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Helen Goodman (Bishop Auckland) (Lab): Is not the right hon. Gentleman confusing the costs of tackling climate change and making the investment to become more efficient with the notion that those costs will reduce national output? Tackling climate change will not necessarily be a dampener on the rate of growth of the economy. Indeed, it could be an economic opportunity.

Mr. Letwin: To a degree, the hon. Lady is right. Parts of the wide portfolio of measures that need to be taken to get anywhere near the 60 per cent. target by 2050 have present value advantages and, almost certainly, long-term economic gain attached to them. A classic example is home insulation with fibreglass. There is no doubt that, for most householders, that is already an economic proposition. Part of my case against the Government is not that they have not sought to promote such insulation, but that they have not found an effective means of doing so. Most of our countrymen do not know how they can insulate their lofts, do not know what the economics look like and therefore do not recognise or realise that economic advantage.

We should not delude ourselves. The number of cases in which early economic gains would be made as well as climate change gains is limited. In many other cases, there would be social and economic costs, many of which would last for a long time as well as having a short-term impact. If we were to run the electricity supply industry as cheaply as possible, it would persistently fail to contribute to climate change goals. There is a contrast between what the economics of the situation would dictate and the dictates of climate change. Of course, those relationships alter from time to time, sometimes adversely and sometimes favourably. At the moment, gas prices are rising and coal prices are falling, and that has an adverse effect on a climate change strategy. At other times, technology and other changes will have a different effect.

My point is that we must not delude ourselves. If we are serious about the issue, as opposed to merely playing with it, we need a range of measures over the next 50 years that will have economic costs. We should not
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think that we can get away without such costs and we have to recognise that, in a democracy, considerable pressure will be felt against such measures. There will also be social costs, such as people having to live next to things that they may not want to live next to, or people having to see things in the countryside that they might not want to see. Those costs also have to be overcome. We therefore need a clear-minded, effective external framework that constrains democratic politics where there is a consensus, in order that we can make real progress over a sustained period.

Colin Challen: Will the right hon. Gentleman clarify exactly what that would be called? Only the other day, I heard a proposal for a carbon policy committee, analogous to the Monetary Policy Committee, that would set an annual carbon budget independently, outside the control of the Government. Is that the kind of proposal that the right hon. Gentleman is making this afternoon?

Mr. Letwin: The hon. Gentleman asks a good question and the honest answer is that I do not yet know. I am in discussion with my hon. Friends to come up with a view about this. Friends of the Earth is promoting a climate change Bill that will advance a view that may or may not be similar. I believe that there is considerable interest in the idea on the Liberal Benches and I suspect that we may be able to persuade many Labour Members to share that.

I hope that we can reach the point where, no doubt with variants for discussion, we can all agree that there needs to be some form of framework. It may involve a proposal of the sort that the hon. Gentleman mentioned, or other mechanisms. But what is clear to my mind is that we cannot simply rely on constantly hoping that the Government of the day will do everything that needs to be done, hang the democratic effects, because we live in a democracy and there are democratic pressures and we would be asking our population to take present pain for future benefit, which is a difficult thing to achieve, so we shall need a very special mechanism if we are to do it over the sustained period that is required in as consistent a way as is required.

Norman Baker: I want to ask the right hon. Gentleman a serious question in response to the serious points that he is making. I accept that it is sometimes difficult for a Government of whatever complexion to take decisions that may be deemed necessary but have short-term political disadvantage, even if they are necessary in the long term. I refer to the letter sent by my right hon. Friend the leader of the Liberal Democrats to the leaders of the other two parties, seeking a common agreement—at least a baseline agreement on which we could all build our different structures. Is the right hon. Gentleman minded to give a positive response to that initiative, so that we can genuinely find a common platform, at least at a baseline level, that takes us slightly further forward in a non-partisan way?

Mr. Letwin: As the hon. Gentleman has offered a serious question I am going to make an admission. By the sound of it, when that letter was sent I was shadow
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Chancellor, not shadow Secretary of State for Environment, Food and Rural Affairs and, until he mentioned it an hour ago, I had not the slightest knowledge of its existence. I shall try to trace it, but let me offer him something that it is within my power to offer him: wholehearted consent to discussions with him and with the Minister or the Secretary of State about these matters, in an effort to discover the extent to which we can agree on methods, as we are already agreed on goals.

