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CORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 671-i House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE ENVIRONMENTAL AUDIT COMMITTEE
Tuesday 16 June 2009 MR SIMON RETALLACK, MS JENNIFER BIRD and MS KAYTE LAWTON MR PETER YOUNG and MR JOHN EDMONDS Evidence heard in Public Questions 1 - 67
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Environmental Audit Committee on Tuesday 16 June 2009 Members present Mr Tim Yeo, in the Chair Colin Challen Mark Lazarowicz Dr Desmond Turner Joan Walley ________________ Memorandum submitted by Institute for Public Policy Research (Ippr) (GJS10)
Examination of Witnesses
Witnesses: Mr Simon Retallack, Associate Director and Head of Climate Change, Ms Jennifer Bird, Climate Change Research Fellow, and Ms Kayte Lawton, Social Policy Researcher, Ippr, gave evidence. Q1 Chairman: Good morning. I am sorry you had to wait a bit but we had rather more private business than usual to deal with this morning. Welcome to the Committee. We are very glad that you have come in. This is the first of our evidence sessions on this inquiry on green jobs. We have read with interest the memorandum that you sent in. You set out requirements for offshore wind as to how that might be developed and promoted. Do you think that approach that you identify goes wider? Is that general approach also applicable to the whole broader issue of where green jobs can be created? Mr Retallack: It is a good question to start with because I wanted to establish the limits and scope of our ability to contribute to your hearing today. Both my colleagues to the left and right of me have contributed to the wider project that we are halfway through which is looking at green jobs potential in the UK as a whole across different sectors, especially energy efficiency and renewable heat, with my colleague, Kayte Lawton, specialising particularly in issues around the welfare system skills and the employment, specific nature of jobs issues, and my colleague, Jennifer Bird on my right, specialising particularly in the offshore wind sector. If you have got specific questions it is probably best that they answer those, but on the whole our view is that each sector has to be taken on its own merits.
When it comes to offshore wind we identified, as you will know from our brief, specific barriers that need to be overcome. It is likely, we think from our research so far, that we will encounter similar barriers that need to be addressed but not necessarily in every case. We identified three major areas of concern with offshore wind-firstly, the need to establish sufficient domestic demand in the first place with adequate targets and frameworks; secondly, the need to establish incentives for companies to invest and set up in the UK so that UK jobs can be created as opposed to simply importing the technology from overseas; and, thirdly, the need to establish a sufficient skills base in this country for particular aspects of the offshore wind business. Skills are not an issue for every aspect, that is important to underline, and it is also important to underline, with regard to other potential job growth areas when it comes to green jobs, that skills may not be a problem, for example, with energy efficiency. Q2 Chairman: We will certainly want to pursue both wind and skills in more detail presently, but just on this question, as you have mentioned offshore wind, the Budget obviously improved the incentives for a limited period to encourage some investment in offshore wind farms, but that does not in any way guarantee any jobs, or very few jobs, within Britain, so it is that sort of gap we are concerned about. Specifically, there has been already renewed investment interest in offshore wind as a result of the budget change, as I understand it, so the measures you are calling for are in addition to the incentive. Could you enlarge on that, what you think we should be doing, perhaps coupled with the extra incentive to invest in a wind farm? Ms Bird: We published our report[1] before the Budget so the recommendations were made before those announcements came out. In terms of the investment side, one of the things that we were keen to recommend in our report was that there is already a large number of programmes that provide support to the offshore wind and other renewable energy industries, and one of the things that people were telling us who work in the industry was that it is spread too thinly at the moment across too wide a number of programmes and so the recommendation was that they should be consolidated into a fund that is more clearly directed at areas like offshore wind and that would help to attract investment. Q3 Chairman: Has the Government reacted to your report? Have they responded to you at all? Mr Retallack: Not officially. Q4 Chairman: Is there a difficulty about the responsibility between central and regional government or is that not a problem? Mr Retallack: There is an aspect here that is absolutely relevant, you are right. We identify clearly a big role for national government to set the right frameworks and put the right incentives in place, but we need to be careful to engage beyond the regional level to the local level to ensure that the relevant players are involved, and also to identify where the specific local needs and barriers are that need to be overcome. Clearly, and Kayte can talk more to this, unemployment is a greater problem in certain parts of the country than in others and it would be sensible to develop a strategy around green jobs that recognises that and tries to ensure that employment opportunities can be created in these sectors in areas which need it, and that does require co-operation and engagement at the local level but at regional level too. Q5 Mark Lazarowicz: The term "green jobs" is one that is used pretty widely at the moment. How useful is it to have such a term or should we be more precise in what we mean by a "green job" and draw from that the appropriate conclusions for policy and initiatives? Mr Retallack: The term "green jobs" used to be used to define environmental industries such as pollution control, water management, waste management, et cetera, and clearly in recent times it has been expanded to include activities associated with the low carbon economy but it is very difficult to define exactly where the definition should start and end. Should it, for example, be extended to people that make and run buses or tube trains? Our approach has been one that says that it is impossible to define this term precisely and adequately. What we should be doing and what the Government should be doing with its Low Carbon Industrial Strategy is coming up with a strategy that ensures that every job is green. Ultimately, any job that is not green in the future should not be and probably will not be sustainable, and that means looking beyond the need to create new jobs in the low carbon sector to greening existing jobs in areas like the car sector where there is certainly the skills base and the knowledge to produce low carbon vehicles, and assisting existing sectors and industries that are likely to decline as a result of low carbon policies to make that transition in a fair way. Q6 Mark Lazarowicz: How well do you think it is recognised that many old jobs will have to go if we are going to move to a low carbon economy? My suspicion is that it is not recognised at all widely. How widely is it recognised within industry, for example, or even in government? Mr Retallack: That is a good question. I suspect that it is understood but whether it is readily publicly acknowledged is another question. There are obvious sectors that are probably more vulnerable than others, offshore oil and gas being a notable example, which is obviously going to decline for other reasons as well to do with supply in the North Sea. I think there is a valid point here, which is that there should be a greater focus on the need to help vulnerable sectors to make a just transition, I suppose, to a low carbon economy. Q7 Mark Lazarowicz: I realise it is very difficult to put any figures on this but what kind of balance are we talking about? If the right decisions are taken how many of the greener new jobs can be expected to be created and how many of the older, less green ones are we likely to see going? I know this is all very general, but at the end of the day if we are to hold a public debate these are the kinds of things we have to decide what to do about. Ms Bird: We have not done any kind of analysis that would put numbers like that on it. Q8 Mark Lazarowicz: Has anybody, that you are aware of? Ms Bird: The report that the Committee on Climate Change published in late 2008 does contain a section at the end which identifies industries which may be at risk due to carbon pricing and sets out that a policy will need to be developed to ensure that those industries are able to continue to operate. That is one example that I am aware of, but in terms of actual numbers I have not seen anything. Q9 Mark Lazarowicz: What kinds of industries, can you remind us, did the Committee on Climate Change identify as being particularly at risk? Ms Bird: The ones that were at risk due to carbon pricing in particular were iron and steel, aluminium, cement and lime at the top end because they are energy-intensive industries. Mr Retallack: Can I just add to that answer? Our general sense, if you are interested in weighing up the likely job creation versus job loss scale, is that whilst there are those sectors that are vulnerable, as Jenny mentioned, and they will affect individuals, the jobs in those sectors are relatively small. It does not