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Lord Williams of Mostyn: I do not believe that they fall within any PACE codes, because the circumstances are wholly different. Perhaps I may think about that question and write to the noble Lord. That is something to which I have not put my mind in the context of PACE.

Baroness Williams of Crosby: I may have misled the Committee by not being sufficiently clear. I thought I said that my understanding was that the power to search and seize premises under PACE was limited to relatively serious offences, such as manslaughter, murder and so on, but that in the context of this Bill it would include considerably less serious offences attracting a much lower penalty than would be the case for very serious offences. I did not intend to say that PACE did not deal with a wide range of minor offences. For that reason, I said that this considerable power was very much more constrained by the PACE codes of practice than it would be under the Bill.

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One of the matters about which we are concerned is that the modification of PACE to take account of the very different community which will be affected by the powers of immigration officers may be a very complex operation, such that the understanding of those powers by both sides may be even more difficult than it is today. That was why we were unhappy with the idea of simply modifying the PACE codes. Indeed, a good deal of PACE would be irrelevant to the code of practice for immigration officers.

I have taken note of the Minister's comments and remain profoundly concerned. This is a community which will find it difficult to understand the operations of immigration officers in the way that one would expect the resident UK community to understand the operations of police officers. I reiterate that many of these people will have had very painful, even violent, episodes in the past involving police officers in other places and countries. We believe that that must be taken into account.

Having heard the Minister, we are grateful for his observations. At this stage, we shall withdraw the amendment, but we may wish to hear more on Report. We cannot give an absolute commitment that we shall not return to this issue. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 119 [Arrest without warrant]:

[Amendments Nos. 190ZA to 190ZAA not moved.]

Clause 119 agreed to.

Clause 120 [Search and arrest by warrant]:

Lord Cope of Berkeley moved Amendment No. 191:


Page 75, line 1, leave out ("or a justice of the peace").

The noble Lord said: In moving this amendment, I shall also speak to Amendments Nos. 192 and 193. They all refer to the same simple point dealing with Scotland. With a name like "John Cope" I hesitate to speak for Scotland. It has been suggested to me that at least in Scotland it would be appropriate if the sheriff, who is a legally qualified judicial official, were the person to grant a warrant authorising an immigration officer or a constable to enter premises for the purpose of searching for and arresting individuals. That is worth suggesting to the Committee.

Amendment No. 192 makes essentially the same point as does Amendment No. 193 concerning entering and searching premises. The question is at what level of judicial rank the warrants should be authorised and whether they should be left to the lay justices of the peace in Scotland or referred always to the sheriff. I beg to move.

Lord Williams of Mostyn: I shall reply to the three amendments. The noble Lord is quite right. These provisions would mean that a warrant could not be issued in Scotland except by a sheriff. In other words, the power of the justices of the peace in Scotland would be taken away. They issue warrants regularly in the context of making warrants for arrest, search and entry. For instance, they have been carrying out that provision

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under the immigration legislation of 1991 and 1996 to allow police constables to enter, search and arrest for immigration offences.

Clauses 120 and 122 will allow immigration officers, as well as police officers, to execute warrants. Justices in Scotland also grant warrants to agencies other than the police. They give them to Customs and Excise and the utility services. They are given guidance and training covering all their duties. I have had no detail put to me of any operational difficulties.

The helpful nature of the justices of the peace is that they are local. They are accessible outside routine hours and give valuable assistance to the police. If there was a perceived need for additional guidance, that could easily be provided. We do not see any reason to differ from the existing accepted practices in relation to warrants for entry, search and arrest in relation to immigration offences. There would be a different level of scrutiny in Scotland from that which applied elsewhere in the United Kingdom. I believe that the justices in Scotland have discharged their duties with care and therefore I am unable to accept or support these amendments.

Lord Cope of Berkeley: That was a very full explanation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 192 and 192A not moved.]

Clause 120 agreed to.

Clause 121 agreed to.

Clause 122 [Entry and search of premises]:

[Amendment No. 193 not moved.]

Clause 122 agreed to.

Lord Burlison: I beg to move that the House do now resume. Perhaps I may suggest that the Committee stage begin again not before 8.30 p.m.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

Environmental Technologies

7.25 p.m.

Lord Wade of Chorlton rose to ask Her Majesty's Government whether they provide an appropriate level of support for the export of United Kingdom environmental technologies and services.

