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5.44 pm

Mr. Elliot Morley (Scunthorpe) (Lab): I welcome the opportunity to discuss what is clearly one of the most pressing environmental issues—if not the most pressing—that we face this century. Clearly, a great deal is riding on the issue of climate change, which indeed unites both sides of the House. I welcome that.

I would say gently, however, to the hon. Member for Bexhill and Battle (Gregory Barker) that he really should not set as much store as he does by the dash for gas. There are two reasons, the first being that what he said is not true. If my memory serves me correctly, the dash for gas accounts for about 30 to 40 per cent. of carbon dioxide reductions. Secondly, what he said gives encouragement to people outside this country who do not wish to take difficult decisions and implement the necessary action. They say that the UK’s progress is simply a result of the dash for gas. That is not true. The UK’s achievement is the more remarkable because most of it took place in a period of sustained economic growth—not in a recession, as was the case under the previous Administration. The achievement is remarkable, and it demonstrates that it is possible to reduce emissions without ruining the economy. That is a very important message to get across, particularly to the United States and other countries. I urge the hon. Gentleman not to give comfort to those who argue against taking action.

I also disagree with the hon. Member for Bexhill and Battle about targets. Targets have a role and a place, and they can be used in all sorts of different ways. However, I much prefer the option suggested in the Climate Change Bill, which is carbon budgeting. I prefer that because it takes us in a much more radical direction. Carbon budgeting brings about the kind of cultural shift that we need, both in this country and internationally. Carbon budgeting can align the budget targets with financial budgets relating to the business of government, and allows the use of all the different levers that the Government have available.

To achieve the reductions that we need, we must have a cross-government approach in which every Department is involved, and tackling climate change becomes part of the culture of Government. I believe that there is a danger in arguing straightforwardly for targets, which is too unambitious. Budgeting also provides an incentive to maximise savings in any one year, because it provides some bankable carbon in case there is a poorer performance in another year. I therefore disagree with the hon. Member for Bexhill and Battle about targets.

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I agree that the Government have to lead by example, and I believe that they have done so in all sorts of areas. I welcome the tribute paid by the hon. Member for Bexhill and Battle to the Prime Minister’s role, and particularly to his influence in providing international leadership. Climate change is, of course, an international issue, and we need international solutions, which I shall touch on again in a few moments.

Mr. Peter Ainsworth: The right hon. Gentleman was waxing eloquent, and rightly so, about the benefits of carbon budgeting. Most businesses—and, indeed, Government Departments—set budgets ahead for one year, not five years. Why, then, do we have five-year budgets for carbon?

Mr. Morley: The argument for five years—although it is not for me to make it—is that it aligns itself with the process of the UN framework convention on climate change. There may be an argument for having a three-year carbon budget, which would align itself with the comprehensive spending review, for example, so there is perhaps a debate to be had on the cycle, but I certainly believe that the budgeting approach is much better than simple annual targets, particularly bearing in mind the all-important annual report and assessment provided by an independent committee, as set out in the Bill.

Chris Huhne: Does the right hon. Gentleman not recognise that if there is an annual report, there must be a benchmark against which progress can be assessed? Would it not be better to make that explicit in an annual target rather than implicit in the work of the committee?

Mr. Morley: The problem is that there is some confusion among those who advocate annual targets. Even they recognise that in any one year it is possible to face circumstances that are outside the Government’s control. There could, for example, be a dramatic shift in prices—we have seen that in recent years—whereby coal becomes much more attractive as a fuel than gas. The levers of control over that are extremely limited, in terms of what the Government can do. Some people say that it would be possible to make an allowance for that within an annual target. The difference between that and carbon budgeting has thus become very narrow.

I would rather be a bit more honest about this, and recognise that carbon budgeting gives the kind of flexibility that any Government require and that it takes us towards the concepts of carbon markets, of caps and of budgeting for carbon within all our lifestyles, right down to personal lifestyles. I know that the hon. Member for Eastleigh (Chris Huhne) does not share my views about the radicalism of personal carbon allowances; I disagree with him on that matter. We should keep an open mind on how we approach this issue, as part of the all-important cultural shift in which we begin to think about carbon in the same way as we think about the price of electricity or gas. That shift has to come.