mean we should not worry about them and identify strategies to help in those circumstances because they will affect very specific geographical communities, steel in South Wales, for example, but on the whole our sense is that there will be far greater numbers of jobs created by making this transition than jobs lost. Q10 Dr Turner: The Government has set out a vision for a Low Carbon Industrial Strategy but it has not spelt out any nuts and bolts as to how we get from a vision to an actuality, so what do you think the Government needs to do to turn this vision into a real Low Carbon Industrial Strategy on the ground? Ms Bird: To pick up on what Simon was saying earlier, we think that the Low Carbon Industrial Strategy needs to take a broader look, so not just focusing on where new jobs might be created but also thinking about existing jobs to ensure that they are protected and that we do not lose jobs in sectors that might be at risk. The strategy will need to contain elements setting out how the Government will support those industries in making the transition to become low carbon industries themselves, so we think that is an important element of the strategy. Mr Retallack: When it comes to creating new jobs, I suppose, in particular, we will be looking for more detail, hopefully, in the summer from the Government's Low Carbon Industrial Strategy on instilling greater confidence amongst the companies, which we would like to establish themselves here in the UK, that there will be sufficient demand, and part of that will mean, for example, ensuring that the Renewables Obligation and the changes with the banding which the Government have committed themselves to actually work, so monitoring that closely and, if they do not, as you will know, that further credits are being given to offshore wind than previously. Q11 Dr Turner: Are you suggesting that the Government should be looking to more, shall we say, investment incentives to help the generation of new jobs and, if so, what? Mr Retallack: Yes, we are saying that there should be greater incentives. There are different levels of this and some may be tax incentives. It is interesting to learn from the example of other countries when it comes to the use of incentives. Spain has managed to create a very successful wind industry, amongst other things, by putting in place local content requirements, in other words, requiring companies that want to sell into the Spanish market to actually employ local people. There are question marks over the consistency of that sort of approach with European Union legislation and indeed potentially with World Trade Organisation rules and requirements, but it is an area which we would certainly urge you to consider. There are other incentives beyond the fiscal and the regulatory, such as the need for adequate infrastructure. There has been a problem in this country with the port infrastructure that will be necessary, the grid infrastructure and connections, and all of those will need attention. Q12 Dr Turner: What do you think of the performance of organisations, both private and public, in improving their environmental performance? Are they doing it and, if not, why not? Mr Retallack: That is a question that goes beyond our ability, I suspect, to comment. We have not looked at that in the context of the research we have been undertaking on green jobs. Q13 Mark Lazarowicz: There is obviously a potential tension between providing green jobs for environmental reasons ultimately, which is a process which may take some time, and meeting the immediate needs in a recession. Having accepted all the qualifications about what is a 'green job', how can we try to make sure that a green jobs programme actually brings benefits to those particularly vulnerable in a recession to unemployment, as is obviously the case at the moment? Ms Lawton: One of the things that we are particularly keen to look at is making sure that these jobs are created at different levels so that there are opportunities for people perhaps who have lower skills or poorer work records, people who have been out of work even in the kind of economic boom that we have had, so we are very keen on looking at sectors like energy efficiency because we think that there are a lot of opportunities there for people perhaps who lack these very high skills which are sometimes associated with green sectors, so that is certainly one thing we are keen on, I think, and we have got some examples from America where that has worked quite well in deprived communities. I think there is also a role for the kind of employment and skills system which is working towards greater integration in trying to identify those people who perhaps have lost work during the recession and who may have the kind of skills that could be picked up and transferred into new green jobs, so I think there is quite a role there for making sure that the welfare and skills systems are working quite closely together to identify those people, so those are two things that could start to make an impact now, we think. Q14 Mark Lazarowicz: And are there signs that this is happening? Ms Lawton: Yes, I think that in terms of bringing together the welfare and skills systems, that is something that the Government has been very much behind and there are various pilots to bring budgets together and to get people working together, so I think that needs to go forward. I think there is a role for people working in those systems to have more information about local vacancies and about local employer demands so that they can pick out the people who may have relevant skills and direct them towards where there is local demand; there is probably more work that could be done there, and certainly it is why we are very keen to try and find ways of developing the energy efficiency sector, in particular, so that we can provide jobs, for example, for people who have lost their jobs in the construction industry, trying to pick those people and move them back into work as quickly as possible. Q15 Mark Lazarowicz: Aside from the energy efficiency sector, are there any other sectors you would identify as being particularly relevant in terms of bringing jobs to people who have become unemployed and/or people with low skills quickly? Are there any other sectors you would identify, besides energy efficiency because everyone comes out with energy efficiency, but everyone cannot be doing that surely, so what else is there? Ms Lawton: I think there may be some scope in manufacturing because the analysis that we have done shows that in the kinds of manufacturing jobs that might be created there will be some opportunities at lower and intermediate levels, so there may be opportunities there. There are things like the wholesale and retail sector as well which is not really associated with green jobs, but some of the analysis that we have seen shows that there will be some job growth there which may provide some opportunities, although in terms of numbers it will not be as significant. Q16 Mark Lazarowicz: Let me take the example where I represent a constituency where a lot of people work in the financial services sector, which does not actually appear to have been as badly affected as was suggested it might be as yet by changes in that sector, but how are people who are unemployed in that sector, but at the lower end of the scale, not at the top end, how are they going to be able to find green jobs in the changing financial world? Is there a role there and what can they do? Ms Lawton: I think that possibly one sector that does get overlooked, but which, from the analysis we have seen though, has quite a potential for growth is in what we call 'business services' and which those kinds of people may find a home in, so things like legal services. There is obviously low carbon finance and management consultancy work, accountancy, all those kinds of services that green sectors will rely on, so I think there is a role there. Again, those jobs do tend to be at the higher end, so we may need to put in place some training programmes and some kinds of transition programmes to help people move across, but that might be one kind of angle. Q17 Joan Walley: You have referred to the Low Carbon Industrial Strategy which was published earlier this year, and presumably there will be indicators as to how that is going to be implemented later on in the summer, but how do you see that vision linked to the current economic recession and the imperative that there is for the Government to look at finding jobs or helping those who are long-term unemployed or those with the fewest skills? How do you see the need for the Government to intervene where help is most needed set alongside this agenda of creating more green jobs? Ms Lawton: I think one thing we would be looking for is perhaps the Department for Work and Pensions (DWP) to become one of the departments that is leading on the Low Carbon Industrial Strategy because they are the Department which knows where the gaps are, where the disadvantaged people are, where their clients are. I know that all the departments are working on this together, but, if they were perhaps one of the lead departments in that, that could strengthen that process. Q18 Joan Walley: But is not one of the issues that perhaps the areas, which have the greatest numbers of unemployed or the greatest numbers of people with fewer skills, have the least capacity to be able to put together the bids that could go forward to the DWP programmes which could tick both the DWP box and tick the green jobs box as well? Ms Lawton: I think in those areas there is no reason why the local authorities and their partners could not get together. For example, hopefully in some of those areas they will be bidding for the money ---- Q19 Joan Walley: But I am questioning whether or not local authorities and their partners either have the nous to know what is going on or have the skills to do it or the capacity to do it. Ms Lawton: I think there are certainly questions over some local authorities, but I do think that, if they can work with their partners who are working on the ground, people in Jobcentre Plus, people in the local Learning and Skills Council and those sorts of organisations, people working with businesses, if they can get all of those people together and identify the particular gaps and the particular needs, and there are some local authorities who are very strong on this ---- Q20 Joan Walley: Do you know of some good practice of where that is happening? Ms Lawton: Certainly there are some pilots in the West Midlands that I have heard of. Q21 Joan Walley: Could you say whereabouts in the West Midlands? Ms Lawton: Sorry, I do not know the detail, I just know that there have been some pilots of kind of joint working between Jobcentre Plus and the Learning and Skills Council. I am not certain of in which parts, but I have been told that there is some evidence there from the West Midlands that that is working. Mr Retallack: Can we find out? Ms Lawton: Yes, I can certainly find out.