CORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 671-ii

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

ENVIRONMENTAL AUDIT COMMITTEE

 

 

Green Jobs and Skills

 

 

Tuesday 30 June 2009

MS TESS GILL and MR CHARLES SEAFORD

MS SUE FERNS and MR PHILIP PEARSON

MR MARTIN BAXTER

Evidence heard in Public Questions 68 - 175

 

USE OF THE TRANSCRIPT

1.	This is a corrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.
2.	The transcript is an approved formal record of these proceedings. It will be printed in due course.

Oral Evidence

Taken before the Environmental Audit Committee

on Tuesday 30 June 2009

Members present

Mr Tim Yeo, in the Chair

Mr Martin Caton

Colin Challen

Mr David Chaytor

Martin Horwood

Mark Lazarowicz

Dr Desmond Turner

Joan Walley

________________

Memorandum submitted by Sustainable Development Commission (GJS35)

 

Examination of Witnesses

Witnesses: Ms Tess Gill, Commissioner for Work and Skills, and Mr Charles Seaford, Senior Engagement Analyst, Sustainable Development Commission, gave evidence.

Q68 Chairman: Good morning, and welcome to the Committee; it is our second evidence session on this new inquiry so we are glad to have your evidence. Your submission says[1] that at the Windsor Consultation on low carbon skills there was little sense of progress on the CEMEP[2] recommendations; why do you think we are making so little progress towards developing the skills for a low carbon economy?

Ms Gill: There has been a failure to have ownership of the project to any significant degree. At the Windsor Consultation the feeling was that the UK Commission for Employment and Skills would be a suitable body to take ownership, to look at the whole skills system, which is quite fragmented as your Committee probably knows. We have got what was then DIUS, now BIS, but then there are all kinds of different agencies under that - Learning and Skills Council, funding agencies, we have the providers, the colleges and so on and then we have got the qualification bodies. If one is going to have to have a co-ordinated approach to ensuring that public funding, provision of skills, employers seeking skills, is going to be co-ordinated around the need to transform our society in a low carbon, resource-efficient way, then someone really has to - it was considered at the Windsor Consultation and since - take ownership of that project and work throughout the system to ensure it happens. At that stage it was thought that the UK Commission would be the appropriate body, but since then the Commission has said it has not got the capacity to be involved in this and in fact does not participate in the meetings on that subject. To some extent DIUS took action but really only saw itself holding the ring because no one else was doing it rather, it is fair to say, than because it thought it was wholly appropriate. One needs the sector skills councils to be fully involved; there is an Alliance for sector skills councils and we thought perhaps that would be of assistance, but that is newly set up and equally does not really have the capacity. We think that in the absence of the UK CES - and that still would be the appropriate body, it was set up specifically to advise the Government on employment and skills and to have an overview of what the sector skills councils are up to - if that is not going to take the responsibility then really it is down to the new department, BIS to take on that task.

Q69 Chairman: That is where the leadership should come from.

Ms Gill: In the absence of anything else, yes, it should. The buck has to stop with the Government in this area; it does not mean that the Government is going to regulate what kind of skills are going to be provided. It is meant to be a demand-led system but it is also widely recognised that there is what is called latent demand. I am not sure whether latent demand exists really, but what it means is that there is a lack of appropriate demand for some of the skills that we are after, whether they are technical skills, the STEM skills, whether they are carbon accounting, procurement, construction, the "Great British Refurb" - it is widely recognised we do not have the skills provision we should have and that something should be done about it. We set that out in our paper, some of the policies are there but the action is lacking.

Q70 Mr Caton: Looking at Government, in your evidence you talk about pockets of resistance within Government preventing action on skills. What parts of Government are showing this resistance, why do you think they are and how do we overcome it?

Ms Gill: Charles, do you want to deal with this?

Mr Seaford: Pockets of resistance may be putting it a little strongly, the more important point is that there is resistance to making it a priority - perhaps I could put it that way - within what is now BIS, a sense that this is not something that we should put resources into, even the quite small quantity of resources needed to drive the policy through, and that is holding up action. It is within the department but it is not an active resistance, it is a passive resistance that actually means that it fails to become the priority it needs to be, to make something happen.

Q71 Mr Caton: How do we overcome it?

Mr Seaford: It is quite simple; ministers have to say that it is a priority and officials have to agree to a timetable for delivery of real results over a nine month period.

Q72 Colin Challen: Is this because really - let us call a spade a spade - the Government sees green jobs to some extent as Mickey Mouse jobs? Real jobs are in nuclear power, in CCS and all the big things, and wind turbines and so on are a bit of a poor relation?

Ms Gill: I agree that to start with, it might have been seen that they were channelling green jobs into environmental industries but more recent statements have accepted that what we are talking about is a transformation of our whole economy and that the public sector, for example, should give a lead. What you are talking about there is, for example, procurement and having the right procurement skills. This is not training apprentices, this is upskilling the current workforce in managerial levels but also engaging the whole of the workforce, and it is also accepted that it is important to bring in the trade unions, the union learning representatives, in this task. We see the need for skills and the Government, certainly in some of their statements, accept it as being a very wide term. It is not just technical and skills and it is not just managerial soft skills, it is engaging the whole workforce, but within that there are specific technical and knowledge issues that have to be tackled. It is not so much that individual ministers do not see that, it is that they do not have a joined-up ownership of how to progress it, and in fact you could take the Prime Minister's document yesterday, Building Britain's Future as an example because if you look at that the issue of investing for a return to full employment is dealt with, skills is mentioned, but not at all in the context of low carbon. In fact you have to go well through the document before you get to the low carbon skills for the future, and there it says: "Our skills policy has two central priorities. First, it will focus on the immediate priority of getting people back into work, ensuring that they can get on and make progress in their careers. Second, in the long term, skills policy and the resources we devote to skills training need to be properly strategic and responsive both to the demands of business and to global trends." That still, at that stage, has not addressed the issue of specific skills or indeed general skills for transforming society to low carbon. That comes towards the end of the document, not joined up with the earlier parts, under the heading "The shift to a low carbon economy" where they do talk about the "Great British Refurb". It is just one example, and one could find it in most of these documents, that there is not a joined-up approach, they do not start with thinking when we talk about skills, if we are serious about transforming our economy, we talk about skills in that context and we ensure that the different bits of Government and the different agencies are joined up in this venture.

Q73 Colin Challen: Looking at the £2.3 billion that we are pumping into the car industry to save it from bankruptcy, would you expect to see more conditionality there on developing these skills that you are talking about?

Ms Gill: Certainly the Sustainable Development Commission thought that there should be conditionality as to the cars that had to be purchased being environmentally-sound low carbon vehicles, which there was not. Obviously if that was done that would then stimulate the market, would it not, for developing the skills to provide those vehicles, so it is quite a good example of policy not being joined-up in our view.

Q74 Mr Chaytor: In the annex to your submission[3] you set out a timetable, which is quite a short timetable of about six months, but you say that by January 2010 the Department and the Commission should have published estimates of the size and nature of the market that government interventions will create. My question is to what extent do you think the source of the problem is that really in Government there is a nervousness about the capacity of intervention to create markets. Is there an ideological legacy here about the role of Government that is the root cause of this lack of co-ordination and fragmentation that you have referred to?

Mr Seaford: Yes, I think there is. We get some signals that there is a reluctance to push ahead - it is a mixture of reluctance and nervousness because people have not done this for quite a long time. If you are going to do industrial strategy there is no one around who has done it since the 1970s, they have all gone, so it is partly an ideological thing but it is also a sense of can we really do this and a lack of confidence. We would encourage the Government to bite the bullet and work with industry obviously - it is something that can only be done in partnership with industry - so that a shared view is developed. It was striking the other day, Tony Hayward of BP saying that he did not think that renewables were going to be viable and that they were pulling back in that area. At the same time we are talking about 30 per cent of electricity generation in this country coming from renewables in the next ten years, so there is a sort of disconnect here and there needs to be a much more active collaboration with industry to pull those things together again.

Q75 Chairman: You have called for a plan to be published in the autumn but do you see anything in the Prime Minister's statement yesterday that would form the nucleus of that plan?

Mr Seaford: There are two things that are going to happen in the autumn anyway, the White Paper on getting Britain back to work and the skills strategy, but we were a bit concerned that the skills strategy was talking about an approach to developing skills and what we are talking about is, this is what is going to happen. Really, the time has gone for developing approaches, we really need to get on to the next stage. We have been talking about approaches for two years now.

Q76 Mr Chaytor: In terms of the Government's levers over either industry as a whole or individual companies or other public agencies, what are the most effective means that could be introduced to hold public agencies and private companies to account and incentivise them to get them to take this issue more seriously?

Ms Gill: In the public sector it should not really be difficult, should it, if there were strong calls for leadership. There have been some calls but not sufficient - it should be built into everyone's performance.

Q77 Mr Chaytor: Are there some mechanisms, performance management indicators for public agencies for example?

Ms Gill: There should be mechanisms, indeed. I was saying to Charles as we came in that I noticed that President Putin in Russia had told the leading bankers that they could not take a holiday unless they increased lending; perhaps that is going a little far but at least it shows the leadership that possibly we need. In the public sector it really should not be difficult if there was sufficient determination. In the private sector some of the leading employers, of course, are doing quite well on this agenda. The more difficult area is the SMEs, so if you take the Great British Refurb it is quite hard to get at those employers and get them to think that they are going to spend money and effort having their workforce - and many of them are individual traders - upskilled. At the moment they probably do need some funding assistance - that is the feedback we have had - that even if they go for the brokers under the Train for Gain system they in fact have to pay and, equally, they are not prepared to put up the money very often. There was talk at the last Windsor Consultation of trying to use supply chains to get down to the SMEs, and there is something in that, but I think its own it would not be nearly sufficient and one actually has to look at how you can assist. If we are serious - taking the example of the Great British Refurb - we want our construction industry, our electricians, our plumbers not just to do the minimum but to understand why they are doing it, because the other point that was made was you actually have to educate householders, because it is no good refurbing their house if they keep their central heating on high, open the window and buy lots of electrical appliances, so it has to be part of a general project. Ideally the plumber and the electrician would go in as missionaries, understanding why they are doing this, and engaging the householder in the project. We have some way to go to get that far.