The noble Lord said: My Lords, I should explain my interest in environmental technology by stating that I am chairman of a company called Enterprise Business Solutions, which is a business service company that helps many environmental companies. I am president of the Combined Heat and Power Association, which is one of our most important environmental technologies. I am chairman of NIMTECH, which is an organisation which manages government programmes, many of which support environmental technology.

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Among other things, NIMTECH is also an organisation which supports the United Nations Industrial Development Organisation (UNIDO) in the United Kingdom. It is interesting to note that UNIDO programmes are now developed to integrate three elements of sustainable development: making industries more competitive; creating productive employment; and minimising the impact of industry on the environment. They emphasise the importance of developing countries having the full advantage of environmental technology to drive forward their sustainable energy policies. I believe that they also recognise that one of the main drivers of economic development is now the SME sector, developing countries' own small business economies. That is why in a sense we also need to emphasise the importance of our SMEs in developing contacts with developing countries. It is a point that I shall refer to later.

The Joint Environmental Marketing Unit of the United Kingdom Government estimates that the environmental technology and service global market was worth at least 280 billion dollars per annum in 1997. It is forecast to increase to about 335 billion dollars by the year 2000 and to 640 billion dollars by 2010.

The truth of the matter is that our competitors are taking a much greater share of the growing market. Our share is falling. Our main competitors, the United States of America, Germany and Japan, are now taking a larger share of that enormous business opportunity. I refer here to how the leaders of our industry, in terms of innovative technology, are in the small and medium-sized business sector. So their needs and abilities to take advantage of some of the major opportunities is very different from that of the large companies which have their own development resources and export facilities.

It is important that the British Government support the needs of the SMEs in that regard. Such companies need very particular encouragement to take export risks. It is no easy task for a small company to set out on an adventure to a foreign country, with all the unknown costs associated with it, and approach a person one has never seen or heard of before and do not really understand. I did that when I started my own export business in the food industry in the late 1970s. One needs to be something of an adventurer to cope with it. It is important that such people are supported and encouraged to do that very important job.

I can see a need for the United Kingdom to provide more support for exhibitions, demonstrations, lectures and presentations in those areas of the world which are now crying out for new and innovative environmental technology. The JEMU statement of 1997 identified a range of important countries throughout the world as potential markets for development. No doubt that was correct. But it is one thing to have a programme; it is quite another to encourage individual businesses to take those risks.

The company to which I referred, NIMTECH, recently ran a European funded project which we called Environet 2000. It took place in the north-west of

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England. It was a scheme through which we could support 80 manufacturing companies by providing the right consultants to help them understand their environmental needs, and how they might improve their environmental structures and make money in the process. The project took about two and a half years, and we were able to identify in each company considerable savings. They were relatively small companies. Those companies were able to achieve savings of £3,000 to £50,000 a year by having an outside person identify where they could make more money by improving their environmental technologies and services.

Such a project could be undertaken on a wider scale. DfID could use its money and resources to select areas where we could demonstrate to selected companies how their profitability and employment opportunities could be improved by support from UK environmental technology. The scheme promoted best practice, an important key activity.

Great success has been achieved in this country through environmental demonstration sites from which businessmen can learn the advantages of environmental technology and the range of wonderful technologies that are available. We now have businesses which can solve problems which people did not realise existed; apart from the fact that we can find solutions to problems which people often considered intractable and difficult to deal with. Demonstration units would seem an enormous advantage.

My company has had great success in running specialist enviroenergy and environmental technology seminars at which we gain enormous support from small businesses which wish to learn how they can improve environmental issues and make more money from the process. Such seminars are well supported by the industry, which wishes to sell its technology to new customers.

I should like the Government to develop specific items containing clear policies which enable us to get closer to the small companies in this field. The members of the Environmental Industries Commission export services--it has the lead role outside Government on these matters--have identified a number of areas. These include financial support for feasibility studies, and business plans in overseas markets. They would be of enormous advantage in encouraging small companies. There is need for financial support for tendering costs, which can be heavy for a company, and opportunity may or may not result.

A fresh appraisal of financial support is important. Assistance with project finance is a frequently mentioned need in this field. Other governments who are competitors provide examples of such support. Major UK contractors deal with some of the largest construction development sites in the world. But most respond to tenders developed in their own countries. When putting together the tenders, they are often unaware of the technology available to them from the UK. We could do more as a country to encourage early contacts through UNIDO on potential large projects of which our embassies and the people working in those

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countries are aware. At an early stage in the development of those projects we could give a presentation on how our technology could help them improve their plans.

