to other economies is not just an environmental issue, of course it is not. I would say that, unlike France, unlike Germany, unlike America, you do not see the protectionist siren calls from business or unions or politicians or journalists in the same way as you do there. Why? Because we have got virtually no unemployment and we have got a skill shortage, so if you can put more energy from business and more money into training people into better skills and then put more value-added work in there, the job that migrates actually produces more wealth for the country, not less, because we have not got enough people with skills. It also has the double effect of helping the developing nation get richer. Offshoring and outsourcing generally are not something you will find the United Kingdom - and I say this with great pride - in any of our different walks of life criticising and being protectionist about like other countries. If it is a call-centre job the potential for environmental damage is going to be less by definition. There might be some but it is going to be less than if you move a manufacturing capability to the Pearl River delta in China, for instance. Would I say that moving a manufacturing job out of Sweden, Germany, Britain into China would be worse for the planet in the short term environmentally? Yes, I would. I am being serious. I was in India last week. I went to see factories round Delhi, I was in China just before Christmas, I was in factories in Zhanjiang. They are clean, you could eat your lunch off the floor. They are environmentally doing their bit. The good ones are very good, but of course if you go a thousand miles inland in China it is a completely different story. Therefore, at this moment that migration is going to be environmentally damaging to the planet, not the other way round. Would that be the same if we could get China, India, Indonesia, Vietnam, Brazil and all the other countries to adopt the same regimes as the European Union? No, it would not, but if it was a call-centre job, as you call it, and I know what you mean by that, a people-based job, I would say that the environmental impact would be neutral. Q466 Mr McWilliam: That is what I thought you meant but you did not quite say it. Sir Digby Jones: No; you are quite right. Q467 Chairman: Where we have got to so far in this conversation is that you accept that climate change is one of the biggest threats facing mankind. Sir Digby Jones: Yes. Q468 Chairman: You accept that in the developed world, and that includes the United Kingdom, we need to reduce our carbon emissions by 60-80 per cent by 2050 if we are to play a proper and responsible part in dealing with the threat to climate change, and let us remind ourselves that it could be utterly catastrophic, but the message I am getting is that if the price of doing that is the loss of traditional jobs in the United Kingdom you are not going to do anything about it? Sir Digby Jones: Oh, no, no, no. Do not put those words in my mouth, Chairman. You said, "If the price of doing that is the loss of traditional jobs ..." - that is not true at all. We can as a nation progress towards that target in ways (and I want to concentrate on one in a minute) where we can make that progression, so it is not a black and white issue; it is not an all-or-nothing issue, and we can get there. What I am saying (and where you can happily put words in my mouth) is that on that journey please do not, for the purposes of our kids who want a school and a hospital, stop the wealth creation. It is as blunt as that because if you stop the wealth creation you stop the tax and you stop the public spending. For the good of that and for the benefit of the planning, because you do not want it all to migrate to other countries that are not so strict, please do it in a way that does not render it illusory at the end of the day. That is not the same as saying that I do not want to get there, because I do just the same as you. I perhaps would do it by taking more countries with me at the same time. Q469 Chairman: I had not been going to raise the question of your quote from exactly a year ago about sacrificing British jobs on the altar of green credentials, but the use of the word "credentials" in that is quite interesting, is it not, because we are not really talking about credentials. We are talking about potentially the future of the planet and humanity's ability to exist. If I were to change your quote to "not sacrificing British jobs on the altar of the future of the earth", would it still hold good as far as you are concerned? Sir Digby Jones: Probably not, because one of the problems with this issue is that many people do see business placings as very much black and white, very much that they are on the right side or the wrong side, very green or not green, and life is not like that. I can point to many businesses in Britain that statistically and emotionally have over-achieved, are completely on the right side, and I can point to some which frankly could do an awful lot more. Britain itself has changed fundamentally in its attitudes in the last five years. Certainly in the five years since I have done this job and I have also seen an attitude in business and I have seen an attitude in the media. "Green credentials", my remark of a year ago, by which I certainly stand today, I do not want to see playing to a degree of political correctness, playing to a politically vibrant and exercised time before a general election when people are desperate to try to show that they are green by forcing British companies abroad. That is what I mean by "credentials". When you just said, "For the future of the planet" I could probably find far more common ground with you. In that respect we are then talking about those jobs that Mr McWilliam referred to going out over a period of time, supplemented by other value-added jobs probably with businesses which are far more environmentally friendly, and at the same time, with America setting the example and pressure being brought on the Indias and Chinas of this world, where those jobs were going to were more environmentally friendly environments, fine. If that meant that UK jobs had to go, then I would be with you. I would settle for the change in that text but not in the first one. Do you want to say anything, Michael? Mr Roberts: I was going to suggest where the change would be difficult would be in the context of recognising that the UK's contribution to the global problem is small. We contribute of the order of two to three per cent of the global carbon emission total. Therefore, we could commit to unilateral action of a very significant amount and yet have a marginal impact upon the problem unless, of course, others are coming alongside with us. I think where the argument crystallises is the extent to which the UK shows leadership, not whether it should. That I think comes down to the stretch of any domestic aspirations to reduce carbon compared with what else goes on in the rest of the world and also the policy mix by which government seeks to achieve that reduce that reduction. I think that is where you get the two things coming together: an acknowledgement that we need to show leadership but a concern about how we best achieve that. Sir Digby Jones: Can I put that into context? We are just over two per cent of global greenhouse gas emissions, we are three and a half per cent of world GDP in manufacturing and energy production and we are just over five per cent of world GDP, full stop. So, if we deliver five per cent of the world GDP, just over three of the things that really do deliver