Mr Seaford: It is an absolutely key point that Tess made earlier about things being joined-up. The nature of this project is such that you have to have a joined-up approach otherwise it just does not work, so it has got to work firstly at the broad level. This is the direction we are going in, we have got to get these very clear signals coming out from Government that this is the nature of the demand in the future. Then you have to provide, at the next level down, help to the small and medium size enterprises so that they can actually respond to those broad signals, whether it is through Train to Gain, advising people on the nature of the skills that are going to be needed or helping with funding. Then you have to work at the level of the consumer and then you have to work at the level of the skills provision itself, and these different layers have got to be managed in synch and held together as part of one project. The danger, as Tess has already said, is that that is not happening.

Q78 Joan Walley: You have given an example of the way in which things are not working in a joined-up, integrated way, but just going back we have had the Government's Commission on Environmental Markets and Economic Performance, so that set out what was going to be a clear approach back in 2007. Then we get to the stage whereby Government has been really firm about the commitments it is making to carbon reduction, so we know that in industry and public sector services at some stage, if we are going to reach that reduced amount of carbon emissions, things are going to have to change. Then in your evidence, particularly following the Windsor meeting that was held, you talked about how industry and public services need to get clear signals from Government as to what needs to be done, but I am still not clear what you are actually saying needs to be done. I would have thought that the regulations need to be put in place so that there is a fair signal to industry that you have got to have fiscal packages within the Treasury, and every single government investment programme that there is - and you just referred to the Prime Minister's statement yesterday - needs to show how each and every new policy or new spending commitment is embracing this green agenda. How is that going to happen, where are the action plans, what does the Government need to do to make sure that industry and public services, rather than face uncertainty as to how this is going to happen, know very clearly what they have got to do and what the time frame is?

Ms Gill: It is obviously a complex question and there is not a short, simple answer because there are a lot of levers that can be used, and I am sure you have already had people talk to you about the role that regulation has, the role that fiscal stimulus has and where things could go wrong. For example, if you take funding for renewables, there are widespread complaints that it is stop start, no sooner have they given some funding to help people put up their solar panels than they run out of funds, and this of course does not help industry. That is an example where it does not work; equally the planning system holding up wind farms. So there is no one simple mechanism because we are dealing with the whole economy.

Q79 Joan Walley: But meanwhile industry is uncertain, it is not getting clear signals, so all the time investment decisions are being made which are locking different industries into spending over the next 15 years. Similarly, private finance initiatives are going ahead which could be doubly expensive, so where is that clear line of direction coming from and what does the Government need to do to make sure that it is there?

Ms Gill: I do not think it is at the moment. It presumably rests with Lord Mandelson, he is now in charge of the major department that is involved here, together with DECC, in looking at long term planning, and this as you rightly say is a matter of long term planning; short term will not help. If you look at Germany there has been long term planning there, there has been far closer collaboration between the banks and industry over a long period of time and therefore industry has felt secure in the knowledge that if they invest in renewables there will be a market for renewables, and we need those kind of long term signals by this Government. It can be done, it is just that it has not been done.

Q80 Joan Walley: When you say it can be done, what is "it"? When you say it can be done what is it exactly that Government needs to be doing to give that certainty to industry?

Ms Gill: For example, on the funding for renewables, instead of having stop start systems so that they run out of funding they ought to ensure that there will be funding - and some of this they say they are going to do more on, do they not, like feed-in tariffs that they are going to be introducing. But every time they introduce an initiative, instead of just being an initiative for a six-month or a nine-month period or a year, but it runs out after six months, each of those initiatives needs to take a longer term view; that needs to be built into their planning.

Q81 Joan Walley: That presupposes then that whatever the political persuasion of the government in power there needs to be buy-in from all the political parties; do you see evidence of that?

Ms Gill: That is a difficult one to answer, is it not? I do not think I am going to attempt to. Charles.

Mr Seaford: No.

Q82 Chairman: But on that point, if we are looking for more, longer term, predictable, guaranteed incentives for renewable energy, that means higher consumer prices does it not?

Ms Gill: It may do but then there needs to be subsidy, does there not, to deal with those that are on the poverty side of the equation.

Q83 Chairman: I am not aware that any political party is now advocating more public spending in this area, so if there are to be more incentives they are going to have to come from the consumers. I mean, the ROs are ultimately funded by consumers, feed-in tariffs presumably will also be asked were they funded by consumers; it would be moiré honest I think if people who are calling for more effort to be made to create green jobs accepted publicly that there is a better chance of getting bipartisan support if you lay on the line a high amount of investment in renewables creating jobs in that area means higher consumer prices.

Ms Gill: We have said that in our Green New Deal document.[4] I am not being evasive here, it is just not my particular area, but I think that is indeed what we have said.

Q84 Chairman: Those people who come to committees like this and say you need a bipartisan approach need to face up to the consequences; we have to educate the public that more green energy means higher energy prices, everyone pays more for their electricity.

Ms Gill: You also have to put it in the context of the alternatives, do you not, that oil is an exhaustible supply, we need security in our energy industry, that there are ways of financing some of this by leasing from the energy supply companies - which are under consideration certainly. You have to put it in the wider context but at the end of the day we all are going to have to pay if we are going to combat climate change to some extent, but the longer term inter-generational consequences of not doing that are so severe that we have to educate and persuade and mobilise.

Q85 Chairman: Yes, you do not need to persuade this Committee of that point but we do need to be very clear that when we are calling for more investment in these areas that means higher prices. It is very important to be honest with the public about this. We had a toy with a White Paper in 2003 about having secure energy, green energy and cheap energy: you cannot and it is important that people who are now calling for more investment should face up to the consequence.

Mr Seaford: Absolutely.

Q86 Colin Challen: I absolutely agree with that and it certainly applies to the nuclear power industry which had its own secret tax back in the 1980s called NOFO - everybody paid it. My question really is continuing this line because our international competitiveness is very important and green skills will be a very important part of that. You have mentioned the German example and the feed-in tariffs and that long term stable approach which has given the signals for a long time ahead, and that is what I would describe as an interventionist measure; it is a pushing measure rather than pulling. You cited cars: if you make green cars then you will inevitably have green skills but that sort of leaves a lot to chance, does it not, so you would be doing more interventionist things to improve our competitive position rather than simply saying as we do at the moment that the market will decide the mix and therefore the market will decide on the skills mix as well which is the inevitable consequence of a choose no winners policy.

Ms Gill: It has to be a mix of the two, does it not? Government must take the lead, it must provide the framework, it must provide the regulatory regime, it must give the right indicators as in the example of cars in saying we will provide funds provided that they go towards certain green products or environmentally sound products; that would stimulate the market. It has a huge weapon in public procurement, which is probably a bit under-utilised at the moment, and if we had environmental requirements built in more than they are currently, right down supply chains for the public sector, that would be a very powerful market stimulus. It would not leave matters to chance but should not have any adverse consequences in terms of being stop-start or any other disadvantages that one can see.

Q87 Colin Challen: The market-based approach does seem to have failed us and if you look back to the privatisation of electricity generation the investment in research and development just plummeted to practically zero. Should we be taking really strong interventionist measures, should we move away from giving hints and signals as we are at the moment? As you say, they all seem to run out of steam after about six months. What more could be done on that front if that is to be the successful approach?

Ms Gill: It has to be a mixture. Some parts of the private sector are undertaking quite good measures so we are not talking about changing to a command and control economy, but we are talking about Government through the public sector and through giving the right support and indication to the private sector being able to move forward. I am not sure whether you are prompting me to say that we should fundamentally change the basis of the economy because I do not think we would go that far.

Q88 Colin Challen: It might mean directing a lot more to happen. If climate change is as serious as our leaders tell us it is and the science certainly does, surely we should be taking more of an interventionist approach with a lot more planning and a lot more direction from the centre to say right, we are going to have to exceed our targets on insulation therefore we will have to train X number of people to do it rather than simply saying we will have a target with some financial support mechanisms and then we will just throw it all into the air and see how it lands.

Mr Seaford: I would agree that we need to be rather clear that we need so many thousands of people to do this and so many thousands of people to do that, but that is not something Government should do in a sort of ministry of planning in Victoria Street, it is something that has to be done with industry, we would suggest, and the people who actually are doing this already. You say should we not move over to a much stronger interventionist system, we would say that the intermediate model has not really been tried yet, we have not actually got a proper system of indicative planning working at the moment, and I go back to the point I was making about Tony Hayward. We do not actually have at the moment a way of working with industry that allows us to map out how things are going to be, and until we have done I do not think we should go straight over to more command and control personally; that would be our view.

Ms Gill: To take an example where more regulation probably would assist, if you take the Great British Refurb at the moment we have got standards for new build and we have said all along well actually 90 per cent of our buildings are existing buildings. We would like to see the process of regulation to upgrade existing buildings together with some form of finance for those who could not afford it, either by lending - that might be quite a good mechanism - or the upfront costs to be recouped through saving money through energy efficiency and so on, with perhaps some imaginative programme to speed up that whole process, because that would be a big step forward in moving towards our overall targets. Government could certainly move faster on that than they are and it would then be a mixture of providing the regulatory framework and would enable the construction industry to know funds were available, so they would be stimulated to do something about upskilling their work force.

Q89 Dr Turner: You want the Government to have a green skills policy, you want to see a pull-through of green jobs. Probably one of the most effective connections we can make is to ensure that there are companies crying out for people with green skills, but that is simply not happening at the moment because although the Government has paid lip service to a green industrial strategy it has not set out any ways of actually bringing it into being. Can you tell us the sort of things you would like to see the Government doing to achieve that?

