Select Committee on Environmental Audit Minutes of Evidence

Examination of Witnesses (Questions 200-209)


Mrs Clark

  200. I am going to open up some questions on the Tobin tax, which, as people will know, is a tax on currency transactions. And, as you will know yourself, this possible tax has actually got considerable support in the House of Commons, in particular in response to Harry Barnes's Early Day Motion, and also supported by several major unions, and, indeed, some non-governmental organisations, some of whom actually are here today. Now you actually replied to my most recent letter to the Chancellor, as you said, as the Minister responsible, and you gave me some news of the agreements reached at the ECOFIN meeting in Lie"ge on 22 September this year, where European Finance Ministers agreed that further work was necessary to examine the economic implications and practical issues raised by such a proposed tax. And in your letter, you said that this was actually part of a wider study by the European Commission into the challenges posed by globalisation. So my first question is, when do you expect the study to be completed, and the follow-up to that is, how is the United Kingdom's decision affected or limited by the results of this, and, in other words, can we do a UDI on this?
  (Mr Boateng) No, we cannot do a UDI, because the whole basis of the tax, the successful operation of the tax, is dependent on others being prepared to operate it, and, therefore, it is actually important to arrive at an international consensus on it; the work stream launched at ECOFIN on 22 September, which we supported, will help on that. I do not think the Commission have yet given us any timetable. We are obviously enthusiastic about the study. There are also studies being conducted by the OECD and the United Nations; they, too, are important, if we are to address successfully some of the technical complexities that are thrown up by the tax. So we have agreed the need for further work. Also, within the Treasury, we seek to keep in touch with the academic, and indeed wider, NGO, debate in this country and overseas, and if the studies generate the practical suggestion as to how to overcome the problems associated with implementing the tax, well, that is something that we will obviously need to consider very seriously.

  201. Right; so sort of pressing you slightly further on that one, is it fair to say that the Treasury position at the moment is, `okay, there are some practical difficulties that need to be looked into and ironed out,' but, given the fact that they are, you are not opposed, in principle, to the idea of an international tax, in fact, you are in favour of it, given what I said before?
  (Mr Boateng) We are not opposed to the Tobin tax in principle, we are not convinced that the tax will be particularly effective in stabilising international capital flows, but we are attracted by the revenue-raising possibilities presented by the tax and are committed to exploring the full range of options for increasing the amount of financing available for development purposes. And, indeed, the Chancellor, most recently, in his speech in New York, called for the international community and national governments to substantially increase their Development Assistance budgets, and called for a new International Development trust fund, and now, arguably, that trust fund, were the technical issues in relation to Tobin to be successfully overcome, could be the recipients of a Tobin tax. But the Chancellor's commitment to this is not dependent on us overcoming the technical obstacles to an effective tax of this sort, he wants to see a fund set up in any event.

  202. Right; well I shall certainly take that as tacit encouragement to continue the campaign. You have mentioned the Official Development Assistance, and I would like to press you further on that. It is predicted to rise from a figure of 0.26 per cent in 1997 to a stunning increase of 0.33 per cent by the year 2003-04; but it is hardly a mind-breaking increase, is it, really? And why is it so far short of the given OECD target of 0.7 per cent; is this target obtainable, is it realistic, if not, why not, and, if so, when do you hope to achieve it?
  (Mr Boateng) It is certainly realistic, it is certainly attainable, and, given our present levels of spending in this area, we are entitled to have a degree of optimism that it will be reached. The Chancellor has made it absolutely clear that we have got to find ways of increasing financing for poorer countries; it is important to see what we have done, which is a marked improvement on what went before, I think everybody would agree, in the context of our commitment to debt relief and to our overall policy, in relation to International Development. So no room for complacency, but some real steps forward made.

  203. Just finally, could I ask whether you agree yourself with the following statement. There has been a recent review by the OECD of foreign aid performance, and it concludes, and this is what I would like to ask you whether you agree with or not: "It might well be argued that if more donors had met the ODA target then the mass poverty and humanitarian emergencies, which persist in many parts of the developing world today, might have been largely avoided." Do you think that is a fair assessment?
  (Mr Boateng) I think it is precisely the sort of assessment that one would expect from the OECD. I think it is very helpful. I think it is a goad to us to do better, and I think we should also be very clear that we have a number of important partners in the international community, amongst the developed world, who would do well to emulate our own example since 1997 in this area.