[2] Q22 Chairman: One report has put the potential for jobs from the wind sector as high as 87,000 people, suggesting that this could be worth, or is worth, £11 billion. Does that accord with your own assessment of the potential? Ms Bird: Well, in our project we have not been able to do any of this kind of analysis of our own, so we are only able to see what other people have done and, as you can see, there is a range of estimates out there, but unfortunately we have not been able to do our own analysis of that. Q23 Chairman: Well, given what you have done, do you think that is the most promising sector in terms of low carbon industries? Does it offer the biggest potential for jobs, do you think? Ms Bird: I think it is certainly one of the more promising sectors. Energy efficiency again is one that comes out as having a high potential for job creation. Q24 Chairman: Why do you think other European countries have been so much better at developing their renewable energy industries than Britain? Mr Retallack: For a number of reasons, and different countries have to be looked at separately. In the case of Germany, it is partly because they have done the three things which, as I set out earlier, are necessary to create jobs in this sector. They have provided long-term regulatory frameworks, which have provided certainty that there would be a domestic market for the product, they have put in place incentives and the infrastructure when it comes to ports and clearly, when it comes to Germany, it has to be said, they have invested in the skills necessary for manufacturing some of the higher-tech elements, and that goes back through to their education system and how early they engage young people in specialising in the necessary skills. There are downsides to that, and Kayte can certainly talk to it, but in the case of Germany that is what has happened. In Spain, I mentioned the highly interventionist nature of some of their incentives with the local content requirements, for example, that they have put in place, and there will be other examples that we will be able to report back on, for example, when we have finished our work on green jobs which looks at what is happening in the US in due course. Q25 Chairman: Are we now in Britain too late? Given that you have mentioned Germany and you have mentioned Spain and Denmark is also further ahead on wind, are we trying to play catch-up after the boat has already left? Mr Retallack: Not in every sector. It is a very important question and I think one thing that we would urge you to consider and the Government indeed to consider is the need to be strategic when it comes to trying to create new jobs in low carbon sectors because we cannot be leaders in everything. Our sense is, however, certainly when it comes to energy efficiency, that there is huge potential in the UK. When it comes to wind, even though we are behind certainly the sort of world leaders when it comes to the companies manufacturing turbines, there is still huge potential here because of the fact that the UK has the best offshore wind resource in the world, the fact that we do have some skills that are highly relevant, particularly from the oil and gas experience in the North Sea, and we have the financial sector and consultancy sector skills which are necessary too to make this work. There are all sorts of jobs which will be created too for the maintenance of these offshore wind installations which make it important that the UK does try to catch up, if you like, because it would be a great mistake, a great lost opportunity, were we not to capitalise on those benefits. Q26 Dr Turner: But of course in this country, when people talk about renewable energy, they only think of wind and sometimes solar, where, as the Chair has suggested, we may well have missed the boat because we were so far behind the curve, but that is not the only promising renewable sector. We have the best tidal stream resources, we have the best wave resources in the world around the shores of the UK and, for the moment at least, we have a lead in the technology, fragile though it may be. How do you think we can develop that industry, which has many gigawatts of electrical potential and, therefore, many thousands of jobs? How can we avoid making the same mistakes with the opportunity to develop that industry which we made with wind? Ms Bird: As you say, it is an area where we are currently one of the world leaders and there is great potential to develop that, although it would be on a longer timescale perhaps than some of the other sectors that we have been talking about. I think one of the key things for the marine wave and tidal sector is to make sure that the research that is going on now is translated into viable industries, and I think potentially that is what has happened in the past with the wind sector, for example, that we lost that opportunity to capitalise on the research that we had done, so it is about developing the right policies to ensure that the innovation can continue from the research and development all the way through to the commercialisation phase. Q27 Dr Turner: Well, deployment, as has been very well illustrated by Denmark, Germany and Spain in the wind industry, is determined by the investment framework and the market frameworks that are in place. Do we have anything remotely approaching the right market circumstances and the right investment incentives in the UK to develop marine power? It is fine in the laboratory, it is fine in the demonstrator stage, but that is a long way and a very long way financially in terms of skill to getting a real industry. Ms Bird: I think one of the most important instruments will be the Renewables Obligation, so obviously that has been banded now to give additional support to developing industries and technologies, like wave and tidal; that is a step in the right direction. Q28 Dr Turner: Do you think that the Renewables Obligation in its present structure, even with the banding for two ROCs, is remotely adequate? It is just about, I am told, enough to incentivise an offshore wind project. Ms Bird: I am afraid I have not done any detailed analysis into the numbers on that side, so I cannot really comment. Mr Retallack: I would just add that I think the facts speak for themselves in the end when it comes to marine renewables, and that is, in answer to your question, that the incentives are not yet there in this country to see the full potential developed yet when it comes to marine renewables. Q29 Dr Turner: Well, we have already seen in wave power that companies have had to look to Portugal to start deployment. Are we going to see that as an emerging pattern in other aspects because of the lack of proper investment frameworks? Mr Retallack: I do not think we can comment on that. Q30 Chairman: We have got a company down in the Isle of Wight manufacturing blades which has supposedly closed. Now, why has that happened? Why could the Government not do something to stop that? Mr Retallack: Well, I think the official reason given by Vestas, the Danish wind company, for shutting down its manufacturing plant on the Isle of Wight was that the planning restrictions and laws in this country frustrated them, with local opposition having proven a barrier time and time again. We are slightly sceptical of that argument, not least because a lot of the turbines that they have been manufacturing there are not for the UK market, so we suspect that what is probably primarily responsible is the effect of the global recession and its impact on demand. Q31 Chairman: There is an extraordinary contrast. For those of us who remember what it was like when the North Sea oil industry was taking off in the early 1970s, it seems an extraordinary contrast between the enormous effort that was made by business leaders and Government to make sure that the most rapid possible development of that resource occurred, and lots of new technology was required because they were both installing and producing in more hostile waters than previously most of the oil industry had been involved with. Given what you say about the potential wind resource we have in this country, it does seem extraordinary and very frustrating that we are not seeing a similar united effort. Now, is this a lack of interest by business leaders as well as by Government? The big oil companies