Mr Seaford: There are certain areas of activity which the Government can influence and that industry cannot. Government could say right, we are committed to ensuring that there will be a higher carbon price, a properly-formulated indicative carbon price going forward.

Q90 Dr Turner: But we are not committed to any such thing are we?

Mr Seaford: I know we are not, but you asked me what we should be doing.

Q91 Dr Turner: Sorry, I thought you were indicating the Government were.

Mr Seaford: That is the problem, if there is not a clear indicative carbon price for the future then obviously businesses cannot plan and businesses themselves are crying out for some sort of clearer signals about what a target carbon price might be. That is the first point and that applies across the economy. Then you have got the specific programmes that Tess has been talking about - refurbishment, the Great British Refurb and so on and so forth - and those could be made much stronger and the targets made much stronger and harder: these things are going to happen by this date and that is going to require the following kind of industrial investment. The point I was making earlier was that by working with the relevant industries we can work out some form of industrial plan in key sectors like the building industry where real progress can be made. Then you have renewables, which we have touched on, and as the Chairman said a little bit of honesty about the consequences of that, but in the context of a higher carbon price that may become easier to do. There are then programmes like electric cars, which are already underway, with a clear commitment to investment in the infrastructure, and any other sectors where infrastructure investment is going to be important. You can see there is a combination of measures, a general commitment to an indicative carbon price and then a commitment to a set of regulatory and fiscal incentives in specific sectors and investment which will drive industry to do what it needs to do. It is not rocket science.

Q92 Dr Turner: We know it is not rocket science and, as you have already referred to, the Germans have shown us for the last few years quite clearly how to do this. It is quite simple, it is certainly not rocket science, and although it costs it does not cost any more than, for instance, our own renewable obligation does to deliver far less. Do you see any sign of the Government carrying out measures as clear and effective as the Germans have in creating the market conditions to create success? Germany's wind industry and solar power industry between them must be worth about 250,000 jobs but we have nothing comparable in this country at the moment, although we have the opportunities surprisingly enough. Have you seen any sign of the Government doing this and how would you want it to do it if you did?

Ms Gill: We have set out that we would want them to start off with some kind of timetabled plan in the context of skills, which is our particular area, to drive this forward. It is not in our area of expertise to lay down everything they should do so that we should rival Germany, although it would be delightful if we could. We can all see examples around us where they plainly are not doing that, not just in the area of renewables and the Great British Refurb, you can look at our transport system where, certainly in the Sustainable Development Commission, we are keen they move forward on the electrification of the railways, but if they are going to do that then they obviously have to make sure that the grid supports that and that we have green electricity. There are therefore many areas where one would want to see - and we have produced detailed policies in some of these areas which we are very happy to share with this Committee on steps we think they should take.

Q93 Dr Turner: I am beginning to understand the difficulties that the Government has in seeing a clear way forward if bodies like the TUC cannot.

Ms Gill: We are not the TUC.

Q94 Dr Turner: Frankly, you have not come up with anything tangible.

Ms Gill: We are not the TUC.

Q95 Chairman: This is the Sustainable Development Commission.

Ms Gill: You are going to hear from the TUC and perhaps they will satisfy you more but it is a little unfair to say that we have not come up with anything tangible.

Q96 Martin Horwood: Can I just come back to Charles. You have just now, very rightly, identified the indicative carbon price as a really key driver of green jobs that would drive investment but if you are not in favour of a command and control economy what exactly should Government or even the European Union do to intervene to support the carbon price if it drops too low, as it has done in the past.

Mr Seaford: I am not an expert in managing the carbon market so I do not have a proposal up my sleeve to present to you. I was merely asked what would drive an effective low carbon industrial strategy and I mentioned a clear indicative carbon price as something that is necessary for that to happen, but in terms of how it would actually operate I assume that there would have to be some market intervention in the way that you have an indicative price for sterling, but I am not an expert in that, sorry.

Ms Gill: It is generally recognised that the Government as part of the EU system is setting the carbon price and so far it has not worked, has it, but it is hoped that it will work in the future.

Martin Horwood: That is probably something we will have to explore with other witnesses I guess.

Chairman: Thank you very much indeed and also thank you to your colleagues in the SDC as well for the work that has been drawn on from time to time.

Memorandum submitted by Trades Union Congress (TUC) (GJS16)

Examination of Witnesses

Witnesses: Ms Sue Ferns, Member of the TUC General Council, and Mr Philip Pearson, Senior Policy Officer, Trades Union Congress (TUC), gave evidence.

Q97 Chairman: Good morning and welcome, and for the avoidance of any doubt we know that you are from the TUC and not the previous witnesses. Can I start with asking you, in America there is some co-operation between trade unions and environmental groups campaigning for policies to ensure that green jobs benefit low income groups and deprived communities. Do you see any progress being made here by the Government on that agenda?

Ms Ferns: There is certainly co-operation between the trade union movement, the TUC, and some green groups on this agenda. For example, we are working with the Green Alliance, we have been working with some of the campaigning groups, Friends of the Earth and so on, so there is some progress really from our side of the table. What we are very keen to see in terms of a transition strategy is that all the social partners are involved in that kind of dialogue, and certainly there is a call in the European Trades Union Congress for that kind of social partner dialogue to take place, and we think that is absolutely key.

Q98 Chairman: Is the Government engaged in encouraging this as well?

Ms Ferns: Yes, absolutely. To be fair, we do have engagement bilaterally with the Government through the Trade Union Sustainable Development Advisory Committee, so those dialogues are happening in the UK, they are just not as joined-up as they might be at the moment.

Q99 Chairman: Do you think this whole process could be used to, I suppose, raise awareness of the environmental challenges and perhaps generate more support for greener policies. Is the discussion about green jobs a way of building public support for a greener agenda generally?

Ms Ferns: It can be, yes. Certainly in terms of the trade union movement's dialogue with green groups at the moment, historically there has been that suspicion that unions are only interested in jobs. We have moved on from that and we have genuinely shown that we are interested in green jobs and are having a proper dialogue with the green movement about that, about where those jobs might be created, what support might be needed in areas where jobs potentially are going to be lost, so I do think we have moved on on that. Also, it is not just at national level, at the level of the workplace there are a lot of our representatives who are acting as environmental representatives in the workplace, raising issues about jobs and skills, so we are building the dialogue from the bottom up as well as from the top down.

Q100 Mark Lazarowicz: There is a wide range of estimates of the number of green jobs that could be created in the UK. Do you have any views as to what numbers we are talking about potentially?

Mr Pearson: Obviously you are aware of the global estimates of 400,000 plus jobs that could be created; the difficulty is knowing sector by sector really what is going on in the economy now. There is a lack of what in European terms is called an observatory, an understanding of where the growth is happening. We know we are losing jobs when companies such as Vestas on the Isle of Wight threaten closure for particular reasons which need to be addressed; and we know too that the London Array presents job opportunities. Across the energy sector, whether it is wind or tidal or clean coal or new nuclear; clearly there are opportunities that are going to emerge, in the industry generally and in the supply chain of those various developments and in others, such as cars. We know that there are opportunities sector by sector and there are some commonalities in policy, but what we do not know is what is going on. My colleague's comment about a social partnership body, that should be the body to which information is supplied. It should be in the public domain so that we understand where growth and decline are taking place. There will be job losses in sectors under carbon pressure, but there should equally be growth in sectors where carbon pressure produces opportunity. It is difficult until we get into the growth numbers to be able to say whether this 400,000 is fantasy or is going to be the reality we face.

Q101 Mark Lazarowicz: That is what I am interested in finding out. We have this global figure; do you have any views as to how accurate that is and do you have any information which allows you to produce your own figures, either globally or for particular sectors? Is there any likelihood of that at all?

Mr Pearson: There were two sectors where we had worries. On the wind estimates, from the conversation we had with the British Wind Energy Association, we think they are over-optimistic, we did not recognise the numbers. On carbon capture and storage nobody knew where the Government's figures came from. We understand that the consultants have drilled down and down and down to the lowest level of data and have built up a base and said "No, it is really that big", so maybe they know more than we do, but there really have been doubts over those two areas. The proof of the pudding should be in the eating so to speak and so when these jobs emerge and are delivered then we will really know where the growth is coming from, but at the moment we do not know because of this lack of an observatory or a monitoring function shared between the social partners. Our desire is to see this information out there and tracked over the years.

Q102 Mark Lazarowicz: Are you aware of any work that has been done to assess what type of jobs might actually be lost in the transition to a low carbon economy? We are talking about new green jobs but what about existing jobs that will either have to change or just disappear? Have you any news on that or any research yourself?

Ms Ferns: We know there is evidence about job losses in heavy manufacturing and in industries like steel. At the moment what is quite difficult to disentangle is how much of that is due to the economic downturn generally and how much of it is due to green pressures. Our evidence from the unions involved is that certainly there is some element of environmental pressure there and concerns, for example, in relation to emissions trading schemes about carbon leakage and so on which is causing jobs to be lost.

Q103 Mark Lazarowicz: Have you got any specific figures you could give to us to help inform us in our discussions about the situation?

Mr Pearson: No. We cite in our evidence the European TUC study across 13 nations, undertaken about three years ago, which said in conclusion that jobs gained and displaced will vary between sector over time and over place. That is the big picture but clearly there are jobs under pressure because of the recession and there will be some climate pressure, and we just need to track it. There is no study done that is reliable, we just know that there are sectors that are vulnerable and there are sectors with greater opportunities. We just need to get into a sector perspective quite quickly.

Q104 Joan Walley: Can I just pick up on what you just said about the observatory and the tracking of jobs? There is that kind of information available in terms of jobs already, is there not? You just mentioned the observatory and the monitoring of jobs that are there.

Mr Pearson: That is the recommendation from an ETUC study for the European economy and we would say there should be one in every country; there is not one in Britain as far as I know.