An environmental technology newsletter has been suggested which could be made available to our embassies and businesses throughout the world. It was suggested to me that it could be made available on airlines. Many businessmen are avid readers of information which will help their companies grow and develop.

I am aware of the resources and benefits which the Government already provide in this field. In recent years, the Joint Environmental Marketing Unit has made tremendous strides in supporting environmental energies and technologies. But I seek to draw attention to the fact that the opportunities of this market place far exceed the resources now going into it. There is much anecdotal evidence that we are not taking advantage of this great market. We are not marketing the skills available in the UK for the development of the potential opportunities. I ask the Government to look again at the issue. I shall be grateful for the Minister's views. Do the Government feel satisfied that the industry is grasping the opportunities now before us?

7.36 p.m.

Lord McNair: My Lords, I thank the noble Lord, Lord Wade of Chorlton, for his introduction to this Question. It is an important issue close to my heart. As a keen environmentalist in the early 1970s, I remember being laughed at for saying that the environment was important and that we should take great care of it. Perhaps my generation has now reached the point where we can do something about it. I believe that we are missing out on a considerable commercial bonanza which not only has tremendous commercial possibilities but also holds the promise of enabling Britain to take the lead in giving effect to the decisions and promises taken and made at Rio and Kyoto.

It is clear from the material provided by the Environmental Industries Commission that the industry feels that the answer to the noble Lord's Question is no at present. But we hope that that will change. I believe that I am right in saying that the majority of the wind power devices used in the United Kingdom are made in Denmark. This underlines the problem. If we are not even supplying our home market, it is difficult to see how we can successfully compete in exporting to other countries.

Environmental technologies and services are a new sector which is expanding rapidly as developing countries seek to avoid the mistakes made and the environmental problems caused in countries which became industrialised before the problems were known about.

One of the most startling statistics I heard recently is that we use 7,000 years of accumulated energy capital in the form of fossil fuels every day. It is the growing awareness of this kind of statistic and the disadvantages of using fossil fuels that is driving the demand for environmentally neutral or even beneficial technologies in many parts of the world.

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One area of increasing concern is the contamination of groundwater in many developing countries where one would least expect to find that problem. This means that there will be a greater and greater demand for the technical expertise in which Britain excels.

I know from my visits to the Sudan of the intense interest there in renewable energy. This ranges from bio-gas to solar energy, and there is growing interest in rolling back the desert. The Sahara is advancing by a number of miles every year. Each time I visit I am reproached for the decline in the interest taken by British industry and the DTI in that country. I hope that the renewal of diplomatic relations will change that. I know that in some countries of Africa, we have an active commercial section in the high commission or embassy.

It is sad that we appear to be missing out on a new industry. As the noble Lord, Lord Wade, said, to a remarkable degree it consists of small companies. Such companies do not have the manpower or resources to be able to engage in export promotion on their own account. I have a particular suggestion to make. The DTI could establish an environmental technologies export promotion website. That would make the increasing number of people in developing countries who look to Britain for a lead and opportunity to discover what we are doing, even if we do not go and tell them ourselves.

Although these issues apply to many other sectors of the UK industry, the ETS sector can claim special attention because of the Government's specific interest in tackling global environmental issues. Robin Cook spoke about that to the Green Alliance on Britain, the Global Environment. The recent launch of the climate change challenge fund is a welcome initiative in this context, but such support needs to be widened to encompass a broader range of environmental sectors and natural instruments. The ETS sector is also fragmented with a large number of small and medium-sized enterprises which need help to tackle the global market.

7.41 p.m.

Lord Lewis of Newnham : My Lords, first, I thank the noble Lord, Lord Wade, for initiating the debate. The problems in the environment are of central public interest. Although much of what I want to say has already been said by the two previous speakers, I want to emphasise one or two points. Before doing so, I must declare an interest as the honorary president of the Environmental Industries Commission which is responsible for overviewing and co-ordinating much of the industrial side of the industry. Its paper on Winning in the Global Environmental Markets, referred to by the noble Lord, Lord Wade, is an important document which emphasises many of the problems which we face.

The recognition and removal of pollution from society places severe challenges on both science and technology. The problem involves initially the detection of the pollution; the measurement of the extent and range of the contamination; and, finally, the removal and possibly the monitoring of the pollutant. All those techniques are somewhat specialised and each demands

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a considerable difference in approach. When one looks at that intellectual cocktail, one can see the requirement for a tremendous amount of experience and information in order to deal with the problems.

