Examination of Witnesses (Questions 20-36)
24 MARCH 2004
MR SIMON
BULLOCK, MR
ROGER HIGMAN,
MS BRYONY
WORTHINGTON AND
DR HUGH
ELLIS
Q20 Mr Challen: I am not really sure
that is the case; perhaps it is a grudging acceptance that they
have no choice other than to go on to a crowded tube train. More
people are now complaining that there are empty buses running
up and down the roads in London, and I believe one or two parties
want to abolish the congestion charge. However, that is another
matter. Can I just wind up, because we are short of time. In terms
of looking at the Government's road building proposals, would
you say that the environmental lobby has lost the argument—or
certainly lost the argument with the Government—in principle?
Mr Higman: That is an issue I
have been working on for a decade, and if you go back to the full
horror of the 1989 and 1990 road building proposals and then the
plans, for example, for widening the M25 in parts of Surrey in
the mid-90s, what you will find is that about 180 of the 1990
proposals were built and about 250 ( I think it is) have since
been scrapped. There is a rump in the middle that is what the
Government is currently talking about. We, obviously, are not
happy with some of those proposals. We think that they will further
reduce the incentive to use public transport and damage the countryside.
That is a debate between us and the Government. I think, if you
look at the record in the round, what you can see is that the
environmental movement has done very well in persuading successive
governments to abandon road building as a policy of first resort.
Mr Bullock: As a further point
on that, the Chancellor in his Budget said that overall transport
investment was likely to go up in the spending review, and then
we had an almost throw-away remark that, by implication, that
would mean that road building spending would go up. I believe
that probably that is just a throw-away remark but it does mean
that the spending review in the next couple of months is really
quite crucial; it could be a turning point for transport spending
to be dealing with social exclusion, protecting the environment
and providing people with decent alternatives or it could be a
continuation of road building with the damage to the environment,
the regressive nature of it and the increased demand that that
would entail.
Q21 Chairman: The Chancellor referred
to hundreds of road projects planned by the previous government
and never completed, and went on to say that the spending review
"will provide not for cuts but for real terms growth in transport
in our country." It seemed pretty unequivocal. I might have
to invite Mr Higman back to my constituency ten years on!
Mr Bullock: I think he was saying
that the transport spending will go up but then it was just an
implication that the reason it is going to go up is to fund road-building
schemes. I was not sure it was directly "It is going to go
up because of road building . . .". The wording was very
obscure.
Q22 David Wright: There are some positive
road building proposals, are there not? If you look at the M6
toll motorway, it has been, I think, fairly popular within the
West Midlands. It seems to be reducing congestion, although I
would argue that the pricing strategy for heavy goods vehicles
is probably wrong and we probably need to shift more heavy goods
vehicles. It seems to me to have been quite successful; the public
have accepted it. That type of scheme is pretty positive, is it
not?
Mr Higman: We opposed the M6 toll.
We were one of the only organisations that actually pointed out
that discrepancy in the way the toll order was made that allowed
the company to discriminate and actually discourage heavy lorries
from using it and encourage them on to the public roads. I can
see why they had an incentive to do that. I think it is early
days to say whether that is truly effective or not. The modelling
that was done at the public inquiry suggested that it would not
relieve congestion in the long run on the M6 and that the levels
of congestion on the M6 would be about the same as they were before
the road was built. It remains to be seen whether that is going
to be the case or not.
Q23 David Wright: It seems to have shifted
cars off but not HGVs. That was not the area of questioning I
wanted to pursue, I was just interested in whether you had a view
on the M6 toll because it is very close to my constituency. Could
I ask a few questions on the Climate Change Levy and the EU Emissions
Trading Scheme? The Government has previously argued firmly that
Integrated Pollution Prevention Control offered the only possible
criterion for CCA eligibility, and it now seems that they have
turned that position around. What do you make of the new eligibility
criteria for Climate Change Agreements?
Ms Worthington: It is not something
that I have worked on in a great deal of detail. We, on the whole,
believe that the existing CCAs were not transparent enough for
us to be able to scrutinise. Therefore, we were very sceptical
of the reported savings that they delivered. So, in that context,
we are definitely sceptical about the need for and, in fact, the
correctness of extending it to further industries. Until that
situation is resolved we will continue to oppose CCAs relative
to the CCL.
Q24 David Wright: Do you think there
was a significant lobby here from companies?
Ms Worthington: Absolutely.
Q25 David Wright: Are you aware of any
particular companies that were lobbying intensively?
Ms Worthington: We are not aware.
As I say, it is not something we have studied in a great deal
of detail but we know that, in general, the tax is disliked and
very unpopular—compared to CCAs which are seen to be negotiated
agreements between Defra and the trade association—and which,
as I have said, are very unclear and untransparent. So there is
certainly a sense that industry prefers the CCA over the CCL.