are actually reducing their interest in this area rather than increasing it, which makes some of us hope that the oil price goes back to $200 very quickly. I just think that there seems to be a great opportunity and no one is pressing the Government hard enough, apart from people like you and us perhaps, to change the policy framework and business itself is not really driving it forward. Mr Retallack: Well, I think there are two aspects to this and one is the role of Government and one is the role of business. On the Government front, it is fair to say, I think, that governments have been too slow when it comes to putting in place the right frameworks, incentives and skills necessary, and that has been a real shame. However, we should give credit where it is due and I think it is fair to say that the Government has now woken up to the potential for job creation here, and we welcome the fact that certainly under Peter Mandelson, DBERR, or whatever it is called these days, DBIS, I think, has decided to reverse a decade-long attitude to industrial policy. They have said that we actually do need an industrial strategy if we are going to maximise the potential job creation in the low carbon economy, which is a very welcome change and we hope that the detail matches the rhetoric, if you like, in the summer with the detailed announcements, we hope to see, on what that Low Carbon Industrial Strategy will look like. On the company front, I think it is again a real shame that companies like Shell and BP have decided that they do not want to invest in renewable energy projects in the UK any more, including offshore wind, and unfortunately actually I suspect that the higher the oil price goes, the more likely they are to continue to think, "We don't need to invest in renewables and we'll continue to put our money, for example, in the tar sands in Alberta in Canada because that's where we'll make more money". Q32 Joan Walley: In the evidence which you submitted,[3] you suggested that, because you have got green jobs in so many different sectors, there is not really any need to have a generic green skill set, and I am just wondering whether or not you feel that that is the right approach to take and whether or not, if we are going to get some new skills right the way across the board, that is going to mean people at all different levels understanding the need perhaps to change what they are doing, and would there not be some point in having that kind of green skill set that could inform the development of innovation and policy and bring new technology into manufacturing? Ms Lawton: In our evidence, we were really saying that from the evidence that we have seen jobs will be created in lots of different sectors, so there will be jobs in high-tech manufacturing, there may be jobs in loft insulation and there may be jobs in finance or management consultancy and they all require a very different set of skills, so we felt that there is not necessarily a kind of single green skill set that would be useful for the person in high-tech manufacturing and the person in architectural services. That is not to say that there is not a role for some of the work perhaps that the trade unions and some employers are doing around 'greening' work places, which is relevant to all organisations, and that is perhaps something slightly different from what we were talking about here, so we felt that generally with skills policy it helped if you could be as specific as possible about where you think skills issues are and what the remedy for those is rather than having a very broad approach and saying, "Everyone needs this kind of skill or this qualification". We think that in the past that possibly has not been the best approach, but there is certainly a need for a kind of greening of workplaces, greening how businesses operate, and perhaps that is a slightly different thing, but it is definitely needed. Q33 Joan Walley: Given that there does not seem to be any targeting by Government or industry of where the specific skill gaps are, why do you think that is? Ms Lawton: At the moment, the Government's approach to skills is quite broad in that it has these quite broad targets for having people at different levels of qualification and its targets are very kind of generic in that sense, but within their strategy though there does not seem to be a particular focus on what kind of qualifications or where these skills are needed, so they have targets that X per cent of people should have a Level 3 qualification by a certain date, but there is not very much said about what kinds of qualifications those should be and what sectors they should be in, so I think possibly it is those targets which are driving some of the action. They have certainly said that they want a kind of demand-led system, which could be a very strong approach, but, where it is governed by those very broad targets, it is not clear that those two sit together very well. Q34 Joan Walley: But if it is the case that we have different government initiatives coming forward, and you referred to the strategy, and there are changes in the Learning and Skills Council and how that is going to be positioned away from the stand-alone councils within the local authorities and then you have got further and higher education, do you not think that there should be some way of looking at the skills and the qualifications and changing the existing pattern so that it does reflect the priority of creating new jobs? Ms Lawton: Certainly, and in our evidence we were talking about an organisation, whether it be a department, an agency or whatever, which has oversight of those current gaps and has some kind of sense of where the future demand is. Q35 Joan Walley: So who do you think it is who has that knowledge? Ms Lawton: At the moment, I would imagine DIUS, for example, the former department people there would have had that knowledge, the Department for Innovation, Universities and Skills, and presumably those people have moved over to the new Department. It would also potentially have been something that the Learning and Skills Council were looking at. Q36 Joan Walley: So you are saying that the people who have the skills, by and large, are now the ones who have moved to the new DBERR and the other ones have moved to the local authorities, so there is not even a focal point as to where that understanding of where the gaps are is? Ms Lawton: I am not fully aware of exactly who is responsible for what within the departments, but I would imagine that the people who were doing that at the old DIUS have gone over to the new Business Department and, if that is going to continue to be a priority in that Department, then they will have the expertise. Q37 Joan Walley: Just looking at the new developing skills which we will need if we are to move to green technology, do you think that there are sectors or particular areas where those skills are already well advanced and could be used to help adapt more widely across the wider economy? Ms Lawton: We are actually right in the middle of some of our research around this in terms of talking to employers where we are doing some interviews and a survey as well and we do not yet have the results from that, so it is probably a bit early for us to comment on that, but we can certainly send you the results when we have them.[4] Chairman: Thank you very much. I think we are out of time now. As you will continue to do some work in the area which we are looking at and we certainly will not be publishing our Report until the autumn, perhaps we could keep in touch because there may be more stuff you could let us have either in writing or in conversation with the staff because this is a very important bit of work from our point of view and we would appreciate having a further input from you. Thanks for coming in. Memorandum submitted by the Aldersgate Group (GJS11) Examination of Witnesses Witnesses: Mr Peter Young, Chairman, and Mr John Edmonds, Member, Aldersgate Group, gave evidence. Q38 Chairman: Good morning, and thank you for coming. You have obviously heard what has taken place so far, and we appreciate your time. I know you have just published the findings of the interviews that you did with the members of the CEMEP.