A second term for Labour: what's in it for industry?

It's all a bit different from last time. Back in 1997, the excitement of the Conservative's uprecedented wipeout led to feelings of a new beginning for Britain, and industry looked on with uncertaintly to see what the callow new faces in government might have lined up for them.

This time, only the most optimistic of right-wingers expected a change of government. And sure enough, Tony Blair and friends swept back into power on a wave of popular apathy. But what can industry expect this time around?

Although the face at the top is the same, the reshuffle of the Cabinet surely foreshadows a change in emphasis for second term policy. Out goes Stephen Byers from Trade and Industry, to be replaced by Patricia Hewitt. Environmental responsibility shifts from John Prescott to Margaret Beckett. And a new Cabinet post of Secretary of State for Work and Pensions is taken by Alastair Darling. Clearly, the government is taking employees' rights seriously.

The environment is the area which has triggered the most public concern for the process industries, and the government's response has not met with a great deal of approval from business. The Climate Change Levy has been controversial since it was first mooted, and with bills soon to arrive for the first months of the levy, it's an issue that won't go away.

The first change that's likely to be seen here is the introduction of an emissions trading system to run alongside the CCL. Companies will be issued with 'emissions credits' allowing them to emit certain maximum levels of carbon dioxide and other greenhouses gases. If they reduce their emissions, they will be able to trade the 'spare' credits with other companies, or other sites within their own organisation. According to the most recent proposals, the total number of credits is likely to be reduced year-on-year, to decrease overall emissions.

Initially, this scheme is likely to be available only to a few large companies. Shell and BP have collaborated on their own internal emissions trading systems in anticipation of this, and should be able to switch over to a government-run scheme with few problems. The government may also be hoping that an international emissions trading scheme may be established - in which case, the UK would be in the forefront in negotiations.

However, the scheme has already met opposition. The Chemical Industries Association, for example, opposed the idea of a total emissions cap, as it could limit the expansion of the industry. Instead, it says, a system which emphasises reduction in emissions per tonne of production would encourage industry to improve its energy efficiency while still allowing it to increase production to meet demand.

The CCL itself is also likely to be changed. The easiest alteration to the current system would be an expansion of the 80 per cent discount system to other areas of industry, especially those with a high proportion of smaller companies. Further afield, the focus of the tax might shift to production of CO2, which would charge companies more directly for the emissions produced by the energy they consume.

Companies will also need to get used to the idea of worker's councils. Widespread in Europe, these may be enshrined in European Union legislation - meaning that all companies, regardless of size, will have to consult their employees over such matters as staff reduction, sale of subsidiaries, and mergers. The move is opposed by the CBI, and the UK government had been blocking proposals for EU legislation.

And as for the Euro? Well, the single currency debate is likely to fill our news-papers over the coming months, if not years. The process industries are, almost unanimously, in favour of the Euro - many of them use it already and, after all, very few of the largest industry players in the UK are actually British. However, the timing of the promised referendum is nearly as contentious as the Euro itself - it could be any time in the life of this parliament, or not even then.

As for science, the signals are that the government will seek to increase further the number of collaborations between academia and industry. Technology transfer is seen as a priority, and incentives for the launch of spin-off companies from university departments are a possibility.

Meanwhile, the Science Ambassador programme, which aims to improve the image of science in schools, is likely to be expanded, in the hope that it can encourage more students to enter science and technology courses at university - and stay within the industry on graduation.