Q105 Joan Walley: Okay, I just was not clear about that. In respect of job losses that there might be which you think might be attributable to the downturn anyway, setting that aside how do you think the Government should manage the redeployment and retraining of workers from traditional industries, because if that is going to be necessary how should Government be doing it?

Ms Ferns: That depends a bit on what the jobs are that are being lost because I do not think there is a single one size fits all solution for all jobs, but the kind of things that we have been talking about is support for training and development, maybe support for relocation packages. In some cases these will be technical-based or engineering-based skills actually that do not require a huge adjustment from the workers to move from one sector to another, whereas in others you will be training people from scratch. The key thing here is to make sure that people are properly supported to do that in terms of training and development, maybe support for communities and transition packages to enable people to move into those new areas of employment.

Q106 Joan Walley: In your evidence you make reference to a TUC green workplace survey. Have you done a lot of surveys of this kind and have you done any surveys that would just focus on a traditional manufacturing area where you are trying to get more information and trying to track more what is happening about this whole issue?

Ms Ferns: The latest TUC green workplaces survey was a big cross-union survey done by the Labour Research Department and there were 1300 responses to that, so that gives quite a good snapshot of what is happening at the local level. What we have not done is aggregated that into a sector by sector study at the moment.

Q107 Joan Walley: Can I just ask whether or not you feel that the incentives to encourage industry to re-skill the workforce are having their desired effect, or could more be done to incentivise transitional arrangements for workers to move towards greener skills?

Ms Ferns: More could be done. In the earlier evidence session what was alluded to in terms of what is currently available for new skills - much of it funded by the Learning and Skills Council - that is focused on a particular set of targets which are not absolutely congruent with the objectives you need to meet to get more green jobs and green skills. One of the things we hear consistently is that although level two skills are important, actually what is key to a lot of this agenda is level three skills and skills above level three, and they are not being incentivised at the moment. There are also issues that do arise about whether you have to incentivise workers to achieve a full qualification or actually take into account what the skill base they already have is in terms of topping up their skills. At the moment there is a lot of emphasis on formal qualifications - I know that has become a bit more flexible - but probably you do need a more flexible approach, taking account of the worker and not just the target that has to be met.

Q108 Joan Walley: I would be interested in knowing what support the TUC can give to individual unions, for example I am thinking about the trade union UCATT. In my own constituency we have a college where we have a construction skills centre, the Seven Centre, and it is obvious to me that more needs to be done to work with the trade unions, on top of what is already being done, to bring in and introduce the training on the green skills levels. Is that something that you have got particular skills at within the TUC to assist that kind of transitional arrangement?

Ms Ferns: There are potential sources of those skills. There is a well-established army of union learning reps now, over 22,000 of them, who have been helping workers into new skills and new jobs now for a considerable period of time. They can do that as regards green skills just like they can for any other skill. We also have a growing group of environmental reps with a particular interest and a particular knowledge around the green agenda.

Q109 Joan Walley: Do you train those centrally?

Ms Ferns: They are trained centrally. The problem that they face at the moment is that they do not have any time at work officially to do their duties, so they are a bit held back by that barrier, but the TUC does provide training and individual unions provide training for that group of people. What a lot of unions are also doing now is working very closely with the new national skills academies and getting information via union learning reps about opportunities available there too.

Q110 Joan Walley: Can I think just pick up on that point because in recent discussions I had with the Chartered Institute of Environmental Health they were really alluding to the fact that if there was provision within the legislation for trade union learning reps to have the same approach towards the green skills agenda as they have perhaps towards health and safety, that would be a way of encouraging and promoting greater awareness about the need for change. Is that something that you are looking at?

Mr Pearson: We must not confuse union learning reps, who have clear provisions in statute, a body of 22,000 people who are developing and promoting skills at work: and then the role of green environmental reps: and then the role of health and safety at work reps. There are three roles. Of the last two you were talking about, health and safety at work, shop steward safety reps are recognised under the Health and Safety at Work Act 1974, and they have various rights and responsibilities working closely with employers - that is clear. What we have been arguing for concerns this growing interest among shop steward safety reps and some union learning reps to pick up the green agenda at work and promote the provision of skills, whether full qualification or that shorter list of qualifications needed to green their job. What we have been arguing for is that environmental reps need to be put on a similar footing.

Q111 Joan Walley: That was the point I was making.

Mr Pearson: I am sorry if I have not been very clear about that, but a similar footing is what we need so that they would have a right to appropriate time off, more training, working with employers to have a joint group. We identified 200 joint environmental committees in the workplace that have been set up.

Q112 Joan Walley: You would support the statutory provision of reps on that basis.

Mr Pearson: In brief, yes.

Ms Ferns: We would.

Q113 Mr Caton: Returning to the need for a sector perspective that you identified earlier, Mr Pearson, in what sectors does the TUC expect the most jobs to be created in a green economy?

Mr Pearson: The energy sector and cars. The Committee on Climate Change set it out: it is decarbonising energy, it is transport and it is efficiency at home and at work. That is the agenda for growth in a word, so you tie in the Government's target of a 34 per cent cut by 2020,[5] the Committee on Climate Change has delivered that in terms of sectors. We had the first of the five-year carbon budgets this April; that is the territory - energy, cars and energy efficiency.

Q114 Mr Caton: What more can the Government do to encourage job creation in those sectors?

Mr Pearson: Sue and I would both like to answer that but can I just mention carbon price first? Without that driver we are going to progress at insufficient speed. The price of carbon now is €10 per ton on the market; it does not work. I know frighteningly high prices of carbon are being talked about but the idea of a floor price needs to be thought about really seriously, and commentators such as Dieter Helm have argued for that. If there is a reserve floor price in the market - I just do not see why we cannot use such a mechanism, because there needs to be a driver from the bottom. There may need to be some kind of escape valve at the top, which has been part of the American discourse. There is a fear in the American industries and the American unions about the carbon price getting too high, but actually we are in completely the opposite ball park: it is too low, too soft, it is not driving change. That would be my first point.

Ms Ferns: I absolutely agree with that. Just to add to that, I think having an appropriate regulatory framework more broadly is important too, certainly in the energy sector where the union I work for has thousands of members. We know that Ofgem's role is to deliver cost-efficient low price solutions for the consumer and we have evidence that that is holding back investment in skills development. That is skills development that needs to take place now because of the state of the energy infrastructure, but the regulatory framework just is not appropriate for that, so we do need to change that as well.

Q115 Mr Caton: Should conditions be made most favourable for the greenest industries or those that create the most jobs, or is that not necessarily a trade-off?

Mr Pearson: I would have to think about that a little bit. My instinct is that the fundamental issues are about the price of carbon. I do not see how you can really avoid that being a uniform driver; it is essential. You get into issues such as the free allocation of allowances within the EU Emissions Trading Scheme, which is a balancing act, and that may be partly addressing what you are thinking so that some of the pressures are taken off some sectors that are exposed to international competition. In that sense, yes, we would support a more flexible approach but the need for a floor price would be fundamental.

Ms Ferns: Can I just add to that and say I do not think there is a single industry or even a few industries that are going to solve this. What we need to do is we need to green across industry and across the economy. I agree with what Philip said but you need to think about the economy as a whole and embed this agenda into actions that all industry takes - there is not a single approach that is going to solve this or a single industry that is going to solve it.

Q116 Mr Caton: The whole history of economic development in Britain has seen huge regional variations. In this new greener economy that you are talking about, Ms Ferns, are there going to be those same regional variations and can you at this stage foresee what is likely to happen?

Ms Ferns: Inevitably, there will be regional variations because we are not starting from a clean sheet, are we, we are starting from a regional picture that varies now with different skills profiles, different industrial profiles and so the transition we make is from where we are now, which may or may not be where we want to be, to the future, so inevitably there will be regional variations. We know, for example, that a lot of work has gone on in Yorkshire and Humberside about a regional approach to carbon capture and storage; we support that in the TUC, we think that is an important regional contribution, and clearly in this regional location there will be other types of energy industry. There is an energy partnership in the eastern region and I do not think there is anything wrong with building on what is already there.

Mr Pearson: I would reinforce that. We understand from the low carbon industrial strategy in the making that it will have a strong regional component to it reflecting, for example, the energy opportunities in different regions. Sue has begun to outline two or three regions where there are partnerships or strengths; every region has got unique opportunities and every region has got huge unemployment problems, so they need to be matched.

Q117 Martin Horwood: Can I just repeat the question that I asked the previous witnesses because they also pointed to the carbon price as a really crucial driver in all this. Short of trying to negotiate with all EU governments to redesign the Emissions Trading Scheme and reduce the amount of licences, in the short and medium term, what kind of intervention would you use to support the carbon price and stop it dropping too low. How do we actually do that?

Mr Pearson: It is a matter of political will, is it not? The mechanism needs to be changed to introduce by political agreement the idea of a floor price, which would effectively be a carbon tax, and the level of that tax should reflect, ideally, a kind of a judgment on the driving price needed to deliver this pace of change you are looking for. That pace of change has been set by the Committee on Climate Change, they have told us what we have to do by 2022. We have to cut down to 520 million tons of CO₂ and keep going, and we need a carbon price that gets us there. We do not have one at the moment. I am sorry if this is a general purpose answer but if I was asked I think the key thing is to introduce the concept of a floor price or tax, but it has to be a price which has some scientific and economic justifications, some industrial value to it - not just a random choice but a price which would be acknowledged as being the right price for carbon, to replace one kind of energy with another, to stimulate investment in one kind of car as opposed to another, those kinds of issues, internalising the price of carbon.

Q118 Mark Lazarowicz: How would you envisage such a floor price being maintained?

Mr Pearson: Once set it is a question of judgment. The key evaluation that you put against the price that you determine is, is it making a difference?

Q119 Mark Lazarowicz: How would you make sure that that was a floor price?

Mr Pearson: The Treasury set the social cost of carbon at £70 a ton a few years ago.

