Examination of witnesses (Questions 330
- 340)
TUESDAY 21 APRIL 1998
MR CHARLES
SECRETT and MR
DUNCAN MCLAREN
330. A specific example of this tripartite
approach is the VAT on fuel on social justice terms as opposed
to the environmental concerns. In Friends of the Earth's view,
was it right that there should be VAT on fuel but with full compensation
to the less well-off pensioners as an environmentally just measure
in itself, or would it have been right not to have given full
compensation to pensioners on the basis that the priority was
reducing fuel compensation which in this case was greater than
the social justice argument which is the other part of your tripartite
approach?
(Mr McLaren) I think the question of compensation
is broader. We would advocate and have advocated that the compensation
should come in capital investment in improving the energy efficiency
of the homes of people in fuel poverty thus allowing them to reduce
their fuel bills despite increases in the unit cost of energy.
In the absence of such a programme we would require as a social
tool the appropriate compensation.
331. You would have been very happy for
VAT on fuel at the same rate for everybody if pensioners had extra
insulation or something like that?
(Mr Secrett) Again it is important where you can
see how two different policies can move relative to each other
over time, or two different compensatory mechanisms in this case
can move relative to each other over time. As Duncan said, in
the absence of the capital investment that solves the problem,
then one has to benefit not just pensioners but the fuel poor
and one has to use the benefit system to be able to do so. We
accept that there is a range of options. Another option if one
is raising money—this is again one of these examples where
from our perspective you have to take the "joined-up"
approach—is to be able to work out which thing you do when.
We do believe that it is necessary to increase the prices of scarce
resources and not just to rely on market forces to do that, and
that is why we have taxation and we do think that the fuel price
escalator is a good thing. We would have kept VAT on fuel. We
do not think that reducing VAT on fuel use has done anything to
help the fuel poor because the VAT on the standing charges and
on fuel is such a tiny proportion. If you want to help you help
in other ways. You can help through the benefit system, you can
help through a capital investment programme and you can help through
a charging system if that is what you so want to do. Whether it
is for energy or for water, another resource where pricing controls
are likely to come in sooner rather than later, we would say we
can define, although we may not be able to do it absolutely perfectly,
or people can define for themselves their relative standards of
income and wealth, and we can define a reasonable use for a basic
resource, whether it is an energy resource or a water resource.
It would be perfectly possible to recycle revenues raised from
people who are more wealthy paying higher levels of tax for higher
increases of use to give a base rate use that is totally free.
That would be another way of doing it.
Dr Iddon
332. Could I explore in greater detail the
indicator being proposed as the headline indicator by the Friends
of the Earth. Could you explain how we go about that in a little
more depth because I am not sure I understand that.
(Mr McLaren) I will happily submit this document
and indeed more if it is desired to the Committee. What we are
proposing is the adoption or at least an experimental adoption
of what is called the Index of Sustainable Income Welfare which
is based on the same figures for economic consumption as GDP but
adjusts it in various ways to take account of factors such as
the inequality of distribution of income, environmental costs
and defensive expenditures against environmental damage, some
social costs and defensive expenditures against crime, for example,
and also adds in some factors which are currently not valued at
all in GDP such as unpaid work in the household, which of course
is mainly undertaken by women and currently valued at absolutely
zero in that headline economic indicator. The result of that is,
as I say, to produce a form of adjusted GDP and we are advocating
the ISEW not because we believe it is the ultimate ideal headline
indicator but because it is something that has had adequate research
done into it. It has been calculated for at least ten countries
including a developing country, and we know it could be applied
more universally and be an effective tool for comparison as well.
Rather than advocating something completely untested, we are suggesting
this would be a very strong step in the right direction for a
headline indicator.
333. Are other organisations working in
the same field in agreement with you? Is there a cross-agreement
across the environmental organisations about this headline indicator?
(Mr McLaren) To be honest, I am not sure. There
are other organisations that are promoting the ISEW, most notably
amongst them the New Economic Foundation with whom we collaborated
on this. I am also aware that in principle the Real World Coalition
endorses the same approach to indicators and the idea of a headline
indicator of this form. In that sense you could say a whole host
of environment, development, social justice and democratic renewal
organisations are advocating the same thing.
334. Are you advocating that we adopt a
single indicator and drop all the ones introduced by the previous
Government in 1996 and still used by this Government?
(Mr McLaren) No, we are advocating there must
be a headline indicator otherwise all the other indicators will
run into conflict with the existing headline indicator of GDP.