the carbon into the atmosphere, and only contribute out of that two per cent of the world's emissions, I would say to you that we are certainly not doing enough but we are doing a lot more than a hell of a lot more countries. Q470 Mr Challen: Which British companies have relocated abroad purely as a consequence of environmental pressures? Sir Digby Jones: In terms of they have left somewhere where there is a strict environmental regime and cleared off to a place where they can pollute, I would say nil. I can tell you of a company that I got involved in about four years ago representing their interests where they had a factory company in France and a factory in Britain. They wanted to close one and they chose to close the British one because of the Climate Change Levy, because they did not have it in France and they had it in Britain and they were going to pay more money if they stayed in Britain, and I do not think climate change was ever brought in to cause unemployment in Britain. Q471 Mr Challen: They chose to blame it on that as opposed to possibly other reasons? That was exclusively the reason? Sir Digby Jones: Yes, that was exclusively the reason why. I understand where you are getting and yes, I did explore that, because often they can wrap it up in something else; I fully understand that. Nevertheless I did explore it and that was the reason. It was purely and simply the cost of the Climate Change Levy. Your real question was, because they were going to close one anyway, did the company leave Britain and clear off somewhere else so that they could pollute? The answer is categorically no. Q472 Mr Challen: I am quite interested in the environmental balance sheet, in terms of how many jobs can be created in this country because we are taking a leading role in tackling climate change and creating new technologies and so on? Sir Digby Jones: I said to the Chairman in one of my previous answers that I would like to come back to one thing and that was your point here on investment in science and technology as a way of dealing with this issue alongside limiting emissions and creating a trading scheme and fiscal remedies as well. One thing we as a nation should do this year - and I will ensure that the CBI plays its full part in this - is that if we constantly put America's back up against the wall on not signing up to Kyoto as the European Union we are going to fail. They have made it very clear that they are not going to sign it and we really ought to find another way of getting them to come to the party. I had a very interesting visit there just before Christmas when I explored this with quite a few representatives from New England and from the West Coast, where indeed you have some Republican governors; this is not party-political in that respect. They are investing enormously in science and technology to try to get there another way rather than the Kyoto way. If, during this year of Britain's chairmanship of the G8, we could encourage America to come to the party by not only doing it in their own country but helping other countries in the investment in different ways of approaching this problem rather than just using the blunt (I think necessary but nevertheless blunt) instrument of Kyoto, that would be an advance. We do not want to get to the end of December and find that all America has done in the year is say, "No, no, no, no and no". If, instead of that, we could get them to do more of it domestically and pump resource into other countries for them to do it, would that not be an advance? Where we can create a win-win out of this is, first, our own investment in science and technology ought to be increased in the whole area of limiting carbon emissions and, secondly, we are very good traders; as a nation we are pretty good at it. The Emissions Trading Scheme is another trading environment. We can bring our expertise, both in financial services and in trading generally, into this area and create wealth and employment out of the system but we need two things if we are going to pull this off in that regard. By the way, I do not say that as an alternative to Kyoto at all. I think Kyoto is necessary - a bit blunt but very necessary. However, America has set its face against that so we have to do something. What we need in this country if we are going to push those two points forward is more skilled people than we have just generally. The nation needs to get more skill. Secondly, we need more funding both from private and public sector into science and technology to make this happen. Am I with you? Yes, but there are a few hurdles to get over along the way. Q473 Mr Challen: When you say that Kyoto is a blunt instrument, do you mean it is too demanding? Sir Digby Jones: No. I think it is an eventual goal. It is a bit like the first conversation we had. I think the eventual goal is not too demanding. Of course, it depends what you define as "too demanding". I personally do not think it is too demanding. Q474 Mr Challen: Having strict national targets. Sir Digby Jones: Could the way that we get there, the speed at which we get there, be too demanding in certain sectors at certain times in certain countries? Yes, but that is for a national government to decide and the European Commission to decide. That is not for Kyoto. Do I think it is too demanding? I think the world needs it. Q475 Mr Challen: You have a clear view of how to deal with America and I think everybody has got a clear view on that subject, but George Bush, even if we accept that he accepts that global warming is taking place, has set his face against having firm national targets, against a great deal of what Europe is doing. He thinks it is a deliberate attempt to undermine the American economy and indeed, as you have said, has pledged to increase the spend on R&D and technology. Would you say that that is the better approach rather than having firm, strict, targeted political frameworks which provide the overall context in which industry has to address the issue or is it simply going to government saying, "Give us some money for R&D and we will sort it out for you"? Sir Digby Jones: No. What gets measured gets done. Q476 Mr Challen: So there should be a strict international treaty for determining national targets which we can see panning out into the future? Sir Digby Jones: Yes. Should there be that? Yes, there should, but I am trying to live in the real world where we have the President of the United States saying that he is not going to do it. I do not really want to be sitting here in a year's time, our chairmanship of the G8 gone, everybody saying, "Oh, well, we made loads and loads of speeches - the Director-General of the CBI, the Prime Minister of Britain, and everybody else saying, "This is dreadful. America, sort your act out". Frankly, if they are not going to, they are not going to. Q477 Mr Challen: Not even if they are demonstrably wrong? Sir Digby Jones: Clearly not. I wish they would set targets and I wish they would sign up, but they are not going to. What we need to do is work with them to get them to use what they will do, and they have clearly said they will put big resource into science and technology to try and get there another way. Where you and I agree is, what do we mean by "get there", because unless you have targets they will meet, and you have a path and a route map (if I may use the expression) to get there, how do we know if they have got there? I would say yes, there ought to be internationally agreed targets so that we can judge them on them. If they have set their face against getting there one way let us help them