Let me turn to the main point that the Liberals are making in their motion, and with which I also agree. This is not in the spirit of criticism of the Government but in the spirit of offering a constructive way forward. [Laughter.] That is not an ironic remark. I mean that genuinely. The spokesman for the Liberals said, and I understand his motivation in saying it, that the Prime Minister was right to go into the G8 saying that his two priorities were global poverty and climate change. I agree with the hon. Gentleman that, as an objective assessment of the problems facing the world, the Prime Minister was right. Given that we are reasonably prosperous and reasonably at peace, those are the two great issues facing the world that probably most need tackling. I am not so convinced that the Prime Minister was necessarily wise to include climate change if he could not achieve more than it currently looks—I take the Minister's point that we do not yet know the outcome—as though he may emerge with. I want to explain why, and then I want to make a proposal about what the Minister and the Secretary of State might recommend to the Prime Minister that he might entertain as a possible way out of the impasse as he participates in the negotiations in the next few days.

I accept that the Minister is right to describe the international negotiations as a long-running process that will run through to the Montreal meeting and beyond. Indeed, it dates back many years to the formation of the original framework convention. I agree that that process exists, but the business of those negotiations is best described, roughly speaking, by the analogy of a large boulder being pushed up a steep hill. It needs a constant effort to go up.

Mr. Morley: Like everything.

Mr. Letwin: It is not quite like everything, because if we stop moving forward with some cases of public policy, we just stay stationary. This process is not like that. If the boulder if not being pushed up, it will roll down. In fact, if the G8 summit is seen as a reverse, it will be a reverse. As I found when I was negotiating the Intelsat agreement, there is a terrible tendency in international negotiations for the parties to decide that, if the thing is too difficult, they will turn their attention elsewhere. There is a real risk that, by elevating climate change as a major component of the G8 negotiations, the Prime Minister will have created the basis for a negative impact from the G8 summit that might not have occurred if he had not originally so elevated it.

The Minister was engaged in a subtle and rather elegant manoeuvre to persuade us that, after all, the G8 summit was no more than a small part. That may be a useful part of the rhetoric of avoiding the problem, but I fear that there is great expectation not just in the UK press, but in the world's media, and if the G8 summit
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does not produce a noticeable step forward, it will be difficult, even with the massive presentational skills of the Prime Minister and the Government, to persuade the media not to regard it as a significant setback. Certainly, the Minister and the Liberal spokesman will be as aware as I am from meeting the non-governmental organisations that there is widespread scepticism and concern among the NGO community, which will be reflected into the media.

How then can the Prime Minister and the Secretary of State, even at this late stage, hope to make some significant progress from the G8 summit? In answering that question we must admit, of course, that it is not the case the US will sign up suddenly or, indeed, at any time to the current Kyoto agreement. Nor is it the case—I very much take this point—that the US will sign up until and unless it believes that China, India and probably Brazil will also come into the fold.

I accept therefore that this is a jigsaw puzzle and it is a mighty difficult jigsaw puzzle to get right. It is difficult to find the pieces that lock together in the right way. I also accept that that will not occur at the G8 meeting. That need not be fatal if—this is what the Prime Minister ought to try to negotiate—what comes from the G8 summit is not just, for example, a commitment to a nugatory investment in certain kinds of technology or warm words, but rather a definitive process, with a timetable attached, so that people can see that—between the G8 summit and what happens at Montreal and, indeed, beyond—the US, together with China and India, has been brought into a process that stands the chance of creating a new agreement within the framework convention. In principle, that seems an achievable goal.

I am not so close to the negotiations as the Minister—still less, obviously, than the Prime Minister and the Secretary of State—but I have the sense that if the ambition is made sufficiently restricted, it will be achievable to gain progress, and be seen to gain it, which would mean that the boulder was pushed up the hill, even if only by an inch or two, rather than rolling back down.

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