Initially, pollution problems were identified at a local level and have now become a global factor. If we compound that by the environmental legislation of the past three decades, we see that an important and large industry had been developed. As was said by the noble Lord, Lord Wade, we are talking about an industry which has a calculated turnover of about 300 billion dollars per annum, rising in the next decade to about 600 billion dollars.

The UK has been making good progress in this market. That has been done with certain help from the Government. However, our main competitors--the USA, Germany and Japan--are moving at a faster rate than the UK. All those countries benefit from more significant government support than the UK industries. The USA is now the world's largest exporter of environmental technology and services.

On a recent visit to the USA, I was impressed by how much collaboration exists between government, industry and universities. For instance, the EPA and the USA Department of Agriculture are working with industry and universities on the production of a low-cost, reliable and easy-to-operate water treatment plant. That has been done in conjunction with the Mexican authorities. I remind noble Lords that in Mexico 90 per cent of water treatment plants are out of operation. Water treatment is a major problem which applies to all the developing countries. It has been argued that the present water situation in the developing world is a crisis equivalent to the oil crisis of the 1970s.

Not only are we dealing with what is commercially a beneficial operation, but with a highly desirable prospect in many parts of the world. Clearly the scope and potential of the industry is vast and we must do all that we can to encourage the UK's contribution to this industry. A range of support has been suggested, of which I agree with some elements as regards promotion and development. That can be accomplished by a variety of mechanisms, including feasibility studies, joint ventures and project financing which must appear high on the list of priorities in order to allow for a fair assessment of what is happening in the world at large.

One of the main difficulties, as has already been emphasised, relates to tendering for projects. Limited resources are often associated with the suppliers of environmental technology and services, especially with regard to overseas projects. Such firms tend to be SMEs and often they are dissuaded by the magnitude of many of the projects. Government funding concerns itself with projects of the order of £50 million and above. That is out of the category of consideration for many SMEs.

The problem is further complicated by the delay and expense of tendering. That was well illustrated to me when I visited eastern Europe as a member of the House of Lords Sub-Committee C of the European Communities Committee which was investigating the PHARE programme. The considerable environmental

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problems in that part of Europe were further complicated by the time-lag and bureaucracy of the EU procedures in Brussels, a point which we emphasised in our report. That delay and the mass of paperwork involved has a very negative effect on encouraging applications from SMEs in this country. The expense of being involved in a failed application often makes applications in this area difficult to justify.

I admit that although the problems outlined are not unique to this section of UK industry, I believe that the potential financial advantage to be gained by this sector and the general impact of environmental problems and thinking on the Community warrant special attention to this area.

It is perhaps important to say that much government legislation on the environment has been 80 per cent directed from the EU. Many of the problems which we encounter have an equal applicability across the EU as a whole, leading potentially to a very large market.

Recent changes in the regulations on waste disposal, with the reduction in the amount of biodegradable waste to about 65 per cent for landfill sites, have been interpreted as leading to a major increase in the incineration of waste and an increase in the number of incinerators, from about 10 in this country to about 150. Although we may have a special problem in this area, there will inevitably have to be major investment in incineration capacity throughout the whole of Europe. That is only one illustration of what is happening in environmental technologies with regard to waste and the potential for industry.

I stress my belief that that is typical of the many problems which will result from EU directives and which will place the industry at a premium. We must ensure that it is viable and able to benefit from this potential growth. Money spent now will be a major investment for the future.

7.50 p.m.

Baroness Sharp of Guildford: My Lords, I congratulate the noble Lord, Lord Wade, on initiating this timely debate. As we have heard, the environmental technologies represent a large market, at the moment growing by as much as 5 per cent a year. The UK came late to this market. If we look back to the early 1980s, tough legislation in Germany on acid rain prompted German firms to develop technologies in terms of "scrubbing" and flue gas emissions which led to their dominating the market by the end of that decade. When we came to put in our own equipment, we had to import it from Germany.

Similarly, the United States developed catalytic converters. Tough regulations stimulated firms in the United States to develop the technology and they led the world in it. We heard earlier that Denmark is now exporting windmills to us. One lesson to be learnt from this is that tough environmental standards may impose costs in the short run, but in the long term there are benefits in terms of the environmental quality of life. If a firm sees an opportunity, there are benefits to be gained from those who get in early.