get there another way. Q478 Mr Challen: But if they intend to get there simply by investing in R&D that does not necessarily give us a clear indication of meeting the urgent need to reduce carbon emissions. Sir Digby Jones: I agree with you. Q479 Mr Challen: I think that is a very open-ended agreement, so we need strict, clear, well-defined, manageable targets. Do you agree with that? Sir Digby Jones: I totally agree, but I am afraid that in a year's time we will still totally agree and they will still not do it. I am trying to think of a way in which we can be more constructive during our chairmanship of the G8. Q480 Mr Challen: Should their own position be allowed to undermine our position? Sir Digby Jones: We have a commitment to a target so to that extent the principle holds despite their not coming on board. Mr Roberts: Can I add something to Sir Digby's comments? In an ideal world firm commitments to do something which should be monitored is the optimum way forward in many respects, particularly the science about carbon concentrations in the atmosphere and the consequences of that. Where the intelligent debate is starting to focus is on how we establish those commitments, how we establish targets. There is a sense that the process by which Kyoto led to commitment in targets was that was not amenable to the American way of thinking. It does not mean that targets per se will not work; it is just the way in which they are established. It may be that in the short term there is an imperfect way that needs to be pursued. Imperfect as they are, maybe relative rather than absolute targets are something to be thinking about, the way in which we get the Americans to think about producing a serious approach. There might be a way forward through international sectoral targets. There are one or two sectors I can think of, aluminium, for example, which is a global industry where there is some thought being given to that which might embrace individual sectors and corporate players within the American economy. The other thing to think about is to build on those things which are happening below the national US level, the things that Digby mentioned that are already happening at federal level. We have a system of north-east emissions trading in the United States which embraces both Democrat and Republican states and I think the more we can try and build on those so that the concept of a commitment, however it is delivered against, becomes more acceptable to not only business but also to society within the US. There are different ways of skinning the cat and we need to think imaginatively about that. Q481 Mr Challen: In that context we have got all these different initiatives about climate change. We have got things happening in Europe, obviously, and other voluntary, flexible arrangements and perhaps we can all approve of those. Should there not be some overall framework in which these things are cast because some people are very cynical about emissions trading schemes that give taxpayers' money hand over fist to industry so that they can just pick a few low-hanging fruits, which they are going to pick anyway. That is the windfall profit; that is going on later in this session. Would you agree perhaps with Contraction and Convergence which sets a reducing cap each year and distributes carbon emissions on a per capita basis? Would you agree that that provides the overall framework in which we should operate? Sir Digby Jones: There are two points. One is that I cannot let you say that on the record without refuting it, and that is that I do not believe that taxpayers' money is going straight into what you call industry and I call business ----- Q482 Chairman: We are going to explore this in a few minutes. Sir Digby Jones: ----- so I disagree with your statement. The second point, do I think we need that more global but transparent system of easily earned and distant targets? Yes, I do. You asked me in one of your earlier questions did I think that the current American stance undermines the European position. I am a little bit more worried about whether the participation of certain European states undermines the European position. One of my worries, which I said a year ago in that press release - and again I stand by it today - is that if you were a business in Sweden or Germany or Britain today I think you would be forgiven for worrying about your competitiveness and therefore your ability to employ people, earn money, pay tax and build schools and hospitals, when you see the behaviour of some other countries in Europe who have either just paid lip service to what the Commission is trying to achieve and, frankly, by their conduct have shown that they do not intend to do it, or put in a national action plan which, at the end of the day, was clearly something which was going to achieve no change whatsoever. A British business or a German business would say, "Why should we be busting a gut here when in the European Union itself other member governments and member businesses are not?". I think that is as important in the undermining issue, because I think I agree with you in that, as the American position. I sat in Beijing in October, I sat in Delhi last week. At eleven o'clock in the morning the sky is nearly yellow, your eyes are watering, your chest gets congested. That is only going to get worse. How are we going to clean up that act? If the European Union, Japan and America do not set the example - again, real politics - they will not. The only way is a globally recognised, clearly understood what that what measured gets done. I am agreeing with your overall wish, yes. Q483 Mr Challen: In terms of the UK economy, your deputy has said recently that industry has taken its fair share of this burden of dealing with the environment and that the domestic sector ought to now do more. Do you agree with that statement? Sir Digby Jones: Yes. Q484 Mr Challen: Have you considered what the domestic sector ought to do to fulfil that objective? Sir Digby Jones: I have been in this job for five years and what has been noticeably absent is hard, strict governmental pressure on the average voter to step up to the plate on this whole issue. Business is a very easy target. One reason is because, yes, we are very visible in the way we pollute and, secondly, we do pollute, so we are a worthwhile target and we certainly ought to accept that, so we are not trying to avoid our obligations but we are allowed, I think, to be frustrated. A statistic I was told a couple of years ago is if you take four semi‑detached houses in the average housing estate in Britain and look at their back yards and if you put a motor mower down those four lawns on one Sunday afternoon you will pollute the environment more than a Ford Focus in 12,000 miles. Ford get hammered every day as a manufacturer in Britain for being a polluter and the thing they make they are told pollutes the environment. Do we see any government action to go and do something about four people who might vote Liberal, Tory or Labour? No, we do not. Q485 Chairman: Is the answer not to hammer the manufacturers of motor mowers? Sir Digby Jones: If you are going to let the market do it, then of course what you do is ensure that the motor mowers become less attractive and the other ways of mowing your lawn become more attractive. I understand that. However, at some point somebody has got to look the voter in the face and say, "This is going to cost you in a change in your behaviour and your cheque book," and until they do we will not stop saying that business has shouldered its share of the burden and it is