Q120 Mark Lazarowicz: What I am getting at is how would you actually bring that about. You cannot simply say that is the price, you have to get that price to actually be a reality. How would you do it?

Mr Pearson: You would need to consult, would you not, between industry, social partners, the experts. Charge the Committee on Climate Change to do it; that is what they are there for.

Q121 Martin Horwood: That is not what they are there for, they are there to advise on policy but we are asking you what the policy suggestion would be. You seemed to suggest a minute ago that you were talking about a carbon tax that would kick in if it reached a certain level.

Mr Pearson: That is another word for a floor price, carbon tax. It is those kinds of changes to the system so that it has the ability to drive change.

Q122 Mark Lazarowicz: What I was getting at, and Mr Horwood as well, is that you get a carbon price in a number of ways, perhaps by a carbon tax, perhaps by buying back allowances. I just wondered what your view was, how you would actually bring about that floor, how you would actually make sure that was the price that the market operated at.

Mr Pearson: Of the options you have already touched on there are two that are most likely. Starving the supply of allowances clearly would be one way, shortening the supply, so the Government would not release its allowances to the market which should have an upward effect on price.

Q123 Dr Turner: You are looking to wind energy and turbine production as promising areas for producing job growth. Why just wind when the plum opportunities in wind energy are long gone? The Germans have got that. We will get some jobs out of that but turbine development and manufacturer is a horse that bolted a long time ago because we failed to back it in this country. We have the world's best energy sources in terms of wave and tidal stream of any country in the world. We also have a nascent industry waiting to exploit that and teetering on the edge of extinction. What potential role do you see in the TUC for that in the future, because if we exploit it it could be worth many gigawatts and outplay wind power as far as the UK is concerned in terms of job creation and economic benefit. I do not detect any sympathetic noises even from the TUC towards developing that sector. Why not?

Mr Pearson: Do you mean the tidal sector?

Q124 Dr Turner: Yes.

Mr Pearson: In 2005 we published a report called Greening the Workplace[6] where we argued for the government to give far greater support to the wave and tidal power sector. We invited one or two of the major investors to our conference which we held in 2005 with the CBI prior to the Energy White Paper. We have a fairly strong track record in backing that industry. You may not be aware of that, but we do. It is an industry with huge opportunities but we are where we are. The Renewables Advisory Board, which I attend as an observer, clearly is determined to help the government achieve its 2020 targets. They do see all the renewables contributing to that. I would agree with you. In this country, I think we have grossly under estimated the potential of wave and tidal power to generate industrial opportunity. Therefore, Portugal is making stuff which is invented in Britain. The danger is we will lose those opportunities. I could not agree more.

Q125 Dr Turner: It would be nice if the TUC made some loud noises about that or precisely what you say is going to happen and this would be an absolute tragedy. Also, it would undermine our chances of achieving our renewable energy targets by the bye. It would be nice if the TUC made a lot of noise right now to help that. It would be very apposite and I hope you will. You are also looking to nuclear and clean coal technology as job sources. They are both sectors with drawbacks. They are effectively interim technologies. The next generation of nuclear reactors that are built will probably be the last nuclear fusion reactors ever built because if we continue with nuclear power fusion, it will be ready by then and clearly no one would build a fission reactor if they could build a fusion reactor. CCS, essential though it is, is essentially a sticking plaster because so many economies are dependent on using coal but it is short term. Should we not be looking for and promoting longer term opportunities? I am not suggesting that we should dismiss stuff in the interim or not make the most of it, but should we not be focusing on the long term?

Ms Ferns: In response to that, in the short term we have to focus on security of supply as well as meeting climate change targets. Whilst renewables have much more potential in the longer term, we do need those technologies. We do need nuclear to ensure security of supply. Therefore, it is important to us that we get the new generation of nuclear power stations. In terms of coal, it is really important that we look on a global scale because, whatever happens in the UK, there are coal fired stations being built throughout the world in China, India and elsewhere. We can make a huge contribution in terms of CCS technology in the UK quite apart from trying to ensure that it is applied worldwide. That will make a huge difference to global emissions. It is a very important industry for that reason.

Q126 Dr Turner: Do you think the government is doing enough for us to be effective in the race to provide CCS technology throughout the world? Do you think that what we are doing is going to be sufficient to enable us to retrofit all of China's several thousand gigawatts' worth of coal fired power stations for instance?

Ms Ferns: I do not think anybody knows the answer to that today. We were encouraged by Ed Miliband's statement which expanded the opportunity compared to that which previously existed in terms of four demonstration plans. Of course we would like to see more and of course the technology does need to be proven on a fully commercial scale. In contrast to your example about the wind industry, we are at a very early stage when there is everything to play for. We are very keen that government, industry and trade unions play their part in making sure that we maximise and test that as far as we can so that those opportunities do exist and we can realise them.

Q127 Chairman: On the first part of that question from Dr Turner, do you still see however opportunities in wind energy and turbine production, notwithstanding that the Germans clearly have a huge lead here? Is there still the potential in this country to get significant job creations in those sectors?

Mr Pearson: The short answer is, it is huge and the faster we move the greater the opportunities will be. What would be nice would be to have a clear idea of the kind of wind industry we are after in the UK: big, medium sized or small? Make it all? Do it all? Half way there? We import some, or are we just on the far end of the process and we assemble in the water? Clearly, the more we do the more jobs there are and the greater the industrial base there will be for the UK. The IPPR has produced a really excellent study on those very scenarios. Let us go for the high one. That is what the Renewables Advisory Board would ideally like to see happen. There are still blockages in the system. I do not know whether you are taking advice from them but it is such a crucial sector. They all are really. The whole balanced energy policy that we adopt with nuclear, clean coal, a suite of renewables, clean gas, is important. Renewables seem to draw the most interest and attention and for that generation of younger people coming through into the labour market perhaps it does have some greater appeal. We should be doing as much as we can to get a sense of the industry we want and then go for it. After all, we know what other countries have done, particularly Spain with its very stringent procurement policy. You set up a wind farm in this region and there are regional procurement requirements that the stuff is made in Spain. Portugal is going down the same route. We had a meeting with the Secretary of State for Energy and Climate Change just a couple of weeks back where we were talking about the Spanish example. The Minister clearly is attracted to that. He was a little slow on the official side about what Spain are doing which is rather surprising because it is written and talked about. It clearly could provide the kind of policy framework to get us there on the high option, which is what we would really want to see. There are tens of thousands of jobs with the high option. That is the key issue.

Q128 Martin Horwood: I am warming more to you on clean coal and renewables than I am on nuclear. That is more likely to generate French jobs than British ones. You say that large scale public works should make a major part of any big push for green jobs as well. Given that there are so many other tools on offer to stimulate private sector investment through targets, regulation and even investing directly in the private sector, what is the particular value of public works?

Mr Pearson: It depends where you want to start. Renewing the grid and creating the CCS grid. There clearly is a role for a public sector framework to achieve those new structures. Investing in the first, if not more than the first, CCS project is a public sector investment challenge.

Q129 Martin Horwood: The National Grid is a private company and it could be invested in.

Mr Pearson: It is a private company but you do wonder why, if the opportunities are that big, there is not yet a move by the National Grid to really accelerate its activity in this area and demonstrate not only to UK industry but to Europe that it can be done. If a hold back is again because of finance problems, is there a role for the government and the European Investment Bank? I do not know, but there needs to be some support for the private sector to get some of these major new investments going.

Q130 Martin Horwood: Is there any evidence to suggest that public sector spending is more effective than investment in the private sector?

Mr Pearson: I do not think we would be arguing the case of more or less effectiveness. It is just getting the shovel ready, getting stuff done, getting pipelines down, getting the first turbines built. That kind of example seems to require forms of public investment so if that is the case let us go for it. That would be our view. It is not trying to separate this from an ideological position. It is a utilitarian one. If the private sector has a role to play, let it play it in bringing forward these technologies.

Q131 Martin Horwood: I should probably refer Members to the register of researchers' interests as there is a reference to the National Grid.

Mr Pearson: I do not understand that.

Martin Horwood: You do not need to.

Q132 Mr Chaytor: Do you think there is a problem for the TUC and for its constituent trade unions in really advocating the transition to a low carbon economy, because the historic role of trade unions has been to protect and defend. If I can give an example, our previous witnesses made a comment about the car industry not being dependent on the manufacturing of low carbon vehicles. How would you view this? Would you think it would be a good initiative for government to have made its financial support for the car industry solely dependent on the production of new models? What would have been the impact on Ellesmere Port, Luton and other plants if that were the case? Do you see the point I am trying to get at? I just feel that maybe as an institution you have a difficulty here because your primary role is to defend the status quo, not to argue for significant change.

Ms Ferns: I do not think our primary role is to defend the status quo. We clearly do have a role in defending members' jobs and at the moment the issue is that members are losing jobs with nothing else to go to. Our view in relation to the low carbon economy is that we just have a transition programme in place, we will be very forward looking. What unions want to see is good, high quality employment opportunities. At the current time people are losing their jobs in the car industry and they have nothing to go to. If there was a better framework and a transition strategy that allowed those people to reskill and, if appropriate, to move into new industries or new sectors, that is what we have been arguing for.

Q133 Mr Chaytor: One of the easiest ways to generate new jobs with fairly modest skill levels is through a national domestic insulation programme. A number of local authorities have been quite proactive on this. It currently seems to be the leader in the field. Why is it so difficult? Why is this not just part of the normal functions of local authorities supporting schools, delivering social services, cleaning up the streets and doing the refuse? What is so difficult about getting a national programme? Why are only so few local authorities really motoring ahead on this, do you think?