[5] Could you say what their response was on the criticisms which have been made about the Government's own response to their written recommendations, firstly, that there were not enough high-level policy measures to back up the rhetoric in Government and, secondly, that, nothing was being done to bridge the impending skills gaps? What do they say about those two issues? Mr Young: Just perhaps to introduce why we did that as well, the Aldersgate Group, you are hopefully familiar with it, it has business, it has third sector organisations, et cetera, so we look for where there is consensus across all of those as well as having notable individuals, like John joining me today. The reason why we did that was we felt that there was not any accountability or visibility for this whole agenda which was opened up through CEMEP and the low carbon economy, which is where that phrase has come from, and we thought it would be a good opportunity to actually try and give some focus and attention to that, so that is why we did it. To come on to your question and to respond initially, the first thing that was quite clear in terms of a coherent approach is that everybody who had been involved as former commissioners felt that there had been a tendency for the recommendations to be picked up by individual departments and compartmentalised and, as a result, had lost momentum that could have been there. The feeling, therefore, was that there was a lack of urgency and perhaps a lack of pace compared with that which was required if we were to realise the full economic potential of addressing this really important issue, this fundamental transition, if you like, in our economy, that it was being downgraded to something which was perhaps done a bit in individual areas on the side as a specific initiative which was not sufficiently large or important compared with the feeling that had grown up during the course of the actual Commission's life, its year. On the second area in terms of the skills, the feeling was that the market at the moment is not making a very clear signal in terms of the skills that are needed to make this adjustment because it does not feel clear enough about the pull which regulation and policy is going to drive for the creation of the jobs and the needs that will come out of that. As a result of that lack of market pull, there was a need for more intent from Government to at least match the needs so that we do not have the stop-start of an initiative in a particular area creating a demand which then, in due course, creates a need for skills which creates a reaction in terms of delivering those skills, by which time the cycle has really been at quite a low pace compared with what was needed; it needed a modern, strategic approach matching the demand of the supply side. Mr Edmonds: I think there is a real cast of mind problem here. We are not talking about adding little bits on to our economy which happen to be green or excising little bits which happen to be dirty; we are talking about the transformation and, once you start talking about the transformation, then you start opening up a whole series of other intellectual and, frankly, viewpoint problems which have to be accommodated. The structure of our government is not too good at dealing with those transformations. The nature of government in this country tends to be to divide up big and small issues into the various government silos. This is transformation and it is not clear, even now with DECC or the new Business Department, who has the responsibility for that transformation. Q39 Chairman: What about the Budget this year with the heralded green fiscal stimulus? What do you make of all that? Mr Young: Well, there were some good bits in it, but it was not sufficient, and again I think it exemplifies what we are saying, that it does not match the scale of the rhetoric and the ambition which the Government set out for itself. Taking one very obvious area in terms of energy efficiency, there was something additional there which was good, but it is nowhere near that which could be put in place which would benefit the economy and, particularly at the moment in a recessionary time, create jobs in this transition period when we are moving from a historical building stock into a building stock that is much more energy-efficient and suitable for the 21st Century. The scale just does not seem to match the expectation that has built up in terms of some of the ministerial statements which have been very encouraging. Q40 Chairman: I like the talk of the transformation, but, in trying to make the case for it and, therefore, the case for much more sweeping measures, are we saying enough about the medium and long-term benefits of being one of the pioneer countries in decarbonising our economy and our infrastructure? Everyone talks about the cost, and of course in the very short term there are some costs, but the benefits of being ahead of the field are absolutely enormous. My sense is that we are not saying enough about the huge advantages which will flow to the country, the prosperity of the citizens, GDP and individual businesses in all those ways. Mr Edmonds: First of all, there is a big understanding deficit. Some of the comments made by Ms Walley seem to me to be demonstrated in all parts of our national life. People do not understand what 'green' means actually and on some of the issues the evidence comes out in a rather counterintuitive way. I remember some very interesting debates about whether terry-towelling nappies or disposable nappies were the most green, and actually the numbers show that they are very similar if you take life cycle, so the whole population actually needs some of the intellectual equipment and some of the learning in order to deal with these things. The deficits in industry are remarkable where individual companies and individual industrial sectors - and the Carbon Trust has done a great deal of work on this - are not able to understand the transformations which will be necessary within their own companies and within their own sectors and the pressures that there are going to be. Therefore, we have got only the haziest view of what is up ahead, so, as always happens, when you do not know what is up ahead, you are subject to short-term fears of the most acute kind and everybody gets a bit upset and then we have the sort of displacement activities that are so well known amongst some other mammals, so we are just not coping with it because, I think, we do not actually have the understanding to start getting into this. I notice how quickly the discussion goes from some of the big picture stuff to some of the tiny, little details without going through the periods or the issues in between, so there is an education and understanding problem which is enormous. Q41 Joan Walley: Can I just come in on that point because you have come from a trade union background and what you just set out is basically an approach which is very much the fundamental basis of the trade union movement in terms of education which eventually leads to the changes in action. How do you see that understanding which you have just described somehow or other being adopted by industry or government departments, reorganised government departments, local authorities or people on the ground? Mr Edmonds: Well, some of the educational gaps can be filled. Decent environmental foundation courses at all levels in our education system seem to me to be absolutely essential and I cannot see them developing very quickly, which is a big sadness. The debates at workplace level tend to be pretty sterile and tend to be very tightly connected with health and safety issues rather than with wider environmental issues because workplace representatives have no role in this area, they have no rights, they have no powers and there is nothing equivalent to the Health And Safety at Work Act in the environmental field, so it is very difficult for them to get into a valuable discussion, and of course there is the well-known short-termism that our particular type of market economy tends to encourage in most companies, so there are all sorts of difficulties here, but I think putting something right in the education system would be a very good start in all of this. Supplement that with workplace discussions which have real value and you are beginning to move, but we have to move a long way. Q42 Joan Walley: Perhaps I will invite you to my constituency to have that kind of workplace discussion. Just moving on, you do recognise in the evidence you have given that the Government has taken some action in tackling the skills shortages that exist in the environmental sector, and you give us an example of the National Skills Academy for Power. I just wonder what these actions do to fill the skills gap that you have just referred to. Mr Young: I think what we are saying there is that that is probably the best of the bunch at the moment. Q43 Joan Walley: The best of a bad job? Mr Young: Yes, that is right in terms of a reaction to meeting the skills need, and I think that is because of the very real issue there has been around the nuclear sector coming back and also a recognition that we need both the grid connection and the ability to retain more of the jobs from the various renewables policy instruments that we have got. That fits fairly neatly within a sector and, as such, is more comfortable, it seems to us, for Government to be able to address, but, when you then follow that through to the wider needs, as you say, flowing through to local government and wider business, there is a need to actually penetrate the whole economy with a view as to additional skills. These are not jobs in the sense of being someone sitting on the side with this particular badge, but these are actually skills that need to be part of mainstream employment in many, many sectors, and that area does not seem to be being addressed really at all at the moment and that is the bigger challenge and it is a joined-up challenge because it involves not addressing it in a compartmentalised way. In terms of success of the power sector, I think it is very early days. It cannot be addressed without tackling what John just said, which is again the basics in terms of science and engineering. We have a very weak science, engineering and technology base really to address this agenda, and it is a very technical agenda, it is going to require, and have a tremendous appetite for, skills in science, technology and engineering way beyond that which we have experienced in the past. Q44 Joan Walley: How long do you think it will take to introduce these skills to the workforce within this Power Academy that we are referring to? Mr Young: Well, longer than we would like, but I think the general view is that you are probably talking about a five-year period before you really see a major effect in the employment sector. Mr Edmonds: But this is interesting stuff actually. People like learning about this and, if we were actually keen to teach people, we would not have any shortage of takers. We are talking about changing the whole basis of our industrial economy and in a better