Sue Doughty

  204. I will be very brief, I am quite aware of the time and that we are drawing to a close. Just a brief comment about the Spending Review and the environmental guidance to Departments to produce a Sustainable Development report. Rather than us going into a lot of detailed questions, could you just give us a quick brief about, when Departments produce these reports, how we will publicise them to these Committees and how you will review them within the Treasury?
  (Mr Boateng) We will not be publishing the Sustainable Development reports, we are publishing the guidance, but the reports themselves are internal documents, they will be closely associated with Departments' bids for resources, and we do not think it would be right, quite frankly, to publish them. However, we have published the guidance, and the Committee was very keen that we should do that.

  205. But rather late?
  (Mr Boateng) We have also developed a procedure which will involve my meeting with Green Ministers, with Secretaries of State, to indicate to them very clearly the importance of their ensuring that their bids reflect the guidelines; also making clear to them our commitment to ensure that integrating Sustainable Development into the Spending Review is a commitment that we take very seriously. And when they meet with the Chief Secretary, in the course of the PSX meetings, they can expect the Sustainable Development implications of their bids to be part of the subject matter of those meetings. That is a very clear steer to departmental colleagues that we mean business.

  206. And will there be sanctions if they do not meet the guidelines?
  (Mr Boateng) My experience as a spending Minister is, and you will know this, Chairman, only too well, one wants one's bids to be successful, and one couches one's bids in a term that is likely to make them successful. And if the clear steer from the Chief Secretary is that you had better take Sustainable Development seriously, and the Financial Secretary is going to be meeting you in advance in order to make sure that you understand the guidelines and their purport, then you are likely to take that pretty seriously.

  Sue Doughty: Thank you very much indeed.


  207. Minister, you obviously intend to be tough with other Departments, as regards Sustainable Development, but you appear to have no strategy internally, inside the Treasury, for raising awareness of Sustainable Development as an issue amongst your own staff. The only training on Sustainable Development is as part of the reception training for new recruits.
  (Mr Boateng) We have gone a bit further than that since that information was provided to the Committee. Shortly after I became Green Minister for the Treasury, I spoke at the Sustainable Development Forum for the Chancellor's Department, made it clear to them that Ministers would be expecting the Department to ensure that it took Sustainable Development seriously, and I think that message is getting through. And certainly I was quite pleased to see, in terms of the approach that we have taken, for instance, to water, at GOGGS[1], that we are on target to have reduced our water use, I think, by more than a half. I have got the figures here. We have got currently an annual water bill of £40,000, the expected bill after participation in the Watermark Project is £14,000; so that is a significant saving of £26,000. In terms of the use of the Government estate and the Sustainable Development Framework there, in the Greening Government outlines, we have achieved an `excellence' rating; and in terms of the refurbishment of the west end of GOGGs, again, there is a requirement on our private sector partners there to use their best endeavours to maintain and to obtain maximum credits from the Building Research Establishment environmental assessment methodology. So I think you are absolutely right, if I may say so, to point out the need for us to tackle the issue seriously and to be leading by example, and I hope, when we are judged on these matters, as we surely will be, in due course, we are found to be doing that.

Mr Challen

  208. I am not sure I understand why the Sustainable Development reports will not be published?
  (Mr Boateng) Because it would compromise, we believe, the integrity of the process in which Departments must feel able to put their bids in, in a way that ensures that they are judged on their outcomes rather than their inputs.


  209. Would you consider the National Audit Office might have a role in looking at the auditing process?
  (Mr Boateng) I would be very, very reluctant to give any commitment to alter the current arrangements in relation to the Spending Review, it is something which, as you know, is a very, very closely guarded process, both by the Treasury and by the spending Departments.

  Chairman: Minister, thank you very much indeed. That was a very rewarding session.

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