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From these Benches, as is well known, we have for a long time argued that environmental issues should be taken seriously. Even if the predictions of global warming and climate change are sometimes over-pessimistic, with increasing numbers of people on the planet--all aspiring and acquiring more goods and services, especially motor cars--quality of life alone demands that we take seriously the harm that untrammelled industrialisation may do. Modern technologies enable us, and others, to move forward in ways which are now much more environmentally friendly and which limit the degradation done to the planet. It is essential that we use and promote the new technologies as best we can--not just for ourselves but also for those countries embarking on the process of industrialisation. Indeed I think it is vital that such countries do not follow the route to industrialisation that we and other apparently advanced technology countries have followed. That will lead to further degradation of the planet.

We should recognise that all those countries offer very considerable opportunities. I agree with the noble Lord, Lord Wade, that there are enormous opportunities for export to these markets, both in the developed countries and in the developing nations of the world. What can the Government do to help promote the technologies and help those companies seeking to develop them? One route is undoubtedly to ensure that the Government promote the market for such technologies in the UK itself. Regulations and standards are an important instrument in promoting new technologies, be they for car emissions, unleaded petrol or home insulation. A strong home market is one of the best bases from which to export.

That message applies not only to the Government's own procurement programme but also to the procurement programmes of local authorities. It is important to stimulate them to seek out the most environmentally friendly kinds of technologies. We have heard that many of the firms involved are small and medium-sized businesses. They need help both in developing the technology and in developing their links to export markets.

The current EU fifth framework programme devotes a great deal of its resources to the development of new and more environmentally friendly technologies. Key actions within the programme include developing high quality innovative programmes and services that meet the needs of the citizen and the market, especially technologies which reduce resource utilisation and promote the re-use and recycling of resources. Many new projects and initiatives are being instigated under the programme which are of direct interest to such firms.

The European Union has gone out of its way to make programmes of that kind accessible to small and medium-sized businesses. Technology transfer centres have now been established across the whole of the United Kingdom. The CRAFT programme is especially geared to helping small and medium-sized firms apply to join these programmes. Having joined them, they are linked up both with larger companies and with other small companies across Europe specialising in those

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different areas. That gives them openings for access to technologies and for learning of new opportunities for export.

However, I recognise that they do not help very much with the export programme itself. Nor do I believe that at present the UK Government have much in the way of programmes to help such firms with their export drives. We have in place the SMART and SPUR programmes, but they are small beer compared to the kinds of programmes many of our competitors have for their small firms. It is in this area that I should like to see some of the new initiatives beginning to emerge in the UK, flower and take on these kinds of responsibilities. I refer to the regional innovation strategies that are just beginning to emerge from the regional development agencies.

Only the other day I heard of plans emerging in London to bring together academic institutes, local authorities and large and small firms within London to develop competencies in new technologies and also to put such resources together to help, for example, a consortium of small firms create export and finance packages and so forth. Small firms can relate much more easily at that level. Frankly, it is difficult for small firms to join the European programmes because they have to find the time and resources to participate in the collaboration. However, time and money are in scarce supply for such small businesses. They can relate much more easily to firms that are relatively close to them in geographical terms. In other countries we have often seen regional authorities taking the lead. Indeed, even in this country the existing regional development agencies in Scotland and Wales have taken the lead. Pulling companies together and providing resources and help to access both technology and market opportunities are precisely the kinds of tasks where the new regional authorities should play a part.

In putting these ideas to noble Lords, I hope very much that we shall hear from the Minister how the issues are developing.

7.57 p.m.

Lord Northbrook: My Lords, I welcome this opportunity, initiated by my noble friend Lord Wade of Chorlton, to debate whether Her Majesty's Government provide an appropriate level of support for the export of United Kingdom environmental technologies and services, or ETS, as they are known. Although the UK has made good progress in export markets for ETS over the past few years, our competitors are moving faster, leading to an erosion of the UK's market share. Our major competitor countries such as the USA, Germany and Japan all benefit from significant government export promotion and development support for their environmental industries through a variety of mechanisms. Those include feasibility studies, joint ventures and project finance. I understand that similar support is provided in other countries, including Canada and Denmark, to stimulate the growth of their environmental technology industries.

I was very interested to find out that the size of the global environmental technologies and services market is estimated by the trade body, the Environmental

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Industries Commission, to be worth £190 billion per year and that it is growing at a rate of 5 to 6 per cent a year in real terms.