world people might get more obviously excited by that. The biggest industrial change since the 18th Century, goodness me, this is quite big stuff. It depends on the level of commitment both from industry and of course from Government, but you could transform in this country people's understanding of the environmental essentials in a year if you wanted to do it. Q45 Joan Walley: But do you feel that that urgency is there? It is time that is needed. If we are going to live up to Stern's expectations and the Climate Change Committee's objectives that it is setting for the country, is there sufficient recognition of the time factor? We have not got five years to wait for these skills to trickle down, have we? Mr Edmonds: No, it is the cast of mind problem. We talk about transformation, but we act as if we are talking about small adjustments and that is a big problem. As I say, it is partly to do with the structure of government, but it is also to do with the cast of mind, and some politicians are not entirely free of these lack of understanding problems, present company obviously excepted, but I have heard ---- Q46 Joan Walley: And there are a few others. Mr Edmonds: ---- politicians talking in terms which are environmentally illiterate and they believe that they are making a green case, so there is a lack of understanding throughout a large part of our society and that means that planning proper policies becomes extremely difficult. Q47 Joan Walley: So what can be done to reduce the amount of time to get people thinking in this mindset about the skill changes and the transformation that are needed? Mr Young: Well, one thing that was said, going back to CEMEP, is that there needs to be ownership of this somewhere, there needs to be clear ownership. Two years ago, we were there talking about the UK Commission on Employment and Skills maybe being given a very specific remit to kick-start a greater level of activity, but the Government took the view that it had other priorities at that stage and I see that has come back on the agenda as something it is going to consider again now. I think one of the biggest problems with this area is this absence of accountability. It is only with the current government structure, when you have sliced and diced this agenda down to quite small segments, that you find an owner and that owner may be actually able to drive some change through, but, by definition, they are only doing it in a small way. We need something at a much higher level for the skills agenda which is recognising that every part of the economy needs to be touched by this and every part of this economy is at risk if we do not have a change in terms of the supply line in terms of skills and capabilities of the employed workforce. Q48 Joan Walley: I think we should be asking the candidates for the new Speakership whether or not they have an approach towards greening Parliament in terms of ownership! Mr Edmonds: All I was going to say is that unfortunately at the moment we have rising unemployment and it looks as if it is going to rise for a good few months, and maybe more than that, into the future. If we wanted to, we could give people who are unemployed an opportunity, a deeply encouraged opportunity, to undertake some environmental foundation course to enable them to go back into employment with a wider basis of knowledge than they have at the moment. We could do that if we wanted and we are not doing it, but we could do it. Q49 Dr Turner: We seem to have established that the Government is doing all that it might do in this area, but what do you think industry is doing to identify the skills that it is going to need to move to a low carbon economy, and do you think that the Government is aware of those needs? Mr Young: I do not think the Government is as aware as it could be, but I think also that industry is struggling to see where the long-term policy and signals are going to give rise to the really large opportunities for investment and, hence, going to create the needs and their future business activities. I think one of the key problems we have with any transition is the fact that the new jobs are not that tangible and visible. Initially, they come up in a lot of SMEs, they come up in areas which are reacting to shifts and step changes in policy and, as a result, the cumulative effect of that is not a very strong signal, so I think that, whilst there are people in the business community who can talk about this, and we have the benefit of some of them on the Group, there is not a very strong signal because it is quite compartmentalised as well within business, and there needs to be a more strategic approach and a forum to actually channel that know-how and that knowledge of what is going to drive the future economy into government. Q50 Dr Turner: It seems to me you have touched on a rather fundamental point, being the nature of British industry. We have seen before large British industries die because times have changed and they did not. Is that process still going on, do you think, because, if we are dependent on the SMEs to create this transformation, there is lots of evidence to suggest that that is where the ideas and the consciousness are, but that is not where the financial muscle is to put it into practice, so it seems to me that we have got a fundamental structural problem as well as a skills problem, but the two things go together, so can you see any way of resolving it? Mr Edmonds: British industry tends to be very good when it has an opportunity that falls entirely into its core business. Chairman, you raised the question of what happened when we found North Sea oil and gas. Well, okay, we had oil and gas industries, we had a big oil industry, they saw the tremendous opportunity for profitability and, because they were going to invest very heavily, they pulled along a whole series of contracting and supplying companies with them because there was the confidence that a great deal of money was going to be spent. The problem we have now is that we do not have the companies for the new industrial revolution, so people have got to start thinking about some of their political and economic models and whether they fit too well into this particular world, and some of those models have been challenged quite fiercely in the last 18 months and it has been a great delight to some of us, but perhaps not to others. The point really is this: that to find quick market-based solutions to that sort of problem seems to me to go all against the experience and commonsense. The market will eventually find solutions, as it did in the 18th Century, but it took an awful lot of time and an awful lot of misery in between. The TUC has said that what we need to achieve is what they call a 'just transition', by which they mean a transition with economic and social justice, and it seems to me that the role of government in intervening financially is going to be very, very important in all of this transition because, otherwise, the market moves will be slow and of course there is no reason to believe that those market moves will eventually favour British companies against Continental European, American, Japanese or South-East Asian companies, so we might lose out very, very badly. That then raises the whole question, and you would have to sometimes challenge some of these things, about picking winners. For 30 years, British politicians have been telling each other that we must not pick winners. Well, maybe this is the time to start to thinking about picking winners. We are very careful in our paper to distinguish between picking winners, where you take one narrow technology and bung money at that, and taking a group of technologies and saying that somewhere in all of that there are going to be successes, and there will be some failures, but there are going to be some successes and you back it with public money, so the paradigm, I suspect, needs to change, otherwise we are going to have quite a few decades of misery. Q51 Dr Turner: Our record of public investment in industry is very, very poor, is it not? It has not really happened to any significant extent since perhaps the almost Stalinist days of CEGB[6] and the UK Atomic Energy Authority when it was railroading a nuclear industry into being and so on. Mr Edmonds: But it did produce electricity, mind. Q52 Dr Turner: Do you think that there is a case for very much greater, albeit targeted, government intervention in order to secure an industrial future? Mr Young: Perhaps I can come in on this in terms of looking at it in a modern business context. I think the key gap that we are talking about here is that there is a transition and there has got to be some pace to that transition. I think there is an awful lot which government can do to attract business to invest in, to trial and to demonstrate the new technologies and solutions that are required. I think something that the UK is quite good at and has been quite good at ever since Nicholas Stern's Report is articulating what the issues are and perhaps what some of the solutions need to achieve. If we can set the bars high enough, and there are mechanisms that have not been developed far enough, like forward commitment procurement or whatever, to define what it is that we want to purchase in the future, if we can give the opportunity to let the innovators come in and fail as well as succeed with government support to prove what the best solutions are, then I think a lot of these new seedcorn businesses that we do have, which are going to fulfil the requirements and perhaps become our major players in the future, will get accelerated. We need to put a tension into this gap between the inventions and the innovators and the big businesses and I think, as we have said, the big businesses that we have at the moment may actually not be best suited to the requirements in the future, but, if we can articulate those requirements and if we can create enough opportunity to demonstrate those in a true commercial context, I think that is definitely a role for government; it is the demonstration part of RD&D.