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9 Jan 2007 : Column 21WH—continued

10.50 am

The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Barry Gardiner): I am delighted to respond under your chairmanship, Mrs. Humble, to this important debate. First, I apologise on behalf of my hon. Friend the Minister for Climate Change and the Environment, who cannot be with us this morning because he is attending a Cabinet Sub-Committee meeting about the Climate Change Bill and what it should contain. I hope that for all Members present, it is a reasonable excuse.

I am always proud of my colleagues, but not for a long time have I been quite so proud of a group of them as I have been during this morning’s debate. I congratulate my hon. Friend the Member for West Bromwich, West (Mr. Bailey) on the way in which he introduced the debate, on the extraordinary way in which he has championed his constituency and its interests, and on the responsible way in which he has done so by setting the issue within the context of climate change as a whole. My hon. Friends the Members for Llanelli (Nia Griffith), for Aberavon (Dr. Francis), for Sheffield, Hillsborough (Ms Smith), for Middlesbrough, South and East Cleveland (Dr. Kumar) and for Bishop Auckland (Helen Goodman) all replicated that when they spoke. It has been a good debate, and the speeches from Opposition Members contributed to the way in which the debate was conducted.

I shall make some general remarks about emissions trading, and then I want to focus on the questions that have been raised. I shall try not to take interventions in the hope that I will get through my remarks and answer all those questions.

Last year there were many positive developments in the EU emissions trading scheme. Phase 1 was always a learning-by-doing phase, recognising that emissions trading had not been tried before on that scale, and that it was likely that there would be lessons to learn. We have heard this morning that that was very much the case. The first significant and positive lesson of
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phase 1 is that it is possible to take multilateral action to tackle climate change. The EU ETS has been developed and implemented against a tight timetable. Although not all member states were able to meet the challenging timetable, the scheme was operational throughout the majority of the EU by early 2005, demonstrating that it is possible to take swift and decisive action to implement measures to combat climate change.

The first year’s results have reinforced that positive message. They show that the mechanism is viable and that the scheme is functioning as expected. Throughout Europe, operators monitored and reported their verified emissions and surrendered allowances for 2005. Compliance in the UK has been excellent; almost all operators surrendered sufficient allowances within the deadline. The first year of the scheme has shown that there is a solid base on which to build for the future—but by golly we have to build.

Last year was also important for the development of phase 2, in which a key aim was to create as level a playing field as possible for businesses throughout Europe. A key UK priority for phase 2 was to work towards more consistent coverage of emissions sources throughout the EU’s 25 countries in order to reduce the potential for competitive distortions. The UK, in conjunction with industry and other member states, developed consistent definitions of the expansion activities to help ensure consistent coverage of the new activities. The Commission has shown that it is using those definitions when assessing member states’ phase 2 national allocation plans.

In addition to those lessons, the operation of the scheme to date has highlighted many other issues about which member states and the Commission should be aware. Some, such as the handling of market sensitive information, can be and are being carried out now; others such as the scheme’s impact on smaller emitters, however, must be addressed through legislative changes. The Commission’s review of the EU ETS directive is considering them.

Smaller emitters make up the majority of installations covered by the scheme, but they account for only a small proportion of emissions. In 2005 about 60 per cent. of installations in the UK emitted less than 5 per cent. of the UK’s total emissions covered by the EU ETS. That raises questions about whether the associated regulatory burden is appropriate for those installations. The UK has scaled administrative charges and established tiered monitoring and reporting requirements to reduce the regulatory burden on the installations, and we have suggested means to exclude some of the smallest emitters from phase 2. The Commission’s review must consider whether the scheme should capture smaller emitters.

Another lesson learned was the need for a scarcity of emissions allowances. Our debate has touched on the issue, which is vital to the scheme if it is to deliver real emissions reductions and help to deliver the EU’s Kyoto commitments. The first year’s results showed that throughout Europe, emissions were lower than had been anticipated when member states set their emissions cap and allocated their allowances. However, it is evident from emissions results in 2005 that more allowances were available than were required for compliance with the scheme, deflating the value of
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allowances and, consequently, diminishing the financial incentive to reduce emissions over buying allowances.