I acknowledge the fact that the UK Government support the industry through the Joint Environmental Marketing Unit (JEMU). The industry says that it needs a package of government support which goes towards matching that provided by governments in our main competitor countries. I shall be interested to hear what the Minister has to say on this subject, and whether the industry is, indeed, operating on a level playing field within Europe under the Treaty of Rome or whether other countries are unfairly subsidising their environmental technology and service businesses to the disadvantage of the UK.

Looking in more detail at the report of the trade body, the EIC, of July 1999, I note three specific areas which require support: first, financial support for feasibility studies and business plans, including the establishment of strategic partnerships in overseas markets. It is interesting to note that the budget of the US Trade and Development Agency is 56 million dollars, which is devoted mainly to support for feasibility studies, many of which are related to the environment.

The second area is financial support towards the cost of tendering for environmental projects. The commission complains that the overseas project fund is limited to projects above £50 million and states that most suppliers of ETS are small and medium-sized companies. Many important projects are under £50 million. I ask the Minister whether that ceiling could be lowered, as the larger projects could get financial support elsewhere.

The third area is assistance with project finance, especially in developing countries. Schemes such as the Japanese special environmental yen credit scheme; the Spanish fund for development aid and the mixed credit scheme in Denmark are quoted.

Let us compare OECD countries' and US support for ETS businesses. In the OECD, government support for export credits is the most common form of export promotion. That support may take the form of financing through extending direct credits, refinancing, and interest rate subsidies. Another form is the provision of insurance and guarantees to domestic suppliers and lending institutions for political and/or commercial risk. In addition, there is mixed credit where governments combine export credits with developing assistance funding, or there can be "tied aid financing" whereby any development assistance is tied to the purchase of goods or services from the donor country.

However, apart from the US and Australia, the 1994 report of the OECD, Export Promotion and Environmental Technologies, states that Government agencies do not generally have specific programmes or funds targeted as environmental technologies. OECD promotion through non-financial means is also important. That takes place by a variety of activities in the OECD, including training, provision of market information, trade mission support and help from embassies or consulates, in particular.

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The United States, as has already been stated, is now the largest exporter of environmental technologies and services. In 1993 the US Government published a paper entitled Environmental Technologies Exports--Strategic Framework for US Leadership. In 1994 the commerce department established the Office of Environmental Technologies Exports to work with US firms to export ETS overseas. Other initiatives included an information centre for ETS, resources for demonstration and pilot projects, banking assistance from the Export-Import Bank of the United States, and governmental assistance from the US agencies of International Development and Trade and Development.

Turning to the UK, the extent of support appears less comprehensive. The UK provides a range of export promotion services through Overseas Trade Services which is jointly sponsored by the DTI and FCO. As mentioned earlier, specific support for the ETS service in the UK is provided by the Joint Environmental Marketing Unit, which is jointly sponsored by the DTI and DETR. JEMU's mission is:


    "to nurture the development of a strong competitive and world class UK environmental industry capable of competing successfully in the world market place".

Export support is provided through the industry and trade associations which represent the environment technology industry in the UK. As stated earlier, in the regions there are some initiatives to encourage the growth of local suppliers of ETS in both the domestic and export markets.

I note two interesting developments this year upon which I should like the Minister to comment in more detail. The first is the Climate Change Challenge Fund announced by the Foreign Secretary in February and funded to the sum of £0.5 million. The second is the Wilson report on export promotion, again dated last February. It recommended fundamental changes to export promotion and development support in the UK, on which I also hope the Minister will comment as far as it affects ETS exports.

I wish to conclude by saying that from these Benches we recognise the need to do the best we can for our exporters. The ETS sector is an important area, particularly as many of its businesses are small to medium-sized enterprises. Whether the ETS sector deserves especially favourable treatment, as compared to other small and medium-sized businesses, we are not necessarily convinced, even though we recognise that the sector deserves special attention due to the Government's specific interest in tackling global environmental issues, as highlighted in the Foreign Secretary's speech to the Green Alliance in February 1999. I look forward to the Minister's reply.

8.7 p.m.

Lord Sainsbury of Turville: My Lords, I congratulate the noble Lord, Lord Northbrook, on an excellent speech which was worthy of his distinguished family. I am grateful to the noble Lord, Lord Wade, not only for tabling this Unstarred Question and for his contribution to today's debate, but also for his personal efforts towards promoting and supporting the UK environmental

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industry. I know that he has participated in many highly successful trade missions abroad, particularly to South East Asia.