Mr Pearson: They are given a variety of sustainable development targets to adopt. Is there a clear enough central direction here? Should there be a much clearer target and expectation for home insulation work done? We all recognise the scale of the problem. It is huge. The role of local authorities would be to provide quality assurance as to the work done, to provide a better indicator of the number of jobs being created, a more reliable channel. That is not to criticise EAGA, the agency that does a lot of the Warm Front work. It is doing splendid work but we have argued in our budget submission for there to be a much more proactive role for local government in this area. Local government is interested in taking such a role. The LGA's pre-budget submission this year identified 70,000 jobs in a substantial, long term, ten year, £5 billion programme. That is where real jobs at a local level will be generated right across the country. The advantage of local government is it understands the problems in its area, on the estates, in the Victorian houses and the Victorian terraces. Home insulation challenges are different, dwelling by dwelling and type of dwelling by type of dwelling. Local authorities are really well placed to ensure that the appropriate standards and approaches are taken to gain householder confidence. After all, if you get people going into your home and changing it, you need to be confident that competent people are going in with the technology skills but also the consumer relation skills that are involved in persuading and discussing how this technology works once you have it in. There are a lot of skills in there which at the moment are not being brought together in a national approach to this problem.

Q134 Mr Chaytor: There could be a case for local authorities with stronger targets from the centre?

Mr Pearson: We have heard that talked about a lot, yes.

Q135 Joan Walley: It is interesting to note that in my own constituency Eon claim that they insulated over 3,000 homes as a result of a Warm Zone scheme which we spent some time trying to get set up. What you are saying is that there is a huge amount of more potential from operations of this kind to create far more jobs. That brings me on to my question as to how the government has set up the new skills sector for power workers. How is that going to make a difference in terms of getting the skills that are needed to carry out work of this kind?

Ms Ferns: Are you talking about the National Skills Academy?

Q136 Joan Walley: Yes. I am talking about the National Skills Academy for Power.

Ms Ferns: It is not yet in being. There are still funding issues that are being dealt with at the moment. There is a business plan but it has not been signed off yet, so it does not exist at the moment.

Q137 Joan Walley: Whose responsibility is it to sign it off?

Ms Ferns: I do not know whether it is the UK Commission for Employment and Skills. I am not quite sure who has formal signing off responsibilities for the skills academies, but what I do know is that there are still discussions going on in energy and utility skills, which is the sponsoring Sector Skills Council. A lot of work has been done and it is pretty close to being there but there are still some issues to be resolved, so at the moment it just does not exist.

Q138 Joan Walley: Do you know what those further discussions are that still have to be resolved?

Ms Ferns: They are around funding and resourcing, as I understand it.

Q139 Joan Walley: Assuming that it does get signed off and set up, what will the actions that it is intending to take do to fill the skills gap?

Ms Ferns: Because all the major employers in the sector are signed up in principle to the Skills Academy and to working together to resolve skills issues, that is where it will make the key difference. The history in this sector has been very much in recent years of employers each doing their own thing and poaching from one to another in terms of the skilled staff that they need. There is now a recognition that that is not going to resolve the skills issues. A preparedness to work together and in a more coordinated approach will be the real value of the Skills Academy in this sector.

Q140 Joan Walley: Can I turn to industry and what industry is doing? It does not seem to me that industry has been very good at articulating the skills that it needs to make this transition to a low carbon economy. I think that brings into question a demand led approach to skills that has dominated the policy. Given the importance of this, what do you think the further action could be to bring in this low carbon economy because we do have these skills gaps that do not seem to be targeted by government or industry? What more could we do to close this gap?

Ms Ferns: I absolutely agree with that. The demand led approach has not worked well in terms of low carbon skills. The report that Defra commissioned about 18 months ago on this has some very useful recommendations. It is really highlighting the need for a coordinating body or strategic body to do the analysis, to get the labour market information and then to really drive forward and make clear what those skills needs are and to assign responsibility for ensuring that people are skilled up to meet those future demands.

Q141 Joan Walley: Everybody is arguing for a joined up, integrated approach and bringing it all together but with each and every one of these initiatives there is no leadership role defined. 18 months on or however long it has taken, how has this been done? Who is championing this? I referred to the National Skills Academy. It is about will in the future. It is not there yet. How are we making sure that this does get done? Surely that is government's role? What more pressure could be put on government to get that done?

Ms Ferns: I could not agree more with you. We do think it is government's role to do it. I know the previous witnesses talked about the role for the UK Commission on Employment and Skills which could be the right body to do it, but the key thing is, it needs some central point in government to take responsibility for this. The problem is this is not simply an issue for the department that deals with skills; this is an issue across government because it applies to all industries and to all sectors. We hope that when we see the low carbon industrial strategy it will have something very positive to say about this because at the moment we simply do not have those mechanisms and we do need to have them.

Q142 Joan Walley: Which statement is that?

Ms Ferns: When we see the new low carbon industrial strategy which I understand is due out either in the summer, in the autumn or before the end of the year. The sooner the better as far as we are concerned. We do need to see some clear leadership in that and maybe now we have a department that is responsible for business, innovation and skills that is the right combination to take a leading role here. We do need to see that clear statement in the low carbon industrial strategy because we lack it at the moment.

Q143 Mr Chaytor: We touched on the question of domestic insulation earlier as an easy way to create new jobs. Are there other sectors where new green collar jobs could be created cheaply and quickly?

Mr Pearson: My first answer would be in the workplace through energy efficiency and other initiatives around sustainable production, which is really an essential message of the work we have just reported on - through what we call the greening the workplace strategy. Every time you use an energy saving device or you work more sustainably, you are either creating or protecting employment. The first thing is the greening the workplace activities because they do generate employment or they protect it. We are obviously hoping that there will be a green workplace theme in the low carbon industrial strategy because it is the obvious place to start. Workplaces consume energy and resources. They generate waste and travel. Interventions in all of those areas have the potential to change the economy to the place it should be at.

Q144 Mr Chaytor: I can see the value of that work in reducing energy costs but in generating new products and services that is not necessarily going to be quick and easy, is it? Are there other sectors where new products and services can develop more quickly?

Mr Pearson: We would go for low carbon vehicles right across the board, not just bikes, but the private car, the light vehicle, the commercial vehicle.

Q145 Mr Chaytor: The development of new engines?

Mr Pearson: It is two stages, is it not? It is the lighter engine, the lighter vehicle, the greater efficiency in the technology we have, hybrid into the combination of electric and fossil fuel and then to the one or two million vehicles a year by 2020 that should be electric. Every year we waste in not getting those one to two million vehicles built is a year where we have a third of our carbon generated and thrown up into the atmosphere because we are not tackling carbon from transport. It really is a crucial area. We were talking earlier about the defensiveness of trade unions in the car industry, but they want a car industry still there to convert green. In the background they are saying, "We have to save what we have because there will not be an industry to convert to green if we do not save the industry we have." Getting support for changes in other technology in this sector should be really job rich.

Q146 Mr Caton: Your written evidence argues,[7] as well as providing green skills themselves, that the development of influencing and persuasion skills is required to encourage people to change behaviour and reduce emissions. Who needs these skills and what should the government be doing to make sure they get them?

Ms Ferns: Lots of us need the skills but workers need the skills in their workplace. I think the Carbon Trust would agree that you can introduce new pieces of kit and innovative products into the workplace but to sustain behaviour that leads to lower emissions and more efficient use of resources what you need to do is to change people's habits. You need to change the way that they behave at work and at home. There is huge potential saving there to be had. It is also the way in which you continue to make those savings in the longer term. We have all talked about initiatives that come and go. It is a bit like having new pieces of kit as well. People take notice and after a while it becomes part of the normal scenery and people lose interest. What you need is people in the workplace who are going to keep their eye on the ball and make sure that people do not slip back into old habits, that they do change their behaviour and work in a more sustainable way.

Q147 Mr Caton: Do you think enough is being done in the education process both at primary and secondary level to encourage green thinking in our children?

Ms Ferns: I do not know whether enough is being done. I do not have all that much contact with schools. I am aware that more is being done than used to be and I think there are some good examples of very good practice. What I am less sure about is how consistent that work is and whether those examples of good practice have a lot to thank motivated teachers for and motivated individuals who drive those forward and how much that has become embedded into the system, I do not know.

Q148 Martin Horwood: Given there are other governments around the world who are now beginning to focus on this agenda much more than they have done in the past - most obviously spectacularly China and the United States now suddenly starting to promote green jobs as well - do you think we are doing enough to retain the skills and knowledge on greener technologies in this country or do you think there is a real risk of a green brain drain?

Mr Pearson: I think there is a real risk. Thank goodness other countries see the big issue globally to be resolved is the US/China relationship and if it stimulates both of them to convert their industries and it draws talent globally to the US or China I suppose those processes are to be welcomed; but it would be nice to have as much of the innovation as possible taking place in Britain, which is why we have been great supporters of the projects in the green transport sector, in the nuclear and CCS sectors which are two or three of the major centres of innovation in the cell technology that is going to come through. The CCS capture and storage technology is absolutely vital and the new generation of nuclear and they are all major opportunities for investment and for the development, enhancement and personal career development questions in terms of the new technologies, how they are applied and the opportunities for employment they provide. We are massively in favour of real change in Britain in areas such as those.

Q149 Martin Horwood: If we take CCS, I am sure most of you would have welcomed the government's expansion of the competition but, compared to the kind of investment that is going into CCS in China and the United States and the existing expertise in the US dating back 40 years, surely those are the places where most of the real innovation and development are going to take place and we are just going to be playing catch up?

Mr Pearson: That could be right. It does not feel like it on carbon capture and storage. It feels like we could well be on the point of creating that cluster approach, which is vital to CCS. Carbon collection and storage is really not appropriate for single sites; it is a cluster thing, is it not, as the government has been arguing and indeed as we have been arguing. In Yorkshire, in the Aire Valley, there is this agglomeration of around 13 or 14 emitting sites, whether it is steel, coal, gas fired power, chemical, ceramics. There are major emitters. The idea is they all find different technologies, ways of liquidising and CO₂ being captured and transported away.