Although it is too early to draw firm conclusions with just one year’s data, the results highlight the fact that for future phases it is crucial to set consistently realistic but tough caps throughout the EU. Since scarcity drives the carbon price, it should incentivise industry to deliver real emissions reductions. The Commission has recognised that, and in an announcement in November last year on 10 member states’ plans for phase 2 of the scheme, it asked for further work from a number of them. It is looking for significant further reductions in emissions.

The Commission set out clearly the framework under which it has taken decisions, which the UK welcomes. It has set a standard for the plans that have yet to be submitted and assessed, and it has made clear the importance of using the emissions trading scheme to achieve Kyoto targets and to make good use of the potential for emissions reductions.

Pressures for emissions reductions will increase over the next decade and beyond. It is vital for EU competitiveness that we meet those pressures through mechanisms that do not generate unnecessary regulatory burdens, that allow businesses to make their own choices on priorities, and that minimise the costs of reducing emissions. Trading does that, and it is important to ensure that trading continues to work. In addition, the UK will benefit from being at the forefront of the growing global market for carbon technologies.

During the development of phase 2, several sectors and companies raised the issue of competitiveness. The steel sector is one sector in which international competition is intense. We have consulted extensively with industry throughout the development of our policy, and we take seriously its concerns, which have been so articulately presented in the debate. To date, the signs are that the EU ETS has a promising future.

I shall now try to respond to the questions posed during the debate. My hon. Friend the Member for West Bromwich, West asked one key question, which my hon.
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Friend the Member for Llanelli also articulated. It was about global warming being global and needing a global solution, and about the danger of exporting emissions rather than reducing them. It is part of the reason why almost full business-as-usual allocations were given to industry. We recognise the concerns: they are about finding the correct balance and about the need to take sufficient but not excessive action. We are working closely with the Commission and third countries such as the USA and Australia to develop that global carbon market, and the Commission is considering the issue in its review.

Within our debate hon. Members asked questions about the need for sector-specific targets. I agree that different sectors face different competition issues, and phases 1 and 2 recognise that through the almost full allocation to all sectors other than the large electricity producers’ sector. The ETS review is also considering the issue.

The UK must play its part in the global effort to tackle climate change, and I was grateful for the consensual spirit adopted by Opposition Members, who noted how, in the circumstances, the Government have responded appropriately through our national allocation plan. The UK has worked to harmonise where possible, and to create as level a playing field as possible for industry. We will continue to do so, targeting and balancing the impact on business with our environmental concerns.

My hon. Friend the Member for Middlesbrough, South and East Cleveland also asked me a question. On carbon capture and storage, we take seriously the issues that he raised with Transco and Centrica in his constituency. I am sure that my colleague the Minister for Climate Change and the Environment will take considerable note of the project as it develops, and that he will work with the Commission to ensure that carbon capture and storage is recognised in phase 2 of the ETS and beyond. We hope that it will provide the necessary clarity for business when pursuing the schemes that my hon. Friend the Member for Middlesbrough, South and East Cleveland outlined.

My hon. Friend also asked about joint implementation projects receiving domestic support. In the time available, I cannot go into that, but I shall ensure that my ministerial colleague is in touch with him.

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11 am

Sir John Stanley (Tonbridge and Malling) (Con): In the Prime Minister’s 10th, and presumably last, new year’s message, which ran to some 1,000 words, he managed to devote just one sentence to Iraq and Afghanistan combined. I believe that the thousands of our servicemen and women serving in those two countries, who are putting their lives at risk daily, would have thought that a very inadequate degree of attention to give to those countries. I am glad that we have the opportunity this morning, in the House’s first sitting week of this year, to deal in greater depth with the all-important issue of policy towards Afghanistan.

With three other members of the Select Committee on Foreign Affairs, I made a visit to Afghanistan approximately six weeks ago, at the end of November. In the course of our visit, we were reminded constantly that security will not be the only means by which we solve the problems of Afghanistan. That is entirely correct and it is as correct in Afghanistan as it most certainly was for us in Northern Ireland. In saying that it is correct, I suggest that the converse is equally the case. Unless we get satisfactorily on top of the security situation in Afghanistan, we will not be able to achieve long-term stability for that country, make satisfactory progress on good governance and human rights there or help it to develop as a modern state, and we will certainly not be able to help it realise the considerable potential that it has for economic progress and development. The security dimension is crucial, and unless we win on security, we are at serious risk of losing in Afghanistan.