Perhaps I may also say, right at the start, that I agree that SMEs have a key role to play in this sector. However, I have to say that the Government are doing a great deal to support them. The fact that distinguished speakers here tonight are not aware of all the initiatives which have been taken suggests a problem with communication which we need to address. I also hope that over the long term the RDAs, with their innovation strategies, will contribute more to this area because there are great opportunities.

The Government's manifesto highlighted the huge potential to develop Britain's environmental technology industry to create jobs, win exports and protect the environment. In creating wealth and helping to create jobs while protecting the environment, the environmental technology industry provides a fine example of sustainable development in action.

At least one encouraging part of the debate is the fact that we are all using the same figures on the growth of the markets. We all agree that these are substantial markets growing rapidly. I shall not repeat the figures, on which we all agree.

I would not, however, be so gloomy about the UK environmental industry's response to these markets. Our turnover is about 12.3 billion dollars including 1.2 billion dollars worth of exports. That represents over 4 per cent of the global market. When figures were published two years ago the trend in Europe suggested that France might have overtaken the UK to move into second place behind Germany. It is therefore encouraging to note that emerging statistics show that the UK has increased its export effort to the point where it is ahead of France, although a long way behind Germany. While this trend is encouraging, there is much to do if this sector is to move ahead fast and build a stronger position in world markets.

In answer to the comments of the noble Lord, Lord Northbrook, about our promotional efforts abroad and our organisation of them, I should like to say what we have done to reorganise export efforts. The Government's recent creation of British Trade International brings together responsibility for export promotion functions from the Department of Trade and Industry and the Foreign and Commonwealth Office. This new operation has lead responsibility within government for trade promotion and development. It combines in a single operation all trade development and promotion work currently undertaken locally in the English regions by the Business Link network, trade support services provided nationally and the commercial work overseas of over 200 embassies and other diplomatic posts. An integrated trade development organisation will give those firms offering UK solutions to environmental challenges a real edge in world markets.

British Trade International is also responsible for implementing the recommendations of the 1997 Export Forum. The forum recommended that the Government target their export promotion more, pay greater attention

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to UK sectoral strengths and provide better guidance on priorities. The "markets and sectors matrix" is part of the Government's response to the report. It gives a strategic overview of where the Government's export promotion priorities lie over the next three to five years and identifies the markets and sectors within markets where government support can make a difference. Of the 73 countries listed in the matrix, the environment sector is listed as a targeted priority in 47.

As has been said tonight, the Government also have an interdepartmental unit--the joint environmental markets unit, or JEMU--specifically dedicated to help promote the UK environmental industry. The Department of Trade and Industry and the Department of the Environment, Transport and the Regions are working closely together through JEMU to promote the success of the industry. Foreign and Commonwealth Office Ministers have agreed that their staff will be seconded to JEMU to support work in promoting environmental exports. The practical arrangements for this are in hand.

JEMU's first three-year business plan, which was launched by Ministers John Battle and Michael Meacher in March last year, after full consultation with the industry, detailed planned activities designed to raise the profile of the industry both at home and overseas. Good progress has already been made in implementing the business plan. As part of that business plan, we have a proposal for "demo sites", and this is already being implemented.

To deal with another point that was raised, we also have an environmental technology newsletter, Technology Partnership Initiative News, which is issued quarterly to over 6,000 recipients around the world.

JEMU has also taken a great deal of action. During the past year or so members of JEMU have travelled to many parts of the world to participate in missions, seminars and exhibitions in countries as far apart as Brazil, Germany, Singapore, Thailand, Brunei, India and Portugal.

JEMU has also been active in getting the market to visit suppliers. For the recent ET'99 exhibition in Birmingham, the UK's largest environmental exhibition, JEMU organised a "world mission" of over 70 overseas visitors from many key markets to the exhibition and arranged other visits to show at first hand the capabilities of the UK's environmental industry and its ability to provide solutions to environmental problems. This was the first multi-nation mission we have organised for a single sector. It is too early to ascertain the tangible benefits from this mission, but immediate reactions from participants were favourable. Valuable contacts had been made, together with the gaining of first-hand experience of UK capabilities. It is now for UK industry itself to take this forward, as commercial leads ensue.