Q150 Martin Horwood: In the industries where we have not got that kind of critical mass, is not the inevitability that we are going to be importing skills and knowledge from other countries. If you look at Denmark on wind power and things like this, they seem to be so far ahead of us that we are in the end going to have to start importing the skills if we are going to develop here, are we not?

Ms Ferns: That may be so. A real risk for us looking further ahead is in terms of the R&D capacity we have here, which is less than it used to be. A lot of research facilities have been privatised or put at arm's length and are now much more contract driven. The long term research and development that we used to have taking place has reduced in volume. I think that is absolutely key for the future. Okay, we may have missed the boat on wind but that is now. The potential for renewables in the long term is much greater and there is a danger I think that we do not have sufficient R&D base. The other danger is that, where we do have R&D capacity, there is that gap in scaling up the R&D into a commercial prospect. I think there is a real danger there that we will lose out to other countries.

Q151 Martin Horwood: Are you aware how we compare with other governments, particularly on public support for R&D, or is it more of a private sector issue?

Ms Ferns: Public support for R&D is important and clearly we have had more money put into the science base over the last ten years or so which has been important. Government departments have scaled back in terms of their commitment to R&D which has led to loss of key skills and in some sectors we have had a lot of services privatised. These are long term projects so they are not necessarily projects that particular companies will do. They are projects that need public investment and public capacity.

Q152 Martin Horwood: You may not be able to answer this now but if you could send us information that would be helpful.[8] How do we compare for instance with other European governments in the amount of R&D we are putting into these skills?

Ms Ferns: Perhaps that is something we could follow up on.

Mr Pearson: We would be pleased to do so.[9]

Q153 Chairman: We had evidence from John Edmonds a couple of weeks ago. He said that he did not think either the government or British industry were particularly well suited to making a quick transformation to a low carbon economy. Do you agree with that assessment?

Mr Pearson: No, I do not. I can see why he would say it but if you go to a body like the Renewables Advisory Board you really do see a great appetite for a combined effort to get to this target. What we would like to see is other sectors being given the same sense of industrial, trade union, government concerted effort to get there in the car industry for example. On the Coal Forum, we are now getting towards a clear sense of how much coal we want to mine and burn, how much clean coal and how much clean gas. Jobs will be lost in that CCS strategy as we lose coal fired power stations. The unions and communities want to see jobs created or saved through the legitimate use of carbon capture. These are major issues of public concern. Bodies that are focused on delivery are really much the best way, rather than general purpose activities and high profile events which last a day. We are talking about being here for the long term and we do really believe that sector based just transition strategies are really the way forward.

Q154 Chairman: You identify the Renewables Advisory Board as a good example of where it is working properly and you would like to see something similar with vehicles and coal. Is that right?

Mr Pearson: Any of the major sectors identified by the Committee on Climate Change deserve that kind of attention.

Chairman: Thank you very much for coming. It is much appreciated.

Memorandum submitted by the Institute of Environmental Management and Assessment (IEMA) (GJS13)

 

Examination of Witness

Witness: Mr Martin Baxter, Acting Chief Executive of IEMA, gave evidence.

Q155 Chairman: Welcome. I hope you found the previous witnesses' evidence interesting to you. Your submission to the Committee[10] said that mainstreaming environmental knowledge into all types of business is essential as it acts as a catalyst for low carbon and resource efficient activity. Why do you think the government are not doing this?

Mr Baxter: Firstly, it is quite difficult. Secondly, the activity and thrust of government has been about stimulating new innovation. It is difficult to understand why they have not picked up on the need to mainstream demand for low carbon, resource efficiency and environmental improvement in business simply because, in our view, it consistently shows that companies can make real bottom line benefits. Also, by investing in environmental skills in mainstream business, we believe that acts as a catalyst for supporting new innovation. Envirowise is a publicly funded programme to support business resource efficiency. The evidence suggests that they have consistently been able to deliver business benefits. The Carbon Trust is doing similar work and we believe a programme that accelerates the take-up of environmental skills in business so that business can do this for itself would be a good use of public money and would help to drive innovation in new technologies which would help to support the move towards a low carbon economy.

Q156 Chairman: Those examples you have quoted are what you consider good ways of how this could be done?

Mr Baxter: There are existing ways of how things are being done but I do not think they have been as effective as they could have been simply because the one off interventions you might get from the likes of Envirowise or the Carbon Trust do not leave the business or organisation with the capability to do it for itself. We think any form of public support for companies should also focus on giving them the capability to make ongoing, lasting improvements. Organisations change. The external environment changes, whether it is the price of energy or raw materials, diminishing raw material or climate change adaptation, we strongly believe that companies should have access to the capability to make those business decisions and investments for themselves.

Q157 Joan Walley: You were in for the previous session. It seems to us that a demand led approach to skills has not worked. I wonder what your take is on why the specific skill gaps are still not being targeted by government or indeed by industry.

Mr Baxter: There are a number of problems that we see. Firstly, there is a general failure in a large proportion of UK businesses to see the benefits of good, sound environmental management and resource efficient management practices.

Q158 Joan Walley: Why is that?

Mr Baxter: Competing demands for time. If you go back a number of years, environment might have been seen as altruistic rather than delivering a core business benefit. The ability to argue a coherent business case based on sound, environmental improvement principles which will deliver improved business resource efficiency will prepare an organisation to deal with for example climate change adaptation. We have seen some organisations now that are starting to take that and plan a number of years into the future about how they will deal with that. They are starting to see that business and environment are inextricably linked and there is then value in having those skills, but they are few and far between. Our own organisation's growth indicates that there is increasing interest from business in this but it is not going fast enough, in our view. In terms of a demand led system, the sector skills councils are a demand led framework. If business is not demanding resource efficiency and low carbon skills, the sector skills councils will not deliver them and therefore you have a problem. The other issue that we have raised in our submission is that environmental business resource efficiency and low carbon are what we would call horizontal issues, so they apply across all sectors of the economy. You have the vertically aligned sector skills council approach and you have different approaches from different sectors where a large proportion of the skills that need to be developed are the same, so you will either have duplication or gaps, but there is no coherent approach.

Q159 Joan Walley: We are saying that the government is not really targeting the skills which are needed; neither is industry so therefore if it is the sector skills councils that need to be filling this gap and they are all having different approaches why is it that somehow or another the lessons of the Stern Report cannot be filtered through into the skills gaps that we have? It is just straightforward, is it not? Is it the chambers of commerce that are not taking this approach? Whose responsibility is it?

Mr Baxter: If you look at the work that we have had to do to try and push this agenda, it takes us into Defra and the Business and Sustainable Consumption and Production Unit there. It takes us into DEC, BERR and DIUS, so you have to spend a lot of time working across different government departments because there is no coherent approach. That is certainly a problem for us. Also, we are starting now to see some of the mainstream business trade bodies take this a bit more seriously. The CBI has its climate change programme. We work with EEF, what was the Engineering and Employers' Federation in developing skills to help make businesses more efficient. That is starting to happen but I would say it has been happening in spite of government support, not with it.

Q160 Mr Chaytor: I would like to ask about accreditation and ISO 14001. What is your assessment of the value of that?

Mr Baxter: There are something like 150,000 ISO 14001 accredited certificates around the world. There is significant growth. The UK has something like 7,500 certificates and it has been growing at something like 10 or 15 per cent a year.[11] In terms of its ability to deliver, it helps to deliver operational efficiencies but in terms of the standard itself there is not a great deal wrong with it. The way in which it is applied in organisations tends to deal with the operational issues, particularly a legal compliance delivered focus, and does not really push into the more strategic business elements. It is slightly weaker on dealing with environmental issues and products and also in supply chains. For information, I head up the UK delegation to ISO on all environmental management standardisation and last week we started a group in ISO to look at some of the strategic issues they are facing in environmental management systems and how they can be addressed. That is something that we are certainly looking to exploit. A lot of the training that is done in the UK on mainstream environmental work in business is about supporting people in companies being able to implement environmental management systems to deliver improved environmental performance.

Q161 Mr Chaytor: Does that mean there is a case for a new standard which is more specifically focused on a low carbon economy or do you know if the existing 14001 can be modified?

Mr Baxter: 14001 is the main standard in ISO that deals with environmental management systems but there is a whole range of other standards that deal with environmental labelling, lifecycle assessment. The UK is convening the International Group on integrating environmental issues into product design. There is a whole range of greenhouse gas emission standards being developed at ISO including product carbon foot printing and there is a proposal for water foot printing as well. There is a lot of activity. I do not think that internationally ISO has been particularly effective in getting those standards to work more coherently together and that is one of the challenges that we have been working with as the UK's input into ISO, to get that to be more effective.

Q162 Mr Chaytor: What are the next steps to make it more effective? What would you be arguing for in the ISO discussions?

Mr Baxter: In terms of using environmental management systems, it is focusing on environmental improvement. It is making the link between having a more holistic approach to the use of the standard. You can apply the standard to operational units but having something that stretches across into the strategic decision making is much more effective because that is where some of the big environmental decisions will be made which will lead the way in which that company addresses environmental issues for its sites around the world. That is one of the things we will be focusing on.

Q163 Mr Chaytor: When the government produces its low carbon industrial strategy later this year, how prominent should this kind of environmental accreditation be? Do you think it ought to be a big theme in the strategy?

Mr Baxter: It should certainly be part of the theme and it has a role to play. Defra has a position statement on the use of environmental management systems but it has not really integrated it into existing policy delivery. For example, if you look at the carbon reduction commitment, there was a great opportunity to have built in the use of ISO 14001 to support a management framework for improvement and to support data management, because there is a reporting element in the carbon reduction commitment, and it could also have been used as an indicator of early action, to reward those companies that had already made some commitment and demonstrated performance improvement. Unfortunately, that was a failure. There are other examples where Defra has its product road maps and sector agreements. There are opportunities to use things like voluntary environmental management systems as a means to demonstrate that organisations within sectors are delivering on the commitments that are made. A bit more coherence would be something that we would welcome.