The Government can provide a lead in that regard. The move towards smart metering is extremely good, for example. I have had a prototype smart meter fitted
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in my own home recently. By the sound of things, it is not as good as some of the meters that will be available in the next few years, but it nevertheless allows me to see exactly what my real-time electricity use is, and I have taken steps to reduce that as a result.

I also welcome the extra money for building in high sustainability and low carbon to such programmes as building schools for the future. I am keen on that, not least because Scunthorpe is in the current wave for that programme, involving a £74 million programme of new schools and refurbishments. What better opportunity could there be not only to build in standards for low carbon but to use the results as a teaching tool, so that the pupils can see real-time read-outs of renewable power use and understand the value of passive heating and ventilation? Those are the kinds of standards that can be built in, and I welcome that. I am pleased that the Government have seized the opportunity to do it.

Government procurement, too, is a powerful tool. I know that this subject has been examined, but we are only scratching the surface. We could make a lot more progress through the power of Government procurement, and also local government procurement, which is not used as it should be in this context.

I agree with some of the points that have been made about energy companies becoming providers of energy services rather than simply selling energy; that change must happen. I should like to suggest to my hon. Friend the Minister that renewable energy certificates are among the most successful vehicles for the encouragement of renewables. They have worked well, and helped to take the use of renewable energy from a very low level towards achieving our targets.

Given what Germany has done with feed-in tariffs, however, perhaps we should consider moving away from renewable energy certificates. We would have to do that over time, because people have invested in the scheme and we cannot undermine that investment, but I believe that we should be thinking about feed-in tariffs that depend on the level of technology involved. For example, if a power station is investing in carbon capture, which involves very expensive technology at the moment, feed-in tariffs for that power station should reflect that level of investment. In the domestic energy sphere, people who fit micro-power to their own homes should certainly get a better feed-in tariff than they do at the moment, although I welcome the Chancellor’s proposal to make that income tax-free. He has sent out an important signal by doing that.

I want to turn to the international issues that relate to climate change, because they will be the key factor. There is a lot that we can do, and we should lead by example. We should demonstrate that an advanced industrial country can reduce its emissions without affecting its gross domestic product. However, we shall have to persuade other countries to do more. We need to look for an agreement post-2012, at the end of the present Kyoto protocol, and we have an awfully long way to go in getting the necessary buy-in from a number of countries.

I listened carefully to what the hon. Member for Eastleigh said about the range of 450 to 550 parts per million. We should be aiming for the bottom end of that range, because I worry about the impact that being at the top of the range would have on the global climate. Hon. Members will be aware, however, that a
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number of countries think that 550 parts per million is an unrealistic target. We still have a long way to go to convince countries that 550 would be straying into the area of dangerous climate change.

One way of getting greater international support would be for the developed nations to place more emphasis on including aid packages to developing countries as part of a climate change agreement relating to adaptation. I would like to suggest to the Minister that we need new funding for that. We need to ally these issues to our aid programmes. I know that the Department for International Development has been giving a lot of thought to the matter, but we need new money on the table to get those agreements, particularly from the emerging economies. One way of doing that would be to ensure that money was available in the framework for clean energy and development, which came out of the Gleneagles action plan. That potentially powerful vehicle is being set up by the World Bank, and it needs our encouragement and support.

It is important that carbon markets develop, because although proposals for smart taxation that encourages the use of new technologies, for lower emission vehicles and for offsetting the emissions from planes are all perfectly legitimate arguments, I worry that there is a potential for the prices involved to be rather elastic. For example, the fuel surcharges on air tickets range from about £30 to £60, before we add the increased departure tax. Those taxes have not had a great effect. Neither of the Opposition Front-Bench spokesmen has told the House what figure they would propose that would actually deter people from flying. I have never seen such a figure. I would like my hon. Friend the Minister to consider that, if there were a cap on emissions, the aviation sector would not be able to exceed that cap. That would be a much more effective way of ensuring that aircraft emissions did not rise, and that new technologies and the efficient use of existing aircraft were encouraged.