time the government of any colour acknowledged that. I would love to see three manifestos dealing with this saying to the people whose vote they are looking for "it is going to cost you too". Q486 Joan Walley: What about the cost to the environment? Sir Digby Jones: What about the cost to the environment? Q487 Joan Walley: In that line-up you have just drawn up you have not included the cost to the environment of not taking action. Sir Digby Jones: I agree, I am sorry, I thought that was a given, yes, completely right. Q488 Mrs Clark: I am very enthused by what Sir Digby has just said about the individual and the domestic situation and pollution. He may or may not be aware that our Committee has been doing some considerable research into environmental crime and into the responsibilities of local authorities and individuals, et cetera. Indeed, we did have a debate on this in Westminster Hall only last week as I recall. Would he like to comment now on what he actually thinks central government should do in terms of local authorities? You have talked about the concentration (and I would agree with you) on making business a scapegoat instead of local authorities and what their responsibilities should be. Indeed, would you agree with me that a) perhaps central government should impose some financial penalties on local authorities who do not actually come up to stump on these matters, and b) John Major's Environment City Status Award was absolutely excellent but that in fact there has been no attempt to police this and ensure that those cities, including my own of Peterborough who were given that award, go through their paces and come up with it or have it withdrawn? Sir Digby Jones: The answer to the first point is I would sincerely like to see ‑ and I do not see a lot of this at the moment ‑ over the next few years increasingly government seeing public sector and private sector employers as very much the same and not different in the way they behave environmentally, the way they employ, the way they skill, the way they participate in society because the public sector has become a huge employer in Britain and a big operator of many businesses and for some reason they tend to get treated differently. The public see them differently, politicians see them differently, they see themselves differently, and at the end of the day the private sector are often put into a position where they compete with them. They often see what they do not being duplicated there and it is high time that the public sector did not see themselves as special and they saw themselves as very much part of the overall ambition, which I thought was to make this country great. On your second point about one of John Major's initiatives, the honest answer to you is I do not know enough about the facts to comment, I do not know enough about it and I do not comment on things I do not know. I will look at it for you and I will write to you individually and tell you what I think, I could not do it now simply because I do not know the facts. Mrs Clark: Very helpful. Q489 Mr Challen: You have said that you support the principle of contraction and convergence and in the domestic sector the need for individuals to do a lot more. Has the CBI come across the proposal for domestic tradable quotas and have you had a chance to evaluate that at all? Mr Roberts: Just a point of clarification, we did not say we agreed with the principle of contraction and convergence. We agreed with the principle of commitments to real action and that those should be international. The debate about contraction and convergence is one that we are still having with our membership. That is just for clarity's sake although I understand the rationale behind it. With regard to the issue of quotas for the domestic sector, again that is one of the things that we are looking at at the moment in terms of our response to the current review of the Climate Change Programme to see whether that is something that might have legs. Clearly it is a reasonably radical proposition and whilst trading may well be suitable for certain parts of the corporate community who have the resources to engage in trading, there is a question mark as to whether individual member of the public would find it such an easy proposition when one wades through brokers and the like. It is not something on which we have a clear view at the moment but it is one of those issues we are looking at in terms of how you might unlock the contribution from that sector of the economy. Q490 Mr Challen: The financial analysts and carbon traders have told us in previous evidence sessions that they would prefer absolute caps and targets and those are essential if emissions trading is to work effectively. Would you agree with that? Sir Digby Jones: I for one would agree with more certainty. I think caps and targets give that certainty and give that transparency. Everybody understands where this whole thing is trying to get to and when you can judge progress. Things that tend to be certain and easily understood have a better chance of winning. So for that purpose, yes, I would. Q491 Mr Challen: How does that sit with flexibility? Sir Digby Jones: I was going to say "but I will let my expert comment on that"! Mr Roberts: The flexibility is in how you achieve those. The prescription is not about the method; the prescription is about the end outcome. Q492 Mr Challen: A 60 per cent reduction by 2050, which has been quite controversial in the last few days in European discussions taking place, does suggest having to have some rather strict ways of dealing with it. It does not affect the community but that is nevertheless a strict target. How much flexibility does having a strict target allow you to interpret these things in a way that perhaps the Americans would like to do but we Europeans seem less inclined to do? Mr Roberts: The flexibility is in how you get towards that target and it is an ambition towards ‑‑‑ Q493 Mr Challen: Can you give me an example of flexibility? If we have a strict and demanding target how do we have flexibility? I cannot quite square the circle. Mr Roberts: The target is the outcome, it is the goal. The goal could be achieved through a variety of means. If government is trying to establish how you get to that goal government has at its disposal a number of policy levers, if you like, whether that be classical tax or straightforward regulation or encouragement of voluntary initiatives or some mix of all of those, and that is where the flexibility comes into play. What is particularly important about this debate at the moment is that five years ago the UK committed to a programme of activity that would take it towards its current set of targets. That included a mix of those types of instruments. What was lacking in that programme was a clear sense of the benefits and costs associated with the mix and indeed with individual measures so there was no sense either on the part of the UK as a whole or on business specifically as a major player in that programme as to whether or not we had identified the least cost way of achieving our 12.5 per cent reduction on Kyoto or indeed our transition towards the 20 per cent target. This time round we need to learn that lesson because some measures will be more cost effective than others. That is what I mean by flexibility towards an agreed outcome. Having said all of that, you need to be clear that your outcome is properly specified. The 60 per cent target that everyone talks about, ideally speaking, should be a 60 per cent reduction in global emissions to reduce the concentration of carbon to