[7] Q53 Dr Turner: So what you are saying is that established big businesses are too risk-averse to be interested in this issue and the innovative SMEs are faced with the valley of death and the Government is not doing enough to help them across the valley of death because it is one thing to innovate and produce something which is on the verge of commercial exploitation, but it involves a different order of magnitude both in finance, skills, et cetera, et cetera to get to large-scale deployment. Do you think that Government is failing to fill that role? Mr Young: Yes, I think it is failing in terms of direct support in that kind of way, but I think it is also failing in not articulating strong enough policy and regulatory targets which reflect what the needs will be globally in the future. If we can build up the reputation in the UK of setting those standards first and of setting them in a sufficiently rigorous way in terms of decarbonising or in terms of emissions standards or whatever, then I think we will also attract overseas companies to invest in the UK because they know that that is the place where they will get the support to hit the technology not of today or tomorrow, but even the one after which will get them global sales. Q54 Dr Turner: I am really supposed to be asking you questions about the skills gaps, but we have got into a much more interesting line of questioning. To bring it back to skills, in order to achieve progress, we are going to have to address all these skills gaps, so should the Government not only be giving the sort of support that we have talked about, but also undertaking targeted activity to plug the skills gaps because the two things need to go hand in hand? Mr Young: Absolutely. Mr Edmonds: On one small, but very important, skills gap, one of my jobs is that I sit on the Board of Salix which delivers government money into the public sector to support energy-saving projects. It has been very successful and we got extra money out of the Budget to do more of this. One of the things which we find, particularly when we are dealing with local authorities, is that a very significant shortage is of highly trained energy managers, and what typically happens is that a local authority develops a very good portfolio of projects that they want to pursue and then some other local authority poaches their energy manager because there is a massive shortage. It is fine for the energy manager, he or she moves off probably onto a high salary, and that local authority then sticks, it cannot find a replacement. There just are not enough fully qualified energy managers either in the public or the private sector, so energy efficiency, which is regarded by us and everybody as a very important component in this transitional policy, is not being properly serviced because we do not have the energy managers to service it, and we keep having these hiccups and pauses, so that is one area where the skills gap needs to be filled. Of course, skills need to be related to policies and, if, as we suggest in our paper, it were decided that insulation standards, smart metering, electricity infrastructure, water infrastructure and social housing should be improved on a street-by-street basis, rather in the same way as we converted to natural gas or something like that, which could transform energy efficiency in existing houses, then you could train for that. That would be a very important skill and would do great things to reduce unemployment levels because the skills involved are not enormous and they could be taught fairly quickly and they could be limited in the same way as we have done in the past. Q55 Dr Turner: How could you get industry to take a responsibility in this? Mr Edmonds: Well, I think this is one of the roles of regulation. This is the point Peter was making, that, if Government, through its regulatory framework, demonstrates that progress, as I would put it, is going to be made, that by such-and-such a date these standards will have to be met and by such-and-such a date after that these standards will have to be met, then it is much easier to get the investment in industry for reaching those standards because people can see that survival requires those standards to be met, but also that money can be made in reaching those particular standards, so developing a regulatory framework has to exist alongside the necessary investment in industrial infrastructure. Q56 Dr Turner: So the hands-off approach cannot be sustained? Mr Edmonds: Well, I would say that, would I not! Mr Young: Even from our business members, I think, that is exactly what they are saying, and they want to know where the responsibility lies so that there is some continuity there as well that they can believe well beyond the period of one government or whatever that there is some permanence there. I think one of the risks we have got is that we have seen a lot of short-term reactions which are good and, just to pick perhaps one example, if I may, in terms of the offshore renewable that we mentioned earlier this morning and the banding of the Renewables Obligation and raising that up to a factor of two, which just about satisfied the investors who were about to walk away from the offshore renewable, at the same time one of our members, SEEDA,[8] is still struggling to retain Vestas, the only turbine blade manufacturer, in the UK. Now, the reason why that is on the point of disappearing in terms of 700 high-skilled jobs is because the reaction has been too short-term and there has not been a conviction that the Government can turn a very clear signal for renewables into a policy which is going to run through. I think that, for me, is a good exemplar of the difference between why business is not in there investing and creating this market demand for skills, even though the high-level policy is extremely strong. Q57 Joan Walley: You just mentioned earlier on the importance of having a strategy, so it is difficult to see how a green skills strategy can develop if there is not an overall clear strategy, but nonetheless, I just wonder how you feel that the range of organisations which do have an interest in green skills, how well co-ordinated the overall action is and what can be done to improve it? Mr Young: My personal experience is that it has got a long way to go to be co-ordinated and it starts again from where the ownership of that responsibility lies and the historical structure, it seems to me, which is compartmentalised, and this is a cross-cutting theme, and there is not at the moment a strong enough venue. There are various fora, there are various dialogues taking place, but there is nothing which, it seems to me, is able to drive the agenda forward at the pace that is required when you have to acclimatise between the existing structures, so I think there is some forum needed there or at least some vehicle which provides a single point, a long-term strategy, against which each of the individual components of the skills environment can then react and contribute. Q58 Joan Walley: If you were asked, who, do you think, would you say would be the green leader of the green skills agenda? Is there a leader out here somewhere? Who is leading this whole agenda? Mr Edmonds: You mean who is doing best at the moment or who should do it in the future? Q59 Joan Walley: If you were asked who is actually leading this green skills agenda, who is doing it? Is anybody doing it, or who should, or could, be doing it? In previous Environmental Audit Select Committee reports that we have had on the whole different aspects of the sustainable development agenda, we have highlighted the importance of a leadership role to make sure that things go from the top down and to aim for things to go from the bottom up as well. I do not know where the leader is for this green skills agenda and I wonder if you do. Mr Edmonds: Well, there is not one. We are back into the transformational problem, that lots and lots of organisations are bolting little environmental bits onto their training and saying that it is green training, whereas looking at the thing afresh and what is going to be needed in the future is rarely done, but it must be the Business Department, must it not? If we are talking about a leader in Government, it must be there. Getting a commitment from the CBI to follow up their really rather enlightened statements which have been made over the last six months or so with real activity in this area would be extremely valuable. To take one small, but very important, example, everybody knows that construction methods are going to change massively, the way in which the services are going to be installed, that we are going to move towards more micro-generation and, certainly in commercial buildings, more CHP[9] and so on, so this requires a tremendous development of skills, but where are the skills being developed? Are they being developed in the construction industry? Hardly. Well, there is a challenge. It could be made by the Business Department and the CBI and from the CBI then to construction members, and most of the big companies are members of the CBI, so there could be that type of approach. We then prepare for the future rather than simply sort of stagger on as each new regulation hits us. Q60 Joan Walley: I am just wondering