Carbon markets are not yet mature—they are still developing—but there is an argument for taking a levy on each tonne of carbon traded. This has been discussed in Germany, and the figure of 10 cents has been suggested. That money could go into a fund that could boost adaptation funds. There would also be a strong element of social justice involved, because the money would come from the people producing the carbon and go to those who, because of their poverty, were not. Given the rate of growth of the markets, there is the potential for a huge fund that could be directed towards adaptation and new technologies. The proposal is not without its problems, but it is something to think about in terms of raising large sums of money that could make a real difference. It could encourage adaptation and the decarbonisation of our societies.

I have a final point to put to the Minister, and it is one that I can make more easily than he can. If there were a lack of progress towards international carbon markets or, heaven forbid, towards a framework, post-2012, by some countries—some have legitimate claims because they are emerging economies; others should know better—would he give some thought to a concept that I regard as very much a second choice? If
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countries such as ours, or markets such as the European Union, are imposing the justifiable burdens and costs of carbon markets that encourage the use of new technology and innovation, could a carbon levy be imposed on imports from countries that are not part of any international agreement and are not taking action to control carbon? That levy could then be recycled back to the developing countries to support technology transfer and new technologies.

I understand the controversy involved in moving into such an area. I know all about the kind of opposition that such a proposal would get from the World Trade Organisation, and I must make it clear that that is not something that I want to see. I want to see an effective outcome, post-2012, involving a proper and effective framework agreement that has been signed up to by the United Nations forum on climate change. If there is no progress, however, there should be no free riders. It saddens me to say so, but, in those circumstances, a carbon levy is something that we should consider.

Several hon. Members rose

Madam Deputy Speaker: May I make a plea for brief contributions? There is a limited amount of time available for the rest of the debate.

5.59 pm

Mark Hunter (Cheadle) (LD): The original title of this debate was “Action on climate change begins at home”. The latter part of that title is the most important in relation to what we have discussed today, not least because of the pressing need to persuade the public and individuals that they can make a difference by changing their own habits and lifestyles at home.

All of us, as politicians, should do more to help instil in the minds of the population the belief that their actions can and do affect levels of air, water and light pollution. We need to believe that ultimately, only the collective efforts of individuals at home, in their jobs, and perhaps even in their capacities as leaders of the community in business and in Government, will be able to tackle the problem of climate change and the devastating effects that we can already see it bringing.

There are many fine examples of individuals taking the lead. I recently visited a gentleman in Cheadle Hulme, in my constituency, who had installed solar panels on his house to do his bit to help stop climate change, at considerable expense to himself. That was a fantastic initiative, which should be held up as an example to others. I was, however, appalled by what he told me about the lack of Government support for such schemes. The Government need to give individuals incentives to take “green” action.

The fiasco of the low carbon building scheme, reported in recent months, only serves to prove that the Government are failing to keep up with the public demand for greener solutions to energy problems. In March the monthly capped grant for the scheme was allocated to householders in only 75 minutes, which clearly showed the Government’s dismal failure to fund the scheme properly. With solar panels costing up to a possible £7,000, many households will simply not be able to afford to take the drastic action necessary to tackle global warming. Despite the promise from the
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Environment Secretary that householders would have better access to renewable energy funds, the low carbon building scheme effectively shut up shop from March until later this month. No wonder so many people are asking how on earth this is helping to tackle climate change.

Buildings in the United Kingdom are responsible for nearly half our total carbon emissions, yet the Government still fail to create incentives for people to improve the carbon footprints of their own homes. Not only do we need tough new standards to be set for new build; we need to provide incentives for home owners to improve older properties by installing insulation and other energy-saving devices. The Liberal Democrats’ energy mortgage policy would deal with the problem of cost by lending home owners money for the initial outlay, which could then be paid back in money saved from lower energy bills.