scientifically what is deemed to be a reasonable level to address the issue of climate change. If that then translates into "the UK will do that but no‑one else will do it because that is the way politically things turn out in the future", we go back to our original concern which is we will have done a lot in this country, potentially at some significant cost to individual parts of the economy, but it will only have a marginal impact on the global problem. Q494 Chairman: Just for the record I think Sir David King is now talking in terms of an 80 per cent reduction by 2050 to take account of the accelerating melting going on on the Greenland ice cap. Mr Roberts: I appreciate that the science is changing and we need to be alive to that. Q495 Chairman: It is not getting better. Mr Roberts: But the fundamental point remains about shared effort globally and flexibility in delivering our bit towards that shared effort. Q496 Joan Walley: Can I apologise for not being here at the very start of the session this afternoon and missing some of the earlier questions. I want to try and wrap up this discussion we are having about post Kyoto. It seems to me that there are so many possible variations but from what you have just said to Mr Challen what you really seem to be saying is that, yes, Kyoto is there and that would give the certainty and that would give the firm signals to all the sectors to know what they had to do and to get on and do it, but if we are in the real world, we might not get (as we have not at the moment) the US and everybody signed up to it, therefore this flexibility needs to be somehow or other kept as a reserve to try and push us through this transitional phase to where we need to be to meet these ever greater targets. I am not quite sure whether you are saying in an ideal world Kyoto, yes, but we are not in the ideal world so we will just get the best that we can and the best that we can go at this moment at this place in time. Are you therefore saying that relative targets have got an important part to play? Sir Digby Jones: Just because America will not sign Kyoto does not mean we should not pursue, prosecute, and get to the Kyoto targets. I do not think that the European Union should duck out of its responsibilities to the planet. I do not think business should either if they operate there. I often have big arguments with politicians in America who, as the Chairman said just now some, see Europe as saying business in Europe is going to have to adopt these Kyoto targets as a barrier to entry. That is wrong. It is Europe trying to lead and set an example. And I repeat what I said earlier, I am proud of that. Because I advocate a different way of trying to deal with America trying to "get there". I am just accepting the realpolitik of life. What I am not doing is saying because of that we should all stop doing it. What I would say ‑ and I sincerely hope this is a non‑party political issue in Britain ‑ is that if the United Kingdom has signed up to it and the European Union has signed up to it then please explain to me why we all allow some Member States of the European Union, frankly, not to come to the party to the same extent and not to be rigorous in their implementation in businesses in other parts of Europe. Worrying about America is bad enough; worrying about someone in your own backyard is even worse. Q497 Joan Walley: We want to look at the European trading scheme in a short moment but before we get there can I try and home in on this relative target business because it seems to us that the way that those have been looked at is akin to 'business as usual' and if it is business as usual then you have not got any kind of cap and then you are not getting the environmental benefits that you are aiming to get in the first place. Sir Digby Jones: Just so I understand your comment, are you saying you think the amendment by the Government was working on the basis of it is now business as usual? Q498 Joan Walley: No, I am not saying that. I am saying were you to go down the route of we cannot get the ideal progress therefore the relative target could be an option; that is based on business as usual targets. If we have got business as usual targets we have not got progress. Sir Digby Jones: I see what you are saying. Mr Roberts: Let me try and clarify what we said earlier about relative targets. I was not suggesting that the UK should shift from what is currently a commitment to an absolute towards a relative target. What I was suggesting was that the history of establishing international commitments through targets was not successful in getting the US at national level to commit on the international scene in the same way that some other developed countries did and that we in the international community with the UK playing a leading role in that have got to think a little bit more imaginatively and perhaps accept that there might be some second best ways in which we get the US to commit. There are a variety of options around target‑setting, one of which (but not the only one of which) might be some process of establishing the commitment of the US to a relative target. I did accept that that was an imperfect way forward but not the only way forward. Q499 Joan Walley: That is very helpful and clarifies it, thank you. Can I just pursue that a bit further in trying to get the US on board as well. When we had a session last week we had Barclays Capital giving evidence to us and one of the options that they defined for us was that if an international trading system is set up by a core of developed and developing countries but not everybody was on board with it, then some form of tariff might be levied on trade with non‑participating countries. How would you respond to that? Sir Digby Jones: I know the stenographer cannot write down my reaction, Q500 Joan Walley: She can, she is very skilled at this. Sir Digby Jones: When I hear words like "tariff" and "restraints on trade", I have the vapours. If what you mean by that and what they mean by that is that some of the major trading nations in the world create that international trading scheme and get on with it and share its success, I would like to think that a country as commercially active as the United States (which I think is probably where you are trying to lead to) would think this is something they should be engaged in. Where you take that is you would not find the USA then comes to it quickly but you might find California does or you might find Massachusetts does or Illinois does and at some stage you might find by default almost that America is taking part. So would I encourage the setting up of that as an international scheme immediately following with your ideas of then the targets are easily understood, the answer is yes. Would I penalise a country with some form of trade restriction, be it tariff or blanket exclusion, categorically and certainly I would not. Three reasons: one, I do not think you would get it past the WTO anyway; two, if you did you would certainly find that it would be the thin end of the wedge and people with different intentions and rather sinister intentions would start to use it as a way of stopping what we are trying to achieve out of international trade which is fewer tariffs and fewer subsidies; three, the law of unintended consequences would apply big time and the people you would hurt most would be the people in the developing world where they would automatically fall foul of it and you would be back 15 or 20 years in trying to ensure that a multilateral, rule‑based system of international trade can facilitate the poor getting