I beg to move,
That leave be given to bring in a Bill to increase the amount of depreciation allowable against tax for investments on certain innovative environmental technologies; to require the Secretary of State to compile a definitive list of such innovative environmental technologies; and for related purposes.
The Bill that I am seeking to introduce aims to accelerate the depreciation deductible from tax on investments in innovative environmental technologies. The Bill would ensure that 100 per cent. of the depreciation is allowable in the first year. The idea is to stimulate investment in environmental technologies.
Three groups of people would benefit if the Bill were passed. First, it would benefit the firms that make the environmental technology. Those are firms which produce goods and services capable of measuring, preventing, limiting or correcting environmental damage, such as pollution of water, air and soil as well as waste and noise-related problems, and which produce clean technologies where pollution and raw material use are minimised.
The Bill It would also benefit the firms that use the innovative environmental technology, since it makes it easier for them to compete in countries with strict environmental standards. When firms invest, it will initially increase the cost, but it will give them a competitive advantage in the long term. The Bill will benefit us as consumers of industry and citizens of a country that is already polluted. It means that we are likely to be healthier and have a higher quality of life if environmental improvements can be made. That is why I am introducing the Bill, and why it has all-party support.
This technology is big business. The 1994 meeting of experts at the Organisation for Economic Co-operation and Development agreed that the world market is currently around $250 billion. It is predicted to reach $600 billion by the year 2000. If we compare that with the aerospace industry, which is currently worth $180 billion, and the chemical industry, which is worth $500 billion worldwide, the scale becomes apparent.
Much environmental technology is in its infancy; that has been well illustrated by the Brent Spar saga. We should be more advanced and more civilised in dealing with our waste products than simply dumping them at sea. The technology to dispose of disused oil platforms needs to be developed as a matter of urgency in a way that will minimise environmental damage and create jobs. This Bill would encourage that technological development. As well as technology to deal with the handling of solid waste, the other growth areas are expected to be the treatment of water and waste water, and air quality pollution control.
It is important that we give British industry the boost it needs to get involved in these growing sectors. At present, Germany, the United States and Japan clearly dominate the environmental industry technologically, with shares of 29 per cent., 22 per cent. and 12 per cent. of the world's patents. That compares with the United Kingdom's 6 per cent. share, and shows that we need to do more.
Yet we have some of the best scientists in the world. What we need is incentives for those scientists to work on environmental technology. That would satisfy the criteria spelled out in the White Paper "Realising our Potential". That would create wealth and improve our quality of life, more so than many other areas.
Even the technology foresight steering group, which has recently reported, agreed. It felt that it was important to promote a cleaner world by concentrating our research on clean processing technology, on energy technology, on environmentally sustainable technology and on product and manufacturing life cycle analysis, so waste could be minimised at source.
The Bill is based on a scheme of accelerated depreciation on environmental investment which was introduced by the Government of the Netherlands in 1991. The scheme there is directed by the Ministry of Housing, Spatial Planning and the Environment, in close co-operation with the Ministry of Finance and the Ministry of Economic Affairs.
In the Netherlands, there is a very close link between Government-sponsored research and development and the accelerated depreciation scheme. About 60 per cent. of the technologies placed on the list were sponsored by the Dutch Government at an earlier phase of development, so it has proved a valuable link, ensuring that the early stages of research and development are truly effective in being converted to new manufacturing technology.
Several people have remarked to me that it is important that the decision makers are educated so that they appreciate what environmental technology is available. Firms report a surprising ignorance among the people who make the purchasing decisions. I hope that the publicity that surrounds the Bill, which has attracted a great deal of interest, will encourage the decision makers in industry, in local government and in central Government to be more aware of the innovation that is available and to take advantage of it.
My hon. Friend the Member for Dunfermline, East (Mr. Brown) has produced a new economic strategy paper, "Rebuilding the Economy", which asserts that the Opposition's
commitment to raising the quality of our environment is paralleled by our determination to ensure that Britain seizes the enormous market opportunities for environmental technologies.
My hon. Friend has promised to pursue a three-point strategy to raise domestic output in environmental technologies as the base for our export drive. The Bill fits well with Opposition policy.
Question put and agreed to.