We are not saying that the others are therefore redundant because
obviously there are lots of other tests to be passed, as it were,
where the other indicators are very useful. It is no good amalgamating
everything into one indicator. This indeed is one of the key failings
of GDP—that it attempts to do too much rather than being
disaggregated and measuring social progress, environmental progress
and so forth in disaggregated ways.
Joan Walley
335. I am interested in exploring how those
proposals square up with the changes which the Government has
made on effective environmental appraisal. In a way what you are
talking about is a kind of substitution for all these separate
things that are going on, environmental appraisal on the one hand,
the new guidelines on the other, and the comprehensive spending
review which has not yet but could actually include sustainable
development, the various consultation documents like the one for
example on welfare reform, and the whole way the Treasury needs
to be at the heart of all of this as well. Going back to what
you were saying at the very beginning about the need to have political
leadership and environmental leadership and the Prime Minister
setting targets and deadlines moving us on to this agenda, how
do you see a Committee like this addressing separate things which
are all going on and coming forward with a set of proposals that
would actually home-in and insist the government focuses on this
kind of environmental appraisal which is really genuinely at the
heart of decision making not just for Green Ministers but for
all ministers and government departments.
(Mr McLaren) Thank you. That is a challenging
question because I am not actually aware in detail of how the
Committee functions but I would see the Committee's current investigation
into greening government as a strong platform for making recommendations
of the form we have been advocating. It is also possible to take
some of that analysis and understanding into some of the detail
of how environmental appraisals should be conducted and we do
have some comments on the aide-mémoire that has been produced
and how effective that can be.
336. Through you, Chair, could we ask for
the Committee to be supplied with those please? I am sorry I did
not mean to interrupt your flow on that.
(Mr McLaren) If we are providing them in writing
I will just highlight one of the problems. The current aide-mémoire
favours the idea of economic evaluation of the costs and benefits
of the policy which tends to lead into a very similar trap as
GDP as the headline indicator. It raises different problems, though,
essentially because the only practical way of obtaining economic
evaluations for many of the concerns that are raised, is by contingent
evaluation and asking people what they are willing to pay to avoid
having that problem. That is fine up to a point but there are
three or four major problems. What people are willing to pay is
constrained by their income. It is therefore intensely inequitable
and leads almost inevitably at project level to the most polluting
and unpleasant projects being located in the poorest neighbourhoods.
It also means you cannot ask future generations about the values
that they would place on that environment and if I can indulge
myself, it means you cannot ask other species on the planet. As
someone said to me recently, to assume the world revolves around
humanity is as bad as assuming that the sun revolves around the
world. We are part of a web of species on this planet and other
species' values in the environment may be important not only to
them but also to our survival. With contingent evaluation techniques
you cannot obtain any of those values. You will therefore consistently
undervalue the environment, you will undervalue equity, the first
point, and therefore we do not believe that it is appropriate
to prefer such economic evaluation in policy appraisal. It would
be far better to find ways such as through citizens juries of
obtaining equivalent political and participatory values for the
economic components so that they can be compared with the environmental
components which are not so reasonably expressed in economic terms.
Mr Truswell
337. This answer covers most of the question
that I was about to ask. It was a question that Dr Iddon asked
previously of CPRE about the importance of public opinion, how
you mobilise it and whether this is a public opinion egg that
has to be formed before the chicken of government action springs
forward. We all remember the halcyon days of the late 1980s where
there was considerable public awareness and considerable public
pressure for improvements in environmental policy and environmental
developments. We got This Common Inheritance, the White Paper.
We got lots of local initiatives. My own local authority, Leeds
City Council, developed a strategy based on a Friends of the Earth
charter for local government. It just seems to me we have lost
that momentum and we almost want to go straight to government
and not "pass the go" of public opinion. I am just wondering
what we can do as a Committee, what Government should be doing
andwhat everyone else including non-governmental organisations
such as yourself should be doing to develop that degree of public
awareness and public demand for the sort of action you have so
eloquently and evangelically expressed to us today.