richer. Q501 Joan Walley: That said, how much do you think the Government's approach through 2005 should be aimed at making sure that the US does come on board? Sir Digby Jones: On board? Q502 Joan Walley: To get the US to sign up to the Kyoto targets? Sir Digby Jones: Next Wednesday in Davos I think the Prime Minister is making a speech on climate change as Chairman of the G8. You probably know what he is going to say; I do not, but I would urge him to a) set out the perils of America not signing Kyoto, especially the example setting point, b) to acknowledge that we live in a real world and at the end of the day understand that if at a national level the administration of America has said they are not going to then c) to really encourage separate states in America (the federal issue in America) and the European Union with their relationships with America, especially in this globalised economy of multi‑national companies who operate all over. They can be a tremendous force for good. I know that political correctness says that multi‑national companies are all up to no good but they can be fabulous conduits to improvement in this planet, if we get it right, to say let us move America towards where we are trying to go, facilitating their ability to put huge resource into investment, technology and science to try and get there. I would love to hear him say that next week. In other words, do not take the pressure off on Kyoto, make the world understand that America is not playing the game but on the other hand acknowledge the reality of the matter and stand up and be counted and say, "We will help you, America, get there in another way." Q503 Joan Walley: One of those other route maps for getting there might be for each and every individual state to communicate through whatever business or opportunities there are with stakeholders in Europe, stakeholders in individual states or on a sub-business level? Sir Digby Jones: Yes, definitely. I was really heartened when I went in December and I talked to some of these state politicians because they really were up for it. They understood the issue and they were not going to take it from Washington, they were going to get on with it themselves on the west and east coast. It was very heartening because we sit there sometimes thinking from a competitiveness point of view we have got this enormous economy over there that is not going to play the same game and yet we are trying to compete in that world. I repeat we have got some nations in the European Union which do the same. It was quite heartening to see that some of those states want to come to the party in any way. I really do think that our chairmanship of the G8 can be used as a force for good to get America at the end of the day to advance the reality of the matter not just the argument but if all we do is bang on about them not signing up to Kyoto we will be here in a year's time and we will have lost the opportunity because they are not going to do it. Mr Roberts: Another dimension of using the right approach and thinking cleverly about what is going to unlock interest within Washington relates to perhaps thinking about other ways of expressing the problem rather than simply being an environmental problem, which it undoubtedly is, and moving away from language which says you are the largest polluter in the world, which undoubtedly they are, and trying to press other buttons. There are for example security of supply issues over the long term in being a fossil‑fuel based economy. The present situation where the international climate has a higher degree of uncertainty than in the recent past. That sort of language might be a more imaginative way of unlocking engagement from the American political establishment. Q504 Joan Walley: Environmental technology being good for business as well. Mr Roberts: That being the other side of the coin. Potentially if we get the right approach in place there are economic wins. It is a $500 billion market for environmental goods and services and it is growing at a significant rate. That is wider than services and goods in climate change but that is part of the mix, so there are opportunities, and that is a global market. Q505 Joan Walley: Are we going to be looking forward to you appearing on the Ruby Wax Show waxing lyrically about different ways of dealing with this problem? Sir Digby Jones: I do not know about Ruby Wax and whether she invites me but I am known as being a critic of the American protectionist attitude to trade and business and investment. I am known as quite publicly saying I think it is very wrong that America will not sign Kyoto because of the leadership role they wish to take in the world. Leaders have to set examples and they should. I also will use the opportunity (and you can look forward to it) to appeal to Americans to say even if you will not and you have an administration that will not, there are other ways you can get there and you have, unlike many countries on earth, the resource to do it in both money and manpower. Q506 Chairman: Do you think there is a possibility that we might in the end have no successor agreement to Kyoto? It does not have to be a long answer. Do you think that possibility exists? Sir Digby Jones: The facile answer is of course it exists because there is not one now so it could fall off. If what you are saying is has this achieved sufficient chatter noise on the radar that public opinion in certain parts of the world will not allow it not to have a successor agreement, I think I take the optimistic view that there will be one. Q507 Paul Flynn: Those countries that have been leaders in investing in environmental protection and gearing up their industries do not seem to have lost any competitive advantage and there may well be a benefit in this and those countries, to use your language, that are not coming to the party might find themselves losing out on their share of the jelly. Sir Digby Jones: If you talk country‑by‑country - and shall we discount China and India from this issue? Q508 Paul Flynn: I would like you to identify those Europeans countries that you think are going to be absent from the party. Sir Digby Jones: I am sure you would! If you mean those non‑behaving countries in the European Union, I think as countries you are right ‑ I am agreeing with you. Where I think you are wrong is if you look at sectors. I will give you a very good example. We cannot carry on without the Commission, without the Council of Ministers, without Member States putting the pressure big time on certain countries that are choosing an easier path. It is no good saying "we have signed up to it." The Chairman said at the start of this afternoon it is easy to be rhetoric; it is whether you do it. You will find certain industries leave countries. It is not beyond the realms of possibility that within a few years people will say a certain country does not have a steel industry any more, a certain country does not have a ship-building industry any more, a certain country does not have a car‑making industry any more. I do not mean Britain, it could be any country. One of the contributing factors might be it is because other competing countries were not making it as difficult to do business from an environmental point of view. I am not saying that is right or wrong. Do not shoot the messenger. I am merely telling you that could be a contributory factor. The country as a whole might still be doing okay but there will be lots of people who are out of the job they were doing because of it. Q509 Paul Flynn: Possibly in better jobs or jobs with a future? Sir Digby