about the UK Commission on Employment and Skills. Was that meant to have some kind of co-ordinating role? Mr Young: Well, that was the suggestion made back in the CEMEP days, that it was then just arriving on the scene and seemed to be a vehicle which could provide that. It is, as I understand it, an organ which will now be an organ of the Department for Business, Innovation and Skills, whatever the name is, and I think actually that what we are just seeing there is that we have actually had three departments in two years with that responsibility which, for me, says it all, but that some kind of commission or committee or forum which is under the new Business Department should be given this task. Q61 Joan Walley: Was this included in the 39 words or however many words there are in the new title of the new Business Secretary of State, this green agenda aspect of it with reference to the green agenda? Mr Young: I cannot recall, I am afraid. I do not know, but I doubt it. Q62 Joan Walley: I am just wondering how fit for purpose the ---- Mr Edmonds: His personal title is a bit complicated, so it used up a lot of the words, but no, I have seen no indication of that at all. I am not sure that the co-operation between the Business Department and DECC is as close as it should be in this particular area because DECC is meant to be producing the policy and the foresight for the future and so on and, as I understand it, the Business Department needs to be the operational arm. Well, that type of co-operation would be extraordinarily valuable. Chairman: It all sounds really quite simple. We know what we are trying to do, we know where we need to get to and the benefits of doing so are enormous in terms of jobs and future prosperity, so why does it not happen? Is there some kind of cultural block to this or have people got their heads in the sand? Q63 Joan Walley: Or is it vested interests elsewhere? Mr Edmonds: There is this silo problem which we all know about in government, but there are devices for overcoming that as well. There is the problem of the lack of understanding, and we talked about that earlier, and there is also the problem of concern about just how big this task is and, therefore, as Peter says, people tend to try and dice it up so that they can find little bits that they can chew. The task is not a particularly difficult one and the solutions are not particularly difficult, although doing it will be expensive, but, as the man said, if you think education is expensive, you should try paying the price of ignorance, and that, I think, is a very good slogan for this particular area. If we are so far behind the curve, as Dr Turner was saying, then we had better do something really quite quickly. Q64 Mark Lazarowicz: In your report,[10] you mention two specific programmes which could be significantly moving towards a low carbon economy. One is for a street-by-street, house-by-house energy efficiency programme and the other is a public procurement programme. How feasible are these programmes, given the current Government approach to the wider issue, and what needs to be done, in your view, to make them happen? Mr Young: There needs to be more money put in on the energy efficiency side and there needs to be a bit more vision in terms of, if you are going to go and make that intervention, what is the maximum benefit upgrade, if you like, you can achieve. If you have got someone going into a house and they are putting in loft insulation, is that enough? It would be good to talk a bit more about what else could be done there. In the area of energy efficiency, the key thing about that is that it is a transitional activity, and I am not saying it is a sort of distraction while we deal with the main event we have just been talking about, but it is something which will give an immediate benefit to the overall economic well-being and competitiveness of the country as well as providing jobs and demonstrating actually the degree of employment opportunity there is from tackling this agenda. Q65 Mark Lazarowicz: But, given we all know this and people have been saying this for five, ten years or more and there are all sorts of programmes out there which are meant to make it happen, why is it not happening? Mr Edmonds: There is a real understanding problem. You say that everybody knows, but I am not sure that everybody does know. There is still a large proportion of the population who think that energy conservation is about switching off lights. Well, I am not against switching off lights, I think it is a very sensible thing, but work done by the Carbon Trust demonstrates quite easily that, if you are really looking at improving energy efficiency, you should buy better kit, whether that is domestic kit, industrial, commercial or whatever; that is the thing that persists. Second to that is to properly look after and maintain the kit you have got, and that is short of persistence, but it still has some value. Lastly is behavioural change, which is kind of useful, but you need to reinforce it every two weeks, otherwise people forget. Q66 Mark Lazarowicz: Well, let me rephrase the question. Maybe there are sections of the general public who do not realise this, but policy-makers, Government both local and central, know this and know ---- Mr Edmonds: No, they do not. It is not many months ago when people were being told, "Do your bit and switch the lights off". Well, fine, I am not against that, but the idea that that makes a major contribution towards energy-saving without the most enormous and repeated reinforcement is absolute nonsense. If you transformed the efficiency of the white goods that people have in their houses, you could save a lot of energy. You just make the white goods more efficient. How do you do that? You regulate to make sure that particular products cannot be sold and you make sure that those products which are sold are properly labelled in energy efficiency terms. Now, we all know that is the way to do it, but it is not done. Now, that is one of the problems because people still take the simple way and say, "What we need is a behavioural change". Of course we need a behavioural change, but we also need better kit and better maintenance and then we save energy. Mr Young: We also need a joined-up approach. Just at the moment from the Landfill Directive in what has been a huge effort by local authorities to try and get behaviour changed at the household level in terms of recycling, there is no connection whatsoever between that with respect to schemes that are being set up to encourage people to insulate their lofts, nor is there any connection with respect to how to improve the energy efficiency of the energy-using equipment in your home. Those three things are all going on ---- Q67 Mark Lazarowicz: So what kind of connection do you envisage there? Mr Young: Well, if you packaged it up against this low carbon economy, however you want to put it to the public, which is actually about making yourself resource efficient and, hence, your economic expenditure lower and the benefits which come from that, you could make one intervention, cover all of those things at one time and go to that one behavioural change, instead of confusing the public by actually exhorting them to do independent things, some of which are actually directly conflicting because of the different responsibilities and the bodies which are interacting with the public. The same applies to industry and industry is also confused by that. They have a number of different schemes that come to them, looking at one particular element, and they have particular performance indicators which drive them down one particular route rather than looking at the overall low carbon, resource-efficient solutions which would bring them the most benefit. Mr Edmonds: My local authority is very keen that before we put out the empty cans of dog food in the little recycling skips that they give us (and uncovered, but never mind about that) we wash them very thoroughly. We happen to be in a water-stressed area, so we are going to use a lot of water to wash the cans before we put them out. Now, someone ought to be doing some thinking about this, should they not? That does not seem to me to be a very wonderful way of making the connections that Peter is talking about. Chairman: Well, thank you very much for coming in and for covering a good amount of ground today; we much appreciate the time you have given to us. [1] EAC 3rd Report, Session 2008-09: Pre-Budget Report 2008: Green fiscal policy in a recession, HC 102. [2] Note by Witness: The West Midlands examples Ms Lawson referred to are ongoing pilots looking at joint commissioning between Jobcentre Plus and the Learning and Skills Council so that funding for skills and welfare to work support is aligned, to support job entry and career progression. However, to our knowledge, there has not yet been any published evaluation of the programmes, so unfortunately we are not able to provide any further evidence on the outcomes of the pilots at this point.
[3] See Ev.... [4] Note by Witness: Work is currently being undertaken by Ippr and their findings will published in due course. [5] Note: (CEMP) Commission on Environmental Markets and Economic Performance. [6] Note: (CEGB) Central Electricity Generating Board. [7] Note: (RD&D) Research, Development and Demonstration. [8] Note: (SEEDA) South East England Development Agency. [9] Note: (CHP) Combined Heat and Power. [10] Note: The Aldersgate Group, Commission Statement: Driving investment and enterprise in green markets, June 2009 (http://www.aldersgategroup.org.uk/public_reports/view_document/10)
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