Doorstep recycling is yet another example of the way in which changing patterns of public behaviour can be seen to have a real effect on climate change and the environment. My own council, Stockport—where, incidentally, the Liberal Democrats increased their majority last Thursday at the expense of the Conservatives—has a better recycling record than any other metropolitan borough council in the country, with 33 per cent. of all household waste now being recycled, but even there we know that we can and must improve. When the council rolled out its pioneering “green waste” wheelie bin programme it was flooded with requests from residents asking for the bins, and struggled to keep up with the public demand. With its excellent environmental record, Stockport puts many other local authorities to shame.

Recycling is a low-cost option for the public, and a simple way in which individuals can make a difference to climate change. Local government has a vital leadership role to play in environmental issues and should be doing its utmost to encourage recycling and other environmentally conscious behaviour, but, it can do that only with the active support and encouragement of central Government. The Government may have made a start, but they need to do much, much more if they are to deliver on their promises.

6.4 pm

Mrs. Sharon Hodgson (Gateshead, East and Washington, West) (Lab): I think Labour Members can all agree that we are grateful to the Liberal Democrats for choosing to highlight the Government’s ongoing work in combating climate change.

I do not believe anyone would take issue with the idea that the fight against climate change, like charity, must begin at home. Much has been made of the small changes that we can all make to our lifestyles, which when added together should make an enormous difference. However, we must remember that “home” is not just something that belongs to the individual or the private person. New homes that are not yet occupied are an important consideration. Companies have their own homes, perhaps even several homes across the country, and we as Members of Parliament have our own home here in the House of Commons. I want to spend a few minutes examining what is being done, and in some cases what needs to be done, in all those different homes across the country.

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I expect that all hon. Members have heard a fair few “light bulb” jokes in their time, but I doubt that anyone has heard the one that asks, “How many MPs does it take to change a light bulb?” The answer, on this occasion, is 77—the number of Members who signed my early-day motion 947, which called for a ban on the sale of incandescent light bulbs.

Some of my constituents suggested to me that I was doing my patch a disservice, as the first light bulb was invented in Gateshead, in my constituency, by Joseph Swan, who was born in Sunderland, another part of my constituency. For me, however, that proves that both Gateshead and Sunderland have been at the forefront of the energy agenda in the past, and I have every faith that they will continue to be so in the future.

I would not presume to claim that what happened next was an immediate response to my early-day motion, but needless to say I was delighted when the Chancellor announced that the sale of old-fashioned energy-hungry light bulbs would be phased out by 2011. That represents a clear commitment from the Government to lead people in the right direction, and to enable all of us to make the small changes that will deliver a big difference.

I know from spending time in my constituency that although the message is getting through, there remain significant obstacles for the Government to tackle. It is all very well preaching from our parliamentary pulpits, but we must remember that for families who are surviving on low incomes, pursuing a green lifestyle carries a sometimes unsustainable cost. The Government have announced that from next year, every household will be able to monitor the amount of energy being used at any given time. That is exactly the sort of simple innovation that should be supported: such aid will help people to stop wasting not only energy but money, and will therefore be especially useful in low-income areas.

The Warm Front scheme forms a vital part of the Government’s energy efficiency commitment, and will have provided consumers with 40 million bulbs by 2008. I know that the Government are also working hard at European Union level to try to find a way of reducing VAT on energy-efficient goods such as low-energy light bulbs. I hope that, with the support of Members in all parts of the House, we shall be able to find a solution that will make energy efficiency affordable for all.

We do not want to see the development of carbon inequalities, especially if they closely reflect income inequalities. If we cut carbon costs, we must ensure that everyone can meet their own efficiency targets. The Liberal Democrats do not seem to have solutions to that problem. Prescribing top-down standards, targets and subsidies such as energy mortgages will only lead to additional costs being passed on indiscriminately to consumers, and that will again hit the poorest hardest.

It is clear that the Government are committed to leading the field across the world in combating climate change. In fact, many other countries are already having to play catch-up, and I suppose it is no surprise that Opposition parties find themselves having to do the same.

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