Jones: Sure. Q510 Paul Flynn: My difficulty is matching up what you are saying now to what you have been doing throughout the year in trying to push the Government into increasing the size of the UK emissions gap. It was not a very ambitious one. It was designed to have a business as usual approach, it was not very demanding to industry but it has been raised and you have tried to raise it again. It is the race to the bottom argument. You have taken the line if they are not doing it we should not be doing it either. The competition becomes who can do the least which is going to be very damaging. Sir Digby Jones: Before I answer that in detail (and Michael will join me in this) can I just ask you, do you think it is the job of the government domestically to cause huge loss of production and mass unemployment through prosecution of extremely strict environmental rules and regulations? Q511 Paul Flynn: The job of the government is to save the planet initially. Sir Digby Jones: Even if that is sacrificed? Q512 Paul Flynn: That is all governments and using our influence to persuade them. Sir Digby Jones: That is not answering my question. Q513 Paul Flynn: In doing that there might well be some pain in that but the ultimate aim must be there. Clearly the government should not have that as an aim but you have a touching faith in our influence with the Prime Minister. I am sure we would all like to pass on the message that you gave to him but I believe he has said it already and you are pushing against an open door on that point. I represent and many of us do here a constituency where my steel industry has been cut in half. It was very painful and now the steel industry very prosperous because those jobs have been left, not for environmental reasons. You also talked about the Climate Change Levy. What is the firm that has ended up in France? Sir Digby Jones: I am not going tell you the name of the firm but they were very big users of energy. Q514 Paul Flynn: In what area, in steel? Sir Digby Jones: No, not in steel, in manufacturing. You used the words the "race to the bottom" and I do not recognise that. That is not the philosophy behind the CBI's lobbying and what we are for is a race to the top. All I am asking is do it in a way that retains our competitiveness and getting there in a way in which the jobs will change, of course they will change, but perhaps a little more slowly than your touching faith in your own electorate saying it can happen. Q515 Paul Flynn: There was a story in the paper last week that the UK might take legal action against the Commission if it does not approve the United Kingdom National Allocation Plan. This something of which you would approve? You have been lobbying for it. Mr Roberts: That has not been our position and if I might suggest your earlier depiction of our position is a travesty of what we have done. What we have been doing over the last year or two years is two things with regard to the UK's national allocation. Firstly, that it should be based on accurate data both about what has been and what might be on reasonable forecasts and, secondly, that other countries should apply a similar degree and a reasonable degree of stringency upon their industrial sectors as well. The very significant purpose of our lobbying has been on the latter. It has not been about watering down what the UK was attempting to commit. It was ensuring that the commitments that other countries were seeking to engage in were of a similar stringency taking into account their history. That has been what we have been seeking to do so and to that extent Digby is absolutely right; our job has not been about promoting a race to the bottom it has been promoting the opposite. Q516 Paul Flynn: But you have lobbied to raise the cap? Mr Roberts: No, we have lobbied to ensure that the Government uses accurate data. The Government late in the day ‑ and they have admitted this - at the time they submitted their revised application recognised that they had got their figures wrong and the reason they had got their figures wrong (on which they then made a commitment) was because sufficiently early they had not been taking to the right sectors in detail. As a result of them having the proper discussions at the right level with the right figures they realised they were in danger of signing up the UK to, in practice, a tougher commitment than they had previously realised and indeed a commitment not only tougher than the original but tougher than on the face of it appeared to be the case in other Member States. Q517 Paul Flynn: What should the Government do about the Phase 2 targets? Mr Roberts: There needs to be an early exercise in establishing the rules by which Phase 2 will operate. There is a fine balancing act to be conducted here between starting the discussions early so that companies which are going to start trading shortly, if they have not already started, they know what the rules of the game will be by the end of 2007. Equally, as far as is possible under that constraint of starting the discussion early, we need to know some of the lessons of how the trading system operates in its early days. Q518 Paul Flynn: As we have already met our Kyoto target do you think Britain should go further by basing its commitment upon the UK domestic 20 per cent carbon reduction targets. Mr Roberts: I think the judgment of whether that is the right approach depends on whether or not there is some good analysis about what the costs of that might be to sectors and to the economy as a whole. We are clearly on all available evidence going to do better than our Kyoto target so I think we are in the business of seeing what is it beyond Kyoto that we commit to. I think it is also useful to recognise that the Climate Change Agreements which have preceded the European Emissions Trading Scheme (by which industrial sectors commit to energy saving) are themselves already based on a desire to move the UK towards its 20 per cent target, so some parts of the business community, in other words industry, are already making that commitment despite the fact that some of their competitors in other parts of Europe are not making a similar explicit commitment. Sir Digby Jones: If an opinion poll was to stop somebody in the street and say, "Do you really believe that Britain should exceed the Kyoto targets and this is the benefit to the world and this is the benefit to Britain?" They will say yes. If you say, "Now what that would mean is specifically you would be unemployed; now do you believe in it ..." Q519 Chairman: We have heard a lot of this argument. I am sorry to interrupt but I think there is a degree of scare mongering ‑‑‑ Sir Digby Jones: Not in the slightest. Q520 Chairman: There is absolutely no evidence ‑ you yourself said there was no evidence ‑ of companies leaving Britain to go elsewhere. There is absolutely no evidence from the European Commission competitiveness report or the substantive documentation produced by WWF that the threat that you always come up with that if we do the right thing by the environment we are going to lose British jobs is true and there is plenty of evidence that it is extremely exaggerated. Sir Digby Jones: With respect, Chairman, you do not get round the members I get round and you do not talk to them in the way I talk to them, and frankly there is a very real threat. The competitiveness threat is alive and well. The thrust of what I was going to say was, and if only you had let me finish, if you then said to them, "It will cause you to lose your job" they will not say yes. I am not going to say they will say no. If you