(Mr Secrett) This is the big democratic question—who
does what, when, where and why? Absolutely! It goes to the heart
of answering questions about what is the role of government and
what is the role of civil society. We have an institutionalised
process which is helping our society and others to address these
questions which is Agenda 21. Certainly as we understand the principles
of Agenda 21 it is as good a mechanism as any, not least because
it has been officially endorsed and that is good. Something else
that we have to remember, though, is that we are in a very different
phase to the one we were in in the late 1980s, very very early
1990s, because in a sense it was like the dam burst and after
30 years of campaigning not just by NGOs but also by environmentalists
in government, in academia and in industry, the world woke up
to the fact that there was an environmental crisis for the first
time; and one saw that political leadership coming in as a crucial
element in helping to raise awareness. Also very interesting comparisons
can be made between the role of the media then and the role of
the media nowadays, as well as government and the rest of civil
society, as to why there was much more public debate and attention
focused on this crisis. However, that was also the easy part because
that was just being able to explain what the problems were and
explaining what the problems are, particularly for our type of
public debate in our type of society, often attracts far more
attention because of the black and white juxtapositions and simplifications
that can be made; and the far more difficult business that we
are in now, much less sexy in headline terms, is working out what
the solutions are and being able to do that systematically. In
terms of the part of your question relating to the Committee and
Government, again my starting point is Agenda 21 where we are
recognising through the Agenda 21 process that everyone has a
role to play. And it is about creating creative partnerships,
it is about recognising what is it industry and government and
civil society in its diversity should do at a local level, at
a national level and internationally. I am very pleased to see
the Government endorsing the Agenda 21 process and boosting it,
and a target being set again by the Prime Minister saying all
local authorities should have an Agenda 21 process up and running
and established by the year 2000. Let's see that through. There
is an information role for government. But we live in a very sophisticated,
highly intelligent society, whatever debates go on about the level
of our formal education and provision of education services. Through
mass media, people are extremely sophisticated throughout society
about who should be doing what and what their awareness of problems
is. We would think that while Government does have a role to play
in continuing to highlight information and provide information
about both environmental or sustainability problems and solutions,
its best and most convincing role is by fulfilling its own responsibilities
and delivering and, that that will most convince others that they
too should fulfil their own responsibilities. It is the leadership
question again. The way Government can do that for its citizens
is obviously through penalties and rewards. We have talked briefly
about the tax system and public expenditure. It can set up processes
like Agenda 21 which are about involving people and other parts
of society to address those problems and be part of those solutions,
choosing solutions in a meaningful way. Government can provide
the public service infrastructures that people need to be able
to lead greener lives, whether that is to do with the type of
garbage collection that goes on and waste minimisation practices,
or whether it is to do with energy efficiency or renewable investments,
and the way that basic resources are provided for or to do with
the transport side, for example, on public transport. All these
ways Government can both do its bit and convince other people
to do their bit as well. So where the Environmental Audit Committee
fits in - I will bring you back to an earlier answer—we
think the Environmental Audit Committee has a crucial role in
both reviewing what is going on systematically and thoroughly
and, if you like, holding political decision-makers to account,
but the other side of the coin for the Committee, as it is for
the rest of Government, is to be able to drive forward best practice.
We think through the Committee's early involvement in both legislative
and policy proposals you can do that. It is your job to decide
which particular areas to focus on as priorities across the whole
range that is potentially available.
Joan Walley
338. In terms of that partnership you are
talking about, in terms of what this Committee and the Government
can do, in terms of building a civic society, what about the United
Nations, what about the leadership there and at the international
level in order to bring it round and complete the circle with
Agenda 21 and with what national governments are doing as well?
(Mr Secrett) It is at all levels. We have hardly
touched on the international level at all. We could have done,
for example, in relation to policy mechanisms that operate at
a global level and the relationship of government departments
like the Department of Trade and Industry to the Multilateral
Agreement on Investment which has enormous implications for our
country in terms of being counter-productive and counter-veiling
to the sustainability policy objectives that other government
departments are taking. On the UN system—and we had reference
to fitting in with the CSD process—we have to co-ordinate
at a global level too. I think one of the facts, the inescapable
political realities that we as well as other nations have to come
to terms with, is that a sustainable development agenda is basically
a one Planet agenda; and that means that you cannot decide everything
locally or nationally because in the context of a planet a Member
State is a locality and therefore the inescapable political reality,
the driver of a sustainable development agenda that has been unfolding
since the Bruntland Commission, through Rio and through Earth
Summit 2, and for the future in relation to the CSD or the United
Nations as a whole, and its institutions like the IMF and the
World Bank, is that we have to have levels of government and administration
and policy making operating globally to this agenda that dove
tail—and my God this is a political challenge—with
appropriate responsibilities and sovereignties being carried out
supranationally at the level of regional institutions like the
European Union or ASEAN or any of the other regional blocks that
exist, and aswell at a national level and at the really genuinely
local and community level.
Chairman
339. That is a big agenda!
(Mr Secrett) It is. That is the exciting part
about it.
340. Thank you very much indeed for the
very forceful and very clear views of Friends of the Earth. It
is extremely helpful to have such a clear view put to us. May
I include in that your very strong view about the role of this
Committee. That is very encouraging.
(Mr Secrett) We look forward to providing proper
written evidence without going on too long. Thank you very much
indeed.
Chairman: That will
be appreciated.
|
