Examination of Witnesses (Questions 560
- 579)
WEDNESDAY 23 MAY 2007
RT HON
DAVID MILIBAND
MP AND MR
ROBIN MORTIMER
Q560 Chairman: In coming to a figure
of 750,000 or 500,000, half a million, in the next year, you must
have been informed by something. Perhaps Mr Mortimer might enlighten
us.
David Miliband: I am glad you
have understood that the difficult questions get passed to my
left.
Q561 Chairman: Absolutely I know
you were terrorised by the thought of page 49! Mr Mortimer, what
was the thought in your mind when £500,000 in year two was
selected as the number for research. What kind of research are
they going to do?
Mr Mortimer: It is always an element
of judgment. I think we said earlier that they are indicative
numbers. We are doing a piece of work in the Office on Climate
Change at the moment on precisely what the analytical work plan
will look like, but essentially we are assuming that the Committee
will need a mixture of drawing on government data, commissioning
its own research, potentially adding to models which are already
out there and doing some qualitative research, if you like, on
models which exist and being able to interpret and add value to
those. It is a combination. We put that sum in based upon the
experience of running those sorts of contracts.
Q562 Chairman: I presume, Secretary
of State, in your budget you have got a low figure and a high
figure and you are waiting for the Committee to come along and
negotiate year one's budget with you, are you?
David Miliband: Certainly not.
As you know from Defra's expert financial management, we run an
extremely tight ship and we are certainly not expecting you to
come along and bid up these figures.
Q563 Chairman: Sensible provisioning
between expectations of a low and high figure is good budgetary
practice?
David Miliband: We do not do gaming
in Defra; what you see is what you get.
Q564 Chairman: You do not do gaming.
There is a very interesting thing in this document about game
theory, so it forms part of your—
David Miliband: Gaming is different
from game theory.
Q565 Chairman: There is a lovely
bit here. I am going to ask you lots of questions about game theory,
if I can find it, to understand what this was all about in terms
of targets. Here we are. Page 14, paragraph 4.17. It says here:
"Game theory can provide useful lessons and insights. For
example, the prisoners dilemma game illustrates that countries
have the incentive to free ride on the abatement of others",
et cetera. So already game theory is part of your order
of play; it says so down here, but do not worry yourself about
that?
David Miliband: And ergo?
Q566 Chairman: I just found it intriguing
that you have just denied that game theory was part of it and
here it is—
David Miliband: I said I was not
gaming about the budgets.
Chairman: I see.
Q567 Mr Cox: I do not want to interrupt,
but if I could ask the Secretary of State a question. I realise
it is probably late in the evening. I wanted to clarify, if I
may, Secretary of State, this question of what the Committee can
do. You say, and rightly obviously, on the Bill that it must concentrate
on outcomes, and I appreciate that, but does that mean it is not
going to be able to say anything about the levers of policy adopted
by the Government? Is that your view?
David Miliband: No, of course
not.
Q568 Mr Cox: I am just trying to
find the boundaries of this Committee?
David Miliband: I did answer the
Committee, clearly. I said I was not in the business of precluding
what they can do, the whole prescribing or the proscribing of
what they can do, because that would not be to treat them as adults.
Equally, they will want to stick to their remit because that is
clear, and I indicated to the Chairman that I think there is a
division, or a space, between examining which sectors of the economy
are under performing on the national emissions reduction, there
is a division between that and then saying in the home heating
sector you have got to change the regulations on boilers. We have
focused them on interrogating the data to produce the right carbon
budgets and then on monitoring. That seems to me to be the right
thing to do. Can I therefore say exactly what territory the Chairman
or his members or our members or the Committee as a whole are
going to venture into and what they are not going to? No, I cannot,
and I think it would be to treat them as adults to start writing
that down now, but they do have specific duties and I want them
to stick to their duties.
Q569 Lynne Jones: One of the reports
that the Committee might want to do is a report about their own
resources. Would such a report be published openly if that was
a report to government?
David Miliband: I have not got
the foggiest idea. "Report about their resources." What
do you mean?
Q570 Lynne Jones: We were talking
about how we identify what they need to carry out their work,
and one of the things they might decide after they have been working
is that the budget is inadequate and they might want to make a
submission as to why it should be increased. Would such advice,
in a way to government, be published?
David Miliband: First of all,
I do not think they would set out to do a report with the same
status as their annual report on emissions reduction asking for
an extra three academics to help them on a particular issue. What
they might report at the end of the year, and they would report,
I am sure, was how big their staff was and how much they were
spending. They might note that they had either increased or decreased
the amount that they were spending. In extremis they might
say, "We have become so infuriated with the Government's
penny pinching that we are issuing a public report saying we want
three more people to come and help us with X, Y and Z", but
I do not think that is the way government works really.
Q571 Chairman: Let us move towards
our conclusion. The Bill has in part three a range of enabling
powers currently focused on your ability, Secretary of State,
to introduce various forms of emissions trading schemes within
the United Kingdom for those sectors of the economy that are outwith
current arrangements. Some people have suggested to us by way
of evidence that they were surprised that perhaps other policy
instruments had not been included in the armoury of ways of reducing
emissions that effectively the Bill focuses on trading schemes.
What was the thinking behind that?
David Miliband: I think the thinking
was that fundamentally for 150 years we have emitted pollution
without recognising its carbon price, and we are now in a position
where, just shading, the majority of the economy's greenhouse
gases are covered by the EU scheme. It is not appropriate to think
that the whole of the economy would be covered by the EU scheme
because it is targeted at large emitters. Today, as it happens,
we have announced the creation of effectively a trading scheme
for medium emitters in the public and private sector, and so therefore
we are moving forward the amount of emissions that are covered
and it is a primary way of reducing emissions, because cap and
trade scheme, I think, have got increasing relevance across the
economy.
Q572 Chairman: The question I asked
was: did you consider taking legal powers to reduce emissions
by other mechanisms than trading?
David Miliband: What sort of thing
would you be thinking of?
Q573 Chairman: I do not know. It
is for you to tell me and answer the question.
David Miliband: Since this is
a prelegislative hearing, I thought it would be appropriate to
be able ask a question as well as answer them.
Q574 Chairman: You can, but I must
admit I would be struggling.
David Miliband: You can take a
Henry the Eighth power to do whatever you liked, but beyond taking
a power to do whatever I liked, I do not think that would be right.
If you are thinking about regulation—for example, we have
got established mechanisms for regulating, we have also got a
regulatory reform order which allows to us cut through some of
the difficulties in that area, in other areas you have got an
annual budgetary cycle—I do not think it would be right
to take in this Bill fiscal powers, so I think trading schemes
is the missing gