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12 Mar 2007 : Column 21

Mrs. Theresa May (Maidenhead) (Con): May I assure the Leader of the House that the Conservatives are also sorry not to see the hon. Member for Edinburgh, South (Nigel Griffiths) in his place alongside him any longer? On the reform of the upper House, the right hon. Gentleman listened to the views of this House about his proposed preferential ballot system. He also listened to the views of the House when it rejected his White Paper and voted for a more democratic upper House. As he looks towards legislation, will he now listen to the views expressed by hon. Members across the House about the list system of proportional representation that he is proposing for the elections to the upper House?

Mr. Straw: My proposal was for 50 per cent. elected, but it was made clear that that was not the Government’s proposition. The right hon. Lady was consulted extensively on our White Paper, and she knows that it contains a great deal that has all-party agreement. I said last week that we will listen to proposals for altering the electoral system, and it is important that the House move on that by consensus as far as possible. Before she tries to makes a party point about the semi-open list, let me say that that proposal originated from the Wakeham royal commission on which several of her distinguished colleagues and former Conservative Cabinet Ministers sat, along with Liberal and Labour Members.

Mr. David Heath (Somerton and Frome) (LD): I also extend my best wishes to the hon. Member for Edinburgh, South (Nigel Griffiths). I hope that nothing that any of us said on Thursday precipitated his decision.

In the euphoria that followed the surge of radicalism last Wednesday, the Leader of the House said two things: first; that he would reconvene the all-party group; and secondly, that he could not pre-empt the Queen’s Speech by announcing legislation. Irrespective of what another place says, will he ensure that the cross-party group is convened, and that it is convened before Easter? Will he also make it clear that legislation will follow in the next Session of Parliament?

Mr. Straw: On the hon. Gentleman’s first point: would that the decision of my hon. Friend the Member for Edinburgh, South were related to something that was said in the House last Tuesday and Wednesday! On his second point, I cannot anticipate the Queen’s Speech. As for a meeting of the cross-party group, we will get it together as quickly as possible, although I cannot say for sure that it will meet before Easter; if we can have a meeting, we will. My noble and learned
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Friend the Lord Chancellor mentioned this afternoon, as I did last Wednesday, the possibility of producing a draft Bill, but that must be discussed by the cross-party group.

Programming of Legislation

19. Sir Nicholas Winterton (Macclesfield) (Con): If he will undertake a review of the programming of legislation. [126352]

The Leader of the House of Commons (Mr. Jack Straw): Both the Modernisation and Procedure Committees considered that subject towards the end of the previous Parliament. Following their reports, the House approved changes to the relevant Orders—including making them into permanent Standing Orders—in October 2004. The Modernisation Committee also touched on the subject in its report last year on the legislative process. The Government have no current plans to conduct a further review of the operation of programming or to ask the Modernisation Committee to conduct such a review.

Sir Nicholas Winterton: Does the Leader of the House accept that the programming procedure is thoroughly unsatisfactory to both sides of the House? It does not allow Back Benchers on either side of the House to participate properly in many important debates. Will he consider that matter again? Can I make a plea to the usual channels—of which I have never been part—to give more authority back to the Back Benches? In that regard, will the Leader of the House please consider setting up a business committee duly representative of the Back Benches?

Mr. Straw: There is a wider issue about Back Benchers’ involvement in the business of the House. As a senior member of the Modernisation Committee, the hon. Gentleman knows that it is currently considering the use of non-legislative time and ways in which the role of the Back Bencher can be strengthened. The programming arrangements are not wholly unsatisfactory; they are a great deal better than those to which he and I were used when we first came into the House, when there was no programming and a ritual of Opposition Members talking Committees into the night, then going for guillotining and not considering Bills in any detail. We were always ready to consider proposals for improving arrangements, and we did so in the summer of 2004. I am not certain that his specific proposal, made when he was Chairman of the Procedure Committee, of a 48-hour gap between Second Reading and agreement on the Sub-Programming Committee, would produce any benefits. That is the issue—nothing else—between us.

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European Council

3.34 pm

The Prime Minister (Mr. Tony Blair): With permission, Mr. Speaker, I shall make a statement about the European Council summit that took place in Brussels on 8 and 9 March.

There were three main agenda items for the summit. First, the Council agreed to cut the administrative burden arising from EU legislation by 25 per cent. by 2012. This has long been a key British objective. It was a major part of the United Kingdom presidency of the EU in 2005, and it mirrors our own Government’s decision made last year. This decision makes another clear break with traditional European policy on regulation, and is hugely to be welcomed. It follows up a recent Commission decision to withdraw some 78 pieces of legislation—the first time that the EU has done that. I congratulate the Commission, and especially President Barroso and Commissioner Verheugen, on their determination. The decision has full British support.

Secondly, the Council agreed on an action plan to liberalise the energy market. The centrepiece is to free up the distribution of energy across the European Union to create a genuinely competitive, interconnected and Europe-wide internal energy market. That will bring major benefits for EU consumers, improve the security of supply, and strengthen European competitiveness. The European Council decided in particular that supply and production activities should be separated from network distribution to allow competition on the networks, as already happens in the UK.

Ever since the Hampton Court summit of October 2005, energy liberalisation and security of supply have been key objectives of ours for the European market. It is true that we still need to do more in Europe, especially in respect of the vertical integration of energy companies. Nevertheless, this means that for the first time, at least at distribution level, British companies can compete on equal terms with French or German companies—in particular, in France and Germany, not just here in the UK. That will bring reduced costs to business and to customers, and again it has our full support.

Thirdly, and most importantly, the European Council committed itself for the first time to a binding Europe-wide environment target: a 20 per cent. reduction in greenhouse gas emissions by 2020, compared with 1990. Moreover, the European Union undertook to go further and achieve a 30 per cent. reduction in emissions by 2020, if this was part of a wider international agreement. Until last week, no group of countries had committed itself to such deep reductions. This is a landmark decision, which will mean changes in all member states' domestic policies.

The Council also agreed on a binding commitment that renewable energy will comprise some 20 per cent. of overall EU energy consumption by 2020. However, the agreement allows for differentiated national targets within that overall EU objective. In particular, it recognises that for some member states, nuclear energy will play a significant role in achieving overall climate change targets.

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The Council agreed a 20 per cent. increase in energy efficiency, again by 2020. It also recognised the importance of clean coal technology. We welcomed the Commission's undertaking to support, by 2015, the construction and operation of up to a dozen commercial-scale clean coal demonstration plants, with a view to all new coal-fired power stations’ being fitted with carbon capture and storage technology by 2020. That technology must be a crucial element in the overall response to the climate change challenge, and it is important that we signal that to investors now. Clean coal can be part of the future.

All these targets impel us towards a far more ambitious European emissions trading scheme. The Commission President is currently negotiating country-by-country caps on emissions for 2008 to 2012. Britain, as he has acknowledged, has helped by setting an ambitious cap for itself. The Commission has proposed that after 2011, aviation should also be within the ETS. We want to make the scheme more transparent, and we want it extended after 2012 to 2020 and beyond. All these proposals are set out in our recent paper to our European colleagues, and we are actively building the alliances in Europe to ensure that they are implemented.

Of course, these European commitments must be part of wider international action. As the Stern review demonstrated, without concerted international action there will be disastrous consequences for global economic development. The European Council therefore reaffirmed the importance of agreeing a long-term framework to address climate change. It set out a coherent and united vision for how such a wider international agreement would work. It paves the way for further action on climate change at the G8 summit in Germany in June.

This is, in the end, the crucial prize. It is important that we take action here in Britain, as tomorrow's climate change Bill will show. It is critical for the EU then to show leadership, as it did at the summit in a remarkable and groundbreaking way. For those who doubt the relevance of the European Union to today's world, last week's Council meeting and its historic agreement on climate change is the best riposte. It shows Europe following the concerns of its people, and giving real leadership to the rest of the world.

Ultimately, only an agreement that is global and includes America, China and India will halt the damage of rising greenhouse gas emissions. Everything else is, of course, justified in its own right, but this is, most of all, a means to that end. The G8 plus 5 dialogue which was started at Gleneagles under the UK presidency in 2005, and which has all the main countries within it, is the forum in which new principles for an international framework can be agreed. The summit in Germany this June will be the time to agree those principles, including a stabilisation goal, a route to a truly global carbon market, support for new technology, adaptation measures and action on deforestation. This is the next stage of the journey to effective multilateral global action on what is the single biggest long-term threat to our world.

Let me conclude by paying tribute to the leadership of Chancellor Merkel at the European summit. The agenda was bold and she carried it superbly. Unsurprisingly, as the matters it addressed were all
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fundamental British objectives, we were able to give that leadership full and active support. Once again, that shows the significance of strong, constructive and positive engagement in Europe.

Mr. David Cameron (Witney) (Con): May I thank the Prime Minister for his statement, and may I also do something that he is perhaps not always used to from the Leader of the Opposition after European statements, and congratulate him on helping to negotiate a successful outcome to the European Council?

We very much welcome the agreements on deregulation and liberalisation of the energy market. We have long shared those goals. The Prime Minister said that they had been goals of the British Government since 2005; I can well remember their being goals of the British Government in the 1980s. We welcome in particular the agreement to cut EU greenhouse gases by 20 per cent. by 2020. In our view, that is an essential step towards ensuring that there is the necessary international and domestic action to combat climate change.

The Prime Minister and I have many disagreements on European policy—no doubt we will continue to do so—but some issues go right across parties and across countries, as these negotiations show. Indeed, I have found out something over the last year, whether in talking to Nicolas Sarkozy, or the Swedish Prime Minister, or the Nordic Foreign Ministers, or the Greeks—[Hon. Members: “Or the Czechs?”] Yes—or indeed the Czech Prime Minister. They all agree. There is a growing consensus on the need to take action on climate change. Indeed, the agreement negotiated in Brussels at the weekend was unanimously agreed by leaders in Europe belonging to all parties and all countries right across the political spectrum, from Spanish socialists to Dutch Christian democrats and from the Italian centre-left to Polish conservatives. It is a consensus that I know that the Prime Minister welcomes as much as I do.

I have some detailed questions on how we make the 20 per cent. target, which we support, a reality. Clearly, we need to make the EU emissions trading scheme work better. In particular, does the Prime Minister agree with me that further steps need to be taken to stop European Governments issuing too many carbon permits? Will he confirm that those steps can be taken and that that does not require some deep institutional reform of the EU? Will he agree to a progressive tightening of the cap on such permits?

We also need to ensure a long-term price for carbon throughout the European economy. In order to make that happen, will the Prime Minister push for the completion of the third phase of the emissions trading system—the phase from 2012 to 2020? The Prime Minister talked about 2008 to 2012, but I would be grateful if he would explain when he thinks the next stage will be completed. Is it not the case that emissions trading needs to be aligned with the new 20 per cent. carbon reduction target?

Turning to the steps that we need to take domestically in the UK to meet the 20 per cent. target, does the Prime Minister agree that we need a critical path in order to hit that target? I know that he has set his face against these, but will he look again at whether
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there is a need for annual targets? Does not the recent experience of long-term targets show that such an approach is necessary? The Government have committed themselves to a 20 per cent. cut in emissions by 2010 three times in their manifestos, and we now know that that will not happen. Does not that show that annual targets are necessary? Clearly, all targets need to be backed by independent auditing. What measures will be taken to ensure that targets are independently set and independently audited so that we do not fail to meet them?

The summit also rightly concluded that we need a separate target for renewable energy as a share of energy consumption. When will we see the country-by-country allocations— [Interruption.]

Mr. Speaker: Order. Please allow the Leader of the Opposition to speak. We gave our courtesy to the Prime Minister; the right hon. Gentleman should be able to respond.

Mr. Cameron: The shadow Leader of the House has lost his deputy, and he is taking it out on the rest of us. [Interruption.] I am sorry—I meant the Leader of the House. I am getting ahead of myself: he is soon to be the shadow Leader of the House.

The 20 per cent. target for energy efficiency is also welcome. Performance in the UK on this issue has been disappointing, and it will take a step change to meet the target. The agreements that were reached at the weekend on renewables and energy efficiency have effectively changed Government policy. The Prime Minister said as much in his statement. When does he expect the Minister for Energy to set out the steps that we need to take to meet those targets? In particular, is he planning to change the national grid system to help to decentralise the domestic energy market? What is his plan to ensure that the renewable obligation favours the development of all renewable energy and not just onshore wind power? Above all, does not this European summit show clearly that when the EU focuses on real issues such as climate change and global poverty, rather than on centralisation, institution building and agreeing a new constitution, it can take real steps forward that are agreed by everybody?

The Prime Minister: I agree that it is important that Europe focuses on those key questions. May I deal first with domestic policy issues? I am against binding annual targets because they are too inflexible. Changes in temperature and in the cost and price of fuel can make a dramatic difference to the economy’s ability to cope with such a binding annual target. We have to strike a balance the whole way through between what we do to give leadership here, and not putting our industry in a position where it becomes uncompetitive or our consumers in a position where they get clobbered.

I am dubious about the right hon. Gentleman’s proposals to put VAT on air travel, or a new tax on airline fuel, because they might hit consumers and businesses in this country very hard, while having a small impact on CO2 emissions worldwide. It is important to get right the balance between what we do here and what we do by international agreement, because on it will depend whether we give the right
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leadership on this issue, as this country has in the past few years, but also whether at the same time we make our businesses uncompetitive and harm our consumers, which would be unfair to them.

We will set out steps for introducing more measures on energy efficiency, as we have already done in respect of new buildings. For example, it would plainly be sensible to build into the building schools for the future programme, through which we will rebuild or refurbish many schools in the country, measures for the use of environmentally sustainable energy and for energy efficiency. That is very important and is right. Of course, we will also be improving and increasing the amount of money that we devote to research on renewables and to our use of renewable energy.

I basically agree with the right hon. Gentleman’s points about the European emissions trading system, as that is precisely what we are trying to achieve in Europe. We are trying to get a progressive tightening of the cap, and to ensure that there are policies in place for post-2012 and that we extend the scheme. Bringing in aviation will play a major part in that.

By way of conclusion, I say to the right hon. Gentleman that we will need alliances to build all this. It was interesting, when we got to the discussion about what would be in the Berlin declaration, that there was a general agreement that we should put in a measure on climate change and protecting the environment. I must say that the only Prime Minister who spoke against it was— [Interruption.] It was indeed the Czech Prime Minister. To be fair, however, I must add that he made a very strong statement in favour of nuclear power, so I warmed to him on that.

The basic point, surely, is that if we want to get this done in Europe—I totally understand what the right hon. Gentleman says about what Europe focuses on; I make the same points myself a lot of the time—we have to recognise that this European relationship is the only way in which we can take critical action and make a critical difference to climate change. If we put at risk the European relationship in any shape or form, we diminish our capability to take that effective action on issues such as climate change. I really believe that this summit, particularly under the leadership of the German Chancellor, has indicated that over the years the agenda that we have been pressing for from this country—some of it, I agree, under previous Governments—has the chance now of really leading the agenda in Europe. We simply do not want to do anything that puts that at risk.

Sir Menzies Campbell (North-East Fife) (LD): I, too, begin by congratulating Chancellor Merkel on achieving an agreement on the environment, which many people predicted would be difficult, if not impossible.

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