say to them, "But I will tell you what we will do, we will meet the box tick that you just said you want this cleaner world but we will meet it in a time‑frame that enables us to reskill you in a different job where frankly the job you are doing will not exist but you will be in employment in a different way," I reckon they would buy into that. What that needs is time and what you are suggesting, especially when the Chairman just spoke, is not giving us that time. Q521 Paul Flynn: I think their answer will depend on whether they spent the previous evening reading the Daily Mail or watching the programme on global dimming. Sir Digby Jones: You are probably right. Q522 Paul Flynn: I think there will be more people watching programmes like that than reading the Daily Mail, thank God. There is a possibility that we will also be selling some of our surplus credits because we get to the Kyoto target, as you agreed. Do you think that is a good idea? Mr Roberts: That we should sell our credits? Q523 Paul Flynn: Yes. Mr Roberts: Clearly in a market if we have something of value and other people are willing to buy it then the market should operate. Q524 Paul Flynn: The International Energy Agency said that the emission trading targets we have will make very little difference on international competitiveness. Is there not too much being made of this? They will be small, they will be manageable, but we do hear these complaints, and certainly they are coming to me, about the effects they are going to have. I think, as the Chairman says, they are very much exaggerated on what is a very modest programme. Mr Roberts: Let me suggest two answers to that. The first is that the impact on competitiveness depends upon assumptions about how the measures which are adopted are put in place. The concern that we have expressed is that if British companies for example under the trading scheme have commitments which are in excess of the stringency of the commitments of their competitors elsewhere in the trading scheme space, the implication is that they will have a higher cost to achieve that. Now, the extent to which that affects their competitiveness will also depend on a number of other factors. There will be a number of other pressures on business but one thing that we have noted in particular at the moment in the UK economy is that at that stage of the economic cycle (we are near the peak of the economic cycle) relative to similar periods in the last 20 years, the level of profitability in corporate Britain is low by historic standards, our margins are low, and in that context anything that adds to cost alongside other pressures on cost is viewed with sensitivity by the business community. That is not to say that lock, stock and barrel the whole of corporate Britain is going to go overseas but it is an added pressure and makes life more difficult to do business in this country. Our views as we have expressed them to the UK Government and to the Commission reflect that sensitivity and seek to say not that we should not be doing something but that we try and do that something in the most cost‑efficient way. It is very unfortunate that people (not necessarily in this room but outside) misread or mishear our concern about the design of particular environmental objectives on climate change with somehow suggesting that we are not up to doing something. I would hate to think that this Committee would make that misinterpretation as well. Q525 Paul Flynn: On Phase 2 would you be happy to see aviation and road transport included? Mr Roberts: We certainly think that there is a strong case to try and have aviation integrated in some way in Phase 2. We have been seeking to take that forward and there is an event we have on Monday which will bring together business and government both at EU and UK level to see how we can do that. Technically there is going to be a range of issues to take forward and I think the debate is about whether aviation becomes a fully integrated part of the ETS in Phase 2 or whether in some way it becomes linked to ETS but that is a technical discussion to follow; the principle I think is a strong one. Q526 Paul Flynn: Would the rest of business and industry agree with British Airways that any increase should be based on their future growth in aircraft traffic? Is that a sensible way of looking forward? Mr Roberts: I am not sure I understand the question. Q527 Paul Flynn: British Airways are saying that they want the emissions allocation for aviation based on its forecast growth. Is that something that you would agree with? If their business goes down or goes up should it vary or should they have a set line? Mr Roberts: Exactly how British Airways have approached it you would need to talk to them about but I think they are readily up for making a commitment to tackling their emissions over the longer term and they feel that emissions trading is the best way and most cost efficient way of delivering that at the end of the day for both British Airways and other players within the UK aviation community. The debate about the level of engagement is more broadly in the EU aviation community. Within the UK I think there is already acknowledgement that aviation will be a significant contributor to overall climate change emissions and that something needs to be done. The debate is about how best to achieve that and that is why I am sure trading is a way in which they can make their contribution. Q528 Mrs Clark: We understand and I think it is quite widely known that carbon trading analysts are very convinced that United Kingdom power generation is going to do rather well and in fact make substantial windfall profits in Phase 1 of the scheme. I would be interested to know whether you think it is going to happen and what you think the Government should do? Mr Roberts: First of all, I think the judgment about the impact on the generating sector will vary from generator to generator. It is not axiomatic that all generators will profit in some way. The extent to which there is an impact on their profitability would depend on their current generating mix. Some may have a more carbon intensive mix than others and therefore face a greater degree of change of behaviour to deliver against their targets. At the end of the day the other issue that is at stake here is the extent to which they feel able or feel it is consistent with their corporate policy to pass on any cost increases they might incur to consumers, whether that is industrial or domestic. I would not take it absolutely as read that they will be making a windfall of the sort that you mentioned. Q529 Mrs Clark: Obviously the jury is out on that one and we will have to wait and see. Have you been in discussions with the Government about this? Is this something you have gone into? Mr Roberts: On the impact on generators specifically? Q530 Mrs Clark: Yes. Mr Roberts: No. Q531 Mrs Clark: Do you think the Government should take action to ensure that if there are windfall profits ‑ and I understand you are a bit dubious about that ‑ are then redirected perhaps into low-carbon generation investment? Should it do that? Sir Digby Jones: The answer is wait and see, is it not, because a) we do not know if they will and b) we do not know how the companies will behave if they did. Governments of all parties at all times have had a pretty appalling record of suggesting where companies should invest their money. Chairman: On that note I think we had better conclude this part of our inquiry. I appreciate that you have been generous with your time already. Thank you for your evidence on climate change. |