Q26 David Wright: The Budget contains,
to be clear, a proposal to allow participation in the EU Emissions
Trading Scheme as an alternative to adhering to the Climate Change
Agreements. Is that the beginning of the end, in your view, of
the Climate Change Levy negotiated agreement process and, indeed,
the levy itself?
Ms Worthington: It will be very
interesting to see what happens. Everything is still in flux because
the figures associated with the Emissions Trading Scheme are not
yet fixed and will not be fixed until towards the end of this
year. Companies will make an assessment based on which measure
they think will have the least effect on their bottom line. The
Commission has stated that there should be no difference in terms
of environmental equivalence of effort so that the Climate Change
Agreements should deliver the same level of savings that they
would achieve if you were in the trading scheme. The Commission
is still able to stop companies opting out if they do not believe
that is the case, which has actually led to a commitment from
government to improve the CCA target so that the second-round
CCA target will be increased to ensure that equivalence of effort.
The effect of the trading scheme is actually to drag a greater
degree of saving from those people in the CCAs, so that they should
be equal in their equivalence of effort.
Q27 David Wright: Do you see, as an organisation,
a continuing role for national energy or carbon taxes alongside
the EU Emissions Trading Scheme? We have obviously got a whole
raft of different strategies across the EU. Do you think there
should be a move to participate on an equal footing? What are
the trends, in your view?
Ms Worthington: I think the unfortunate
thing about the Climate Change Levy is that it is slightly wrongly
titled; it should be an energy tax and it has been perceived to
be a climate tax and that is why it seems now the industry is
playing the role of regulator, and the Climate Change Levy ought
to be abolished. We definitely see a continuing role for energy
taxation in the UK and across Europe, but each country's situation
with regard to energy security is very different and energy taxation
is as much a measure for energy security as it is for environmental
gain. So the two work in tandem and we would advocate that they
should continue at a Member State level.
Q28 David Wright: Do you support the
introduction of the EU Emissions Trading System? How do you view
the latest proposals on the use of foreign credits by Member States?
Ms Worthington: Friends of the
Earth has taken a largely supportive approach to the issue of
the EU Emissions Trading Scheme. It is a well-designed scheme,
in theory, and is far superior to the UK's own pilot scheme. However,
the devil will be in the detail and, of course, the two questions
that everyone is waiting to see the answer to are the overall
allocation of allowances and the level of carbon price that emerges
as a result of the balance between demand and supply at EU level,
both of which are very hard to calculate at this stage. In theory,
if it delivers a certain environmental goal then we are supportive
of it. In terms of the linking directive, we still maintain that
the EU scheme should have been maintained in isolation from flexible
mechanisms to give us more flexibility over the results that it
will deliver. However, we can see that politically it is a trade-off
between linking with flexible mechanisms and the level of the
ambition of the scheme. So that if you link with flexible mechanisms
the Commission will feel more able to impose tighter targets on
the countries within the scheme. Without the linking directive
we may have seen less stringent targets. So there is a kind of
trade-off between the two. If the link goes ahead then we are
very supportive of the UK's position that there should be a cap
on the overall use of those credits and that that cap should be
both quantitative, in the sense that only a certain number of
credits can be allowed for compliance, and qualitative in the
sense that we would want to see exclusions of Sink projects, for
example.
Q29 Sue Doughty: I am going to try and
keep it fairly brief, having had the interruption, but move on
to energy. When we start looking at carbon emissions we seem to
have a bit of a messy picture here and the Committee has been
worried about it for a while. You have recently released some
figures about the way you think 2003 is going in terms of carbon
emissions. Could you go over that with the Committee?
Ms Worthington: Yes. Each quarter
the Department of Trade and Industry issues energy statistics
which show the overall consumption of primary energy—fossil
fuels—in this country. We were able to take those figures
and derive a figure for CO2 using the IPPC methodology, which
is the methodology that is used for us to communicate with the
UNFCCC about our overall emissions. So, essentially, their top
line message was that compared to 2002 our CO2 emissions from
energy consumption, fossil fuels, was up 3% compared to the year
before, which to put it into context, actually equated to 4.5
megatons of carbon increase. If you consider that in 2010 the
whole of the renewables obligation is only designed to deliver
2.5 megatons of carbon that is a big hike and really starts to
cut into the savings that were made during the 1990s which has
enabled us to take a lead on climate change. So the picture is
not good. The principal reason for that quite sharp increase was
through the increased use of coal in inefficient power stations,
and that has led to a balance shift between fuels, between gas
and coal, and an overall decrease in efficiency.