The essence of the security problem for us was shown very well in the “Dispatches” programme on Channel 4 last night. Although I noted that the Government sought to dismiss the programme as being based on out-of-date film, I thought that it brought home extremely vividly, and with absolute accuracy, the essence of the security problem, which is that NATO forces are too thinly spread in the areas of Afghanistan where combat intensity is highest. That presents our forces with real operational problems. It makes them constantly vulnerable to the possibility of finding themselves significantly outnumbered. It makes them dependent on calling in air strikes, which carry with them the attendant risk of civilian casualties and the destruction of civilians’ homes, with all the political damage that that does to our long-term objectives of winning hearts and minds in Afghanistan. The fact that we are so thinly stretched in the southern part of the country tends to make many Afghan civilians there significantly more alarmed and open to coercion by the Taliban than are reassured by our very limited presence.

There are a number of points concerning security on which I am critical of the British Government, but I do not criticise them for the lack of boots on the ground as far as we are concerned. There is no question but that the UK is doing more than its fair share in dealing with the military resurgence of the Taliban, as are the Canadians and the Americans. What is lamentable is that too many of our NATO allies, which have significant forces in Afghanistan in some cases, have
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surrounded their deployment with national caveats, and they make it difficult, if not impossible, for the NATO commander to deploy them in the areas where they are most seriously needed. I hope that the Minister will confirm that it is imperative that national caveats in Afghanistan be swept away lock, stock and barrel. All NATO forces in Afghanistan should come under the same rules of engagement and the NATO commander of the international security assistance force should be left wholly free to deploy all available NATO forces in that country in the locations where they are most needed.

Paul Flynn (Newport, West) (Lab): I believe that the number of troops NATO has in Afghanistan at the moment is about 30,000, not all of whom are combatants. The Soviet Union had 120,000, killed 1 million Afghanis and lost 15,000 casualties. How many troops does the right hon. Gentleman think NATO needs to have to secure a military victory?

Sir John Stanley: I say to the hon. Gentleman that our approach is fundamentally different from that taken during the Soviet occupation. There is no way that we are going to employ the sort of tactics employed by the Soviets because they successfully and unequivocally alienated the hearts and minds of the Afghan people. We have a totally different approach, and I do not believe that we need forces of anything like that number to be able to win politically in Afghanistan or to contain the Taliban.

I wish to touch on three aspects of security policy. The first is the key policy issue for the British Government: what is the right balance of forces between the deployments in Iraq and Afghanistan? There is little doubt that the present Government’s reduction in size of the British Army and the insufficiency of operational aircraft, particularly helicopters, is producing profound overstretch in Iraq and Afghanistan. The crucial issue is determining the optimal balance of British forces between the two countries. I take the view that we are probably now overcommitted numerically in Iraq in relation to what we can achieve on the ground. Equally, I take the view that we are under-committed in relation to the gains that are to be had in Afghanistan. Perhaps the Minister will say whether the Government are considering making a significant redeployment of British forces in the coming year from Iraq to Afghanistan.

The second issue I wish to touch on, which is crucial for us down in the south, in Helmand province, is that of security co-operation between Afghanistan and Pakistan. In Northern Ireland, the long, open border was a considerable security problem for us for many years. However, that border was child’s play in security terms compared with the situation that we have along the border between Afghanistan and Pakistan. Alongside the length and topography of that border, much of it mountainous, is the fact that an enormous number of people cross there: we were told that approximately 200,000 people cross over that border each day, and at one crossing point alone, 30,000 people cross per day. Sadly, those factors make the border an ideal cover area for Taliban fighters to intermingle with the civilian population and move both fighters and supplies between one country and the
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other. That makes security co-operation between the two of the utmost importance, and we know that General Richards has been devoting a lot of attention to that issue. Some progress has been made. I think that the military trilateral commission is a very important step forward, and while we were there we learned of further developments in military co-operation. Again, however, it would be helpful if the Minister could confirm that that is a central security policy of the British Government and will remain so as long as our forces are in the south.