The question of web sites and electronic communication was also raised. The Government are making the most of electronic communications to assist this sector. Within British Trade International's pages on the DTI's web site there is an environment sector menu. This enables companies within the environmental

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sector to see at a glance the range of government support services available to help them export. JEMU also has its own web pages, designed both to provide news and information to the sector and to help overseas customers gain access to UK expertise. It would appear from comments made by the noble Lords, Lord Wade and Lord McNair, that these services are not known to companies. Again, if that is the case, we need to improve our communications.

I hope I have shown that this Government take their role very seriously. They believe that the level of support to exporters is very significant. Indeed, the recent paper prepared by the Environmental Industries Commission acknowledged that the package of services provided by the UK Government is at a similar level to that available in other OECD countries. That is not to say, in answer to the question of the noble Lord, Lord Wade, that there is not more that we can do, but I think it is also correct to say that industry itself needs to play its part by developing and adhering to a medium- to long-term export strategy. The environmental market in particular is very much a long-term engagement.

The Government at times have been disappointed that despite their working with industry in the design of support services some of these services have not been used as effectively as they might have been. For example, recent trade missions to different parts of the world have been poorly attended and in some cases cancelled altogether. I fully understand the anxiety caused by recent global economic difficulties, but industry must not allow short-term indicators to deflect it from its long-term strategic objectives.

A number of points were raised about the question of the £50 million threshold for the overseas projects fund. The fund is an industry-wide scheme. There is little complaint from companies generally about the £50 million UK content threshold. Any change in the rules would affect applicants as a whole and not just those from the environmental industries. I should report, however, that an OPF customer satisfaction survey is currently being carried out. Among other things, companies are being asked about the £50 million requirement. The results of the survey are not expected until the end of September. When we have them, we shall obviously look at that issue.

A question was also asked about feasibility studies. Until 1995 the overseas projects fund could be used to fund free-standing feasibility studies, but the facility was withdrawn following an independent study which concluded that such studies rarely led to the commissioning of further work. The fund continues to provide support for studies which constitute an integral part of a bid for project work.

I should like now to say a brief word, as Minister for Science, about the Government's development of new sources of renewable energy and the considerable work we are doing in that field, which has real export potential. The Government are committed to a strong drive to develop new and renewable energy, reflecting the key role it can play. On 30 March the Government

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published a consultation paper, New and Renewable Energy--Prospects for the 21st Century. The Government have set a target of working towards providing 10 per cent of UK electricity supplies from renewable sources by 2010. These existing and new technologies will include landfill gas, waste, on-shore and off-shore wind and energy crops. We also want to maintain the momentum even after 2010. The contribution of renewables will continue to rise. It can be seen that considerable work is being done on the technology of renewable energies and, as the noble Baroness, Lady Sharp, pointed out, the fifth framework also supports much work in the environmental area. In answer to the point made by the noble Lord, Lord McNair, we do a lot of work in supporting wind power.

I agree with the noble Baroness, Lady Sharp, that a tough, regulatory environment can do much to promote innovation within companies. That is what the climate change levy and the associated energy efficiency schemes are all about. So we are moving strongly in that direction.

One of the Government's first actions on coming to office was to award a grant of over £270,000 to a new export services company--an industry-led bid following research from the industry itself. That company, which has already been alluded to this evening, is called the Environment Industries Commission--Export Services Company. It aims to help the technology sector to win more business in global markets by stimulating member firms to respond to opportunity and by encouraging networking and the formation of consortia.

The design of the project has been for industry to formulate. But as we approach the end of its second year, the results have so far been disappointing. Some of the project's original targets appear with hindsight to have been over-ambitious and companies have been reluctant to commit themselves. However, at all times the Government have sought to be as flexible as possible as the initiative has evolved and we continue to encourage the Export Services Company to be clear about the added value it can offer to companies in this industry.

By way of conclusion, one of the most effective things we can do for this sector is to ensure that the Government are playing their role in maintaining a stable economic climate and a long-term vision with sustainable development at its core. We need to encourage all business to think ahead and plan for a cleaner world and improved quality of life. British Trade International has already recognised the importance of the environmental sector and is working with JEMU to encourage industry to recognise the excellent opportunities. The Government will continue to encourage industry, through better collaboration, to enhance its dialogue with government for the evolution of export services for the future.

In the time I have available I have not been able to catalogue all the export services provided by the Government, but I hope your Lordships will acknowledge that the importance of the UK's

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environment industry is recognised by this Government and that we are energetically playing our part in its development and promotion.


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