Q164 Mr Caton: A number of different organisations have an interest in green skills and some of them have been identified already: industry, sector skills councils and the government itself. How well coordinated is action on green jobs and skills, in your view?

Mr Baxter: Very poorly. One part of our submission identifies that we do not believe the definition of green jobs and skills is appropriate. In putting together our submission, in some ways, it falls slightly outside the scope of your own Committee's framework because you are looking very much at this as a low carbon environmental goods and services sector in its own right; whereas we believe there is an awful lot to be said for mainstreaming environment in business across the piece. To be able to achieve our 2020 and 2050 CO₂ reduction targets, everybody is going to have to play their part. In terms of a coherent view from within the UK, it is not there. It could be, so the professional bodies could play a part. We are one of them - probably, I guess, the biggest - but there are others that can play their part. There are environmental regulators. There are the government departments interested in both the business and innovation side and also Defra. That collaboration could be put to much greater use with a clear road map to say these are the skills that are needed; this is the direction in which we are all going. Everybody needs to play their part but that is lacking at the moment.

Q165 Mr Caton: Why has not that coordination kicked in to date?

Mr Baxter: Lack of leadership, I would say.

Q166 Mr Caton: Who should be showing that leadership? Government? The industry?

Mr Baxter: There has been effectively market failure in being able to take this forward. In the case of market failure, there is a role for government in setting the strategic direction and articulating the case more clearly. Government should take the lead but it should be in partnership with the other bodies.

Q167 Mark Lazarowicz: What would you like to see from the low carbon industrial strategy?

Mr Baxter: A very clear direction that, come what may, the UK will drive forward and achieve its 2020 targets, both in terms of the 34 per cent reduction in greenhouse gas emissions and the 15 per cent of the UK's energy supply from renewables. Secondly, there needs to be a clear commitment that part of that strategy will be delivered by mainstream business and that it will not just be the development of new organisations, new companies, to drive new technology. That has to be an integral part of the mix. Following on from that, the skills that are needed in mainstream business to be able to make that transformation need to be supported very clearly.

Q168 Mark Lazarowicz: What are the key things we need to do to ensure that this happens? What are the points that really need to be given a priority?

Mr Baxter: A coordinating body that focuses on environmental skills and green jobs is absolutely essential.

Q169 Mark Lazarowicz: A governmental one, a governmental industry one or what?

Mr Baxter: I think I said in my earlier answer that we felt it should be government but in partnership with others. Secondly, there does need to be an articulation and a breakout so that we understand what we mean by green skills. We would very much come from the view that a lot of the skills are already there in the economy. It is environmental knowledge and the way in which you apply that in practice in different situations and the way in which you think about those things from a business context which is lacking. We would like to see much greater emphasis on the key environmental knowledge that is required to make this transformation. It is not just about understanding some of the basic environmental science principles; it is understanding the environmental business dynamic, the tools that are available, whether it is ISO 14001, whether it is the carbon footprint standard, whatever it might be, and then backing that up with a clear skills programme to enable those tools to be applied successfully in practice. Thirdly, the government has an ongoing legislative programme which is there to regulate the way in which companies operate. If you take the carbon reduction commitment, there is no skills programme there to help organisations in both the private and the public sector to achieve the improvements in performance that are required. We think there would be great merit in aligning some of the skills development programmes with the new regulatory requirements so that the expectations that are there from a regulatory regime are achieved and potentially exceeded.

Q170 Chairman: You mentioned the role of mainstream businesses. If you look back 40 years ago and see how we developed in this country a lot of expertise in offshore oil and gas technology, drilling, exploration, production and so on, given that it is quite clear we have a similar, natural advantage for offshore wind as an island surrounded by a lot of windy seas and a history of expertise in offshore technology of a slightly different type, why do you think we have so completely missed out on this opportunity?

Mr Baxter: Firstly, we missed out because we did not have a clear direction until very recently. We now have very clear climate change targets. We have very clear renewables targets, so that helps to set the policy context. That was lacking. Secondly, some of the problems that we are facing at the moment in terms of deploying some of the big, new environmental technologies, whether it is offshore or whether it is some of the onshore things, mean that we are going into a new consent regime. The Infrastructure Planning Commission is being established which will have a new regime. That creates uncertainty. There are no national policy statements available yet which will cover energy, nuclear, transportation. We are waiting for all those. If I was an investor, I would say that equals uncertainty. Even when the Infrastructure Planning Commission comes in, there is then political uncertainty because it is unclear what will happen if there is a change in government because my understanding is that there has been a very clear commitment to withdraw the Infrastructure Planning Commission. That creates uncertainty for investment and therefore international companies will look to other places to invest where there may be greater certainty.

Q171 Joan Walley: Listening to all the evidence that we have had this morning, the thing that just hits me in the face is the extraordinary ignorance that there is around the country about the enormous opportunities that there would be and could be from green jobs if only we could find a way of overcoming all the difficulties and hiccups in the system. I was interested in the research that you quoted in 2007 which showed that less than a quarter of SMEs could even name a piece of environmental legislation. You have members who are all engaged in different ways in different industries on this agenda. What can be done to really focus on overcoming this widespread lack of understanding about the importance of this agenda? Presumably, if everybody understands the importance of this agenda, lots of the difficulties or obstacles will really be overcome?

Mr Baxter: For us, the answer is very clear and that is that companies need access to people with the right knowledge. Programmes that help to embed that knowledge in companies are absolutely essential. If you take a parallel with health and safety, although the legal regimes are very different, every company of a certain size - 10, 15 or 20 people - has to have named health and safety representatives in their organisation. There are very clear personal liabilities associated with health and safety. There is nothing like that on environment.

Q172 Joan Walley: That has to start at the top table though, has it not? It has to start at the level of chief executive. Is there any arrangement whereby your members are getting chief executives' focus on this agenda?

Mr Baxter: Our members could be anything from a director in a big company, an environment or sustainability director, or they could be a site environmental coordinator. Clearly the ones who are operating at the high end do have that influence and can help to influence the strategic direction of their organisation. In my own example, as well as being an environmental professional, I am also a member of the Institute of Directors and participate on their director development programme. There is nothing about strategic environmental business imperative in that programme. If you look at all the MBAs in the UK, what proportion of them would be having a module that takes people through this agenda? Very few, I would suggest.

Joan Walley: Or even giving evidence to parliamentary committees.

Q173 Chairman: Having heard the evidence that has been given this morning and the questions we have asked you, are there any other points you think you would like to make to us that would be relevant to our inquiry?

Mr Baxter: Mention has been made about the price of carbon. Although that is important, the bigger stimulus is going to be the price of energy. A high price for a barrel of oil will transform the way in which businesses look at this. That price is going to be absolutely critical. If you look back 12-18 months ago when there were significant increases in the price of oil and there were major problems with budgeting for companies that were big energy users, that clearly was an incredible stimulus for companies taking this more seriously. Whether it is the price of carbon that is needed or whether it is just monitoring energy prices and the role of renewable in terms of flat lining some of the price increases that you could have, it strikes me that that is an important issue. It seems that is something the Committee is interested in but, from our perspective, we would like to see far more attention given to the role of environmental professionals in business. We have worked hard to position that as something which is not a finger wagging type, green, moralistic argument but more: "It is good for your organisation. Here is the value that these people can offer." The more that can be given to that approach, the more successful we will be in making that transition to a low carbon economy.

Q174 Chairman: On the price issue, does that mean that there is a role perhaps for carbon taxation particularly to meet some of the shortcomings of the emissions trading scheme, which is not at the moment for various reasons producing a price of carbon which is going to drive more investment into low carbon energy? While that market failure exists, is there a role for more carbon taxation?

Mr Baxter: Potentially. It partly depends on how you view the carbon reduction commitment. The carbon reduction commitment is there to say that there is a price of carbon in terms of the primary energy production in the UK from fossil fuel based energy sources, but the carbon reduction commitment is for those organisations that use a lot of energy. There is an incentive scheme there for buying allowances and that is completely within the government's remit to set fewer allowances to drive up the price of those allowances and to extend the scheme to slightly smaller organisations. Until that scheme is operating, maybe it is a little bit too soon to make that transition at the moment.

Q175 Chairman: In the previous answer you referred to the desirability of an enhanced role and involvement for environmental professionals within a wide range of businesses. The Committee on Climate Change has said that in addition to monitoring the statistical progress towards meeting carbon budgets it will also be looking at other things, the number of wind farm planning applications that are in. Is that compatible with the target we have for a big increase in renewable energy by 2020? Is there some similar way of measuring the role that environmental professionals have with business to see whether that is also growing in the way that, on your analysis, it needs to if we are going to get to where we are trying to reach?

Mr Baxter: It would be a useful indicator to look at the number of skilled environmental professionals operating in mainstream business, particularly because we believe that they act as a catalyst for change in their organisations. They do not do it all themselves, but they work with procurement, product developers, business strategies and operational people. A useful indicator is the way in which their numbers grow and their influence develops.

Chairman: Thank you very much for coming in.

---

[1] See Ev...

[2] Note: Commission on Environmental Markets and Economic Performance (CEMP)

[3] See Ev....

[4] Note: Sustainable Development Commission, A Sustainable New Deal,7 April 2009. - http://www.sd-commission.org.uk/publications/downloads/SND_booklet_w.pdf

[5] Note by Witness: The Government's target of a 34 per cent cut is by the year 2022, not 2020 as stated during the evidence session.

[6] Note: Greening in the Workplace report? Trade Union Sustainable Development Advisory Committee, Greening the Workplace, June 2005. http://www.tuc.org.uk/economy/tuc-9996-f0.pdf

 

[7] See Ev.....

[8] OUTSTANDING NOTE REQUIRED

[9] OUTSTANDING NOTE REQUIRED

[10] See Ev...

[11] Note by Witness: The UK has over 7,000 certificates and in 2008 the number grew by 16 per cent, not 7,500 certificates, growing at 10 to 15 per cent, as indicated during the evidence session.