I want to raise a third security issue: the fundamental duty of any British Government is to ensure that our forces are adequately equipped for the task that they are being asked to undertake. Patently, that has not been the case and still is not the case in Afghanistan, and certainly is not in Iraq. We all know that casualties have been incurred, and lives lost, as a result of insufficient body armour. We know of deep concerns among our servicemen and women about the adequacy of their armoured vehicles. We also know—it was borne out graphically in the film on television last night—about the serious inadequacy in the amount of helicopter support available in Afghanistan. We all heard the Prime Minister on television stating that our forces in Afghanistan could have any equipment that they wanted. That has turned out to be one of his rhetorical statements and so far there seems to have been a singular lack of delivery on that very important need.

Ann Winterton (Congleton) (Con): The Opposition feel ashamed about the lack of equipment and vehicles in Afghanistan and Iraq, which my right hon. Friend has pointed out. Will he tell us whether the Vector Pinzgauers, which were to be deployed by the end of 2006, have been deployed?

Sir John Stanley: I cannot give my hon. Friend an answer to that, but I am sure that the Minister will have heard her question and will give the answer that she is seeking.

Mr. Tobias Ellwood (Bournemouth, East) (Con): On that point, I can confirm that those vehicles have not been deployed to the region. In fact, the speed of the procurement reflects the lack of coherent thinking in replacing the unsuitable Land Rovers with the sudden purchase of the Vector Pinzgauers and the Cougar vehicles, to which my right hon. Friend has referred.

Sir John Stanley: I am grateful to my hon. Friend.

I shall turn to some key Foreign Office policy issues other than security. I shall not touch on development because this is a debate to which the Foreign Office will reply, so I want to focus on issues concerning specifically that Department. On improving governance in Afghanistan, I say at the outset that given where Afghanistan was when we invaded, following years of war with the Soviets and then the appalling Taliban tyranny, I believe that the presidential, parliamentary and provincial elections, which were relatively free from violence and
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intimidation, were a considerable achievement. They achieved an encouraging turnout from the Afghan people—men and women.

Having said that, there is no doubt that there are grounds for many concerns about the state of governance in Afghanistan. Clearly, a huge amount of additional progress is required. The Afghanistan compact, signed in London almost exactly one year ago, is still largely an aspiration. The legal system is in its infancy, to put it mildly and politely. We heard during our visit that significant numbers of those who administer justice and of those in the police force are illiterate. There is very serious and all-pervasive corruption—I do not think that is an exaggeration—in the Afghan Government. That represents a big and long-term challenge.

I believe that we have to work at that over a long period. It cannot be dealt with solely by the British Government and I am not suggesting for one moment that it should. However, I say to the House that the British Government are highly regarded, as is the strength of our governmental and parliamentary institutions. Notwithstanding the pressures on the Foreign Office budget, I hope that the Minister will reassure us that it is looking carefully at the various pots of money that it has to promote and support good governance around the world and will make Afghanistan a very high priority. Unless we make progress on governance, we will not achieve long-term stability and success in the country.

That brings me to another specific issue: poppy cultivation. I do not know by what process the British Government agreed to take the lead on counter-narcotics after the invasion of Afghanistan. I do not know whether it was an act of heroic self-sacrifice on behalf of the Government, or plain naivety. Whichever it was, it has proved to be a seriously poisoned chalice. Poppy production was up 60 per cent. last year and is proving to be a depressingly useful source of funding for the Taliban and a means by which they can pull in what appears to be an almost unlimited supply of new recruits on the promise of $10 a day.

During our visit we discussed poppy cultivation and counter-narcotics for hours with a number of experts and, of course, the counter-narcotics Minister. I was satisfied that there is no simple or quick solution. No alternative cash crop can provide an income for Afghan farmers even remotely close to what can be obtained through poppy cultivation. There can be no commitment to buying in poppies for destruction at their current value because undoubtedly that would spur on further cultivation. Neither can the problem be dealt with by buying in poppies for legitimate medical use and the manufacture of morphine because that market has been taken up already by licit production in Turkey, India and Australia. Furthermore, drastic eradication by aerial spraying is ruled out by virtue of being politically unacceptable to the Afghan Government—with some justification.

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