Q30 Sue Doughty: Having said that, could
the DTI address that by tightening the sectoral targets in order
to put some correction in there?
Ms Worthington: Yes, the best
tool that we have in our armoury for correcting this imbalance
between coal and gas is emissions trading, and the current proposal
is that the power sector should take more of a burden in terms
of delivering savings through that scheme, so they would be allocated
fewer amounts relative to other industries. We believe that is
correct because that is a sector where there is the least exposure
to international competition and the most technological potential
for low-cost savings. We think they should have even gone further
than they have gone, but we are pleased they have gone as far
as they have.
Q31 Sue Doughty: Turning to wind energy,
the Government has some good intentions and was supported by the
RSPB until recently. Do you have any sympathy with the position
that the Government is in now?
Ms Worthington: Friends of the
Earth has taken a very supportive line on wind energy developments
and we believe that is justifiable because there is no source
of zero impact energy. We, as a society, rely on energy; it is
essential to maintain our lifestyles and there is no simple solution
that would enable us to maintain that standard of living without
some impact. We consider the impact of wind to be of a very low
order and in no way comparable to the impact we get from fossil
fuel burning and nuclear power.
Q32 Sue Doughty: So you are reasonably
happy about the Government's priorities still in renewable energies?
Ms Worthington: Yes, we are happy.
We consider that there still needs to be additional help for less
close-to-market technologies. The support mechanism, at the moment,
is designed to deliver least cost solutions, which is good for
now, but we will need additional help to bring those less close-to-market
technologies forward, like wave and tide.
Q33 Sue Doughty: Thank you very much
for being brief on that. I am going to turn very quickly to the
Barker Report because, of course, we had that at the same time
as the Budget. Last week you released a statement which said that
the Barker review was a "social and environmental disaster";
yet in the introduction you were talking about meeting environmental
and social goals. Are you pleased with the emphasis on social
housing?
Dr Ellis: If I could respond on
that, I think our overall response to Barker is it is probably
one of the least helpful and least authoritative statements on
the housing crisis we have had in a long time. It also has very
wide-ranging implications for the planning system. The principles
of Barker go way beyond social housing and, in fact, Barker does
not say anything new in her report and acknowledges quite explicitly
that she does not say anything new about the social housing crisis.
What she is doing inside the Barker report and what is the absolutely
essential theme of Barker is to introduce price sensitivity into
the provision of housing and to introduce price sensitivity into
planning. There is a gulf between the press reports from Barker
and the summaries of her report, and some of the most extraordinary
recommendations for the future of the planning system which Barker
contains. What those, essentially, seem to do is to misunderstand
planning by saying, essentially, that if only planning regulation
will get out of the way we could over-supply housing and reduce
housing price inflation. There is nothing in Barker—no comprehensive
assessment of environmental impact of that development. There
is nothing which links increased supply of housing to redistribution,
which is a critical issue in social housing, and there is nothing
which analyses the capacity of particular regions to take the
kind of housing which she suggests. If I just focus on one aspect
of Barker, as a planner I do not necessarily get on well with
economists, but Barker is A level economics at its worst. She
is saying that in areas of high demand we must tackle that issue
by high supply. That is a recipe for the exacerbation of regional
inequality on a spectacularly imperial scale in relation to planning.
If you try and make planning price-sensitive you have to ask the
question "What is the point of planning?" Planning traditionally
has sought to, at least, balance if not integrate public interest
objections, like sustainable development, with a rights based
democratic process, and some market sensitivities to try and mix
that pot, and it is a messy process; it is a politically difficult
process. What Barker is essentially recommending is that we solve
that problem by removing political input. There are seven or eight
references and two recommendations which suggest that locally
elected members should have less of a role in planning, and she
is also suggesting some extraordinary recommendations which would
remove the discretionary nature of planning. Just to focus on
one, which I think is the most extraordinary, she suggested that
local authorities allocate at least 40% more land for housing
than they need in order to deal with local price volatility, but
land would be released if prices breached a certain point—known
as a "price premia", which is a phrase I have never
come across before. Her essential argument is that they will set
thresholds in each particular local authority area on land prices
and when those price premia are breached there would be a presumption
in favour of the development of that type of land. That is an
extraordinarily bizarre and unworkable recommendation for a planning
system which has to deal with all sorts of other critical issues.
This is something we are developing a position on, but I want
to emphasise as much as I possibly can that many organisations
welcome Barker, I think, without reading some of the detailed
recommendations that it contains. Barker has to be set in the
context of a 20-year series of reports from Treasury which began
in the early 1990s with McKenzie, which essentially does not understand
why planning regulation has a vital role to play in local democracy,
civil rights and sustainable development. What you need in order
to balance Barker is to start again and to factor in those other
important environmental costs. The direct and practical implication
of Barker for the South East will be the most extraordinary increase
in pressure for housing, which I do not think will solve the social
housing crisis, which will breach environmental limits and which
certainly will not be sustainable. Let me say a final word on
social housing because I think our sector has not been as responsible
as it should have been in meeting the needs of social housing.
I think we acknowledge that more and more. The tentative position
we have is that the demand for social housing, as Barker recognises
(although there is a dispute about figures), should be met in
every region and that there is an absolutely straightforward social
justice case for that, but that general demand for housing—which
Barker is saying should be entirely market driven—cannot
be met in each region. What you need, in terms of general demand,
is a national spatial plan for housing which has a redistributive
nature. Without that redistributive element Teeside, where I was
a week ago, will have housing abandonment on a grand scale and
the South East will have a quality of life and, ultimately, a
poor economic performance that will result from the most extraordinary
over development.
Q34 Sue Doughty: Thank you very much
for that. I think that is a topic this Committee could probably
spend a whole session on in itself. Finally, because I know we
have got a number of other questions waiting and other witnesses,
can I turn to VAT on Greenfield sites. Barker has spent quite
a bit of time constructing arguments for and against, and some
of those arguments may not be very credible (I do not know how
you feel about that), but are there not even more problems with
a planning authority levelled development tax? If you could be
fairly brief on that.
Dr Ellis: I will be very, very
brief because our position on this is emerging, if that is a polite
way of putting it. For the last two years we have believed very
strongly that a land development tax is better than taxation.
I think that is preferable to changes to VAT, although clearly
there are arguments that VAT should have parity between renewal
and new build. The reason land development tax is much more effective
in encouraging brown field site development, for example, is it
is capturing a huge value-added when planning permission is given,
that value is created by the community's democratic grant of permission
and that resource should come back into the community. There is
a powerful case for a land development tax, it is much more effective
than the current 106 agreements, which are both regressive and
you have all of the detailed negotiations and the public mistrust.
Broadly speaking we would like to see that introduced. That part
of Barker is one of the few parts which has merit in suggesting
why it might happened. Why she sees fit to hook in to 106 agreements
is not clear to me.
Q35 Joan Walley: In view of what has
just been said about this emerging view which Friends of the Earth
have in relation to Barker, housing supply and how you balance
all of the issues that planning has dealt with, can I just ask
for your views on where you think the debate on all of this is?
Where is it being played out, is it being played out through the
press? I am not quite sure where people who have views on one
side or the other side or who are attempting to find some way
forward through these very real problems are. Where is that debate
being heard or where is it taking place? I would be interested
to know where you think the points are where that debate could
be influenced, if you see what I mean?
Dr Ellis: The shorthand response
to that is that all planning policy—we are just working
on PPS6 on re-sale at the moment as we review it—comes up
against one central problem, which is usually the DTI's or Treasury's
view of how a macro-economic model of the United Kingdom impacts
on planning. The macro-economic model is the Golden Arc, Bournemouth
to Cambridge, inside that area is the economic driver of the United
Kingdom, it is what keeps us competitive and must not be restrained.
I just draw your attention to PPS6 which now talks about managed
decline in the retail sector, and that is something that we should
be doing. Many communities are more and more being acknowledged
in the North and West as essentially being places where we manage,
decline and consolidate. Unless you can try and integrate the
needs for the social equity and sustainable development with the
Treasury's model of that economic driver in the United Kingdom
more effectively then the policy debate becomes very sterile and
is becoming very sterile. Every time we try and say "You
are over developing in to the South East" we are simply told
that will be anti-competitive, there is no way you can deliver
that. I think that issue is crucial.
Q36 Joan Walley: In terms of the Treasury
model that you are referring to, is that being shaped by the current
debate that is going on round the Comprehensive Spending Review?
I am not sure where this new vision which is coming is actually
being formed or shaped. Do you see what I mean?
Dr Ellis: From my point of view,
looking at it from a planner's perspective through ODPM, all I
can say is that the PSA agreements as they stand at the moment
are the most influential mechanism for the Treasury's implementation
of its model on planning regulations and, to some extent, environmental
regulations. PSA 6 in relation to ODPM in relation to planning
has been influential right across the board. I know under the
PSA review the question has been raised quite innocently about
whether or not sustainable development might feature more heavily,
particularly in relation to the climate, in the PSA agreements,
which of course it should.
Chairman: I have a strong feeling that
the question of Barker and all that her report entails is something
which the Committee would wish to return to. That concludes our
questions to you. Thank you very much indeed, we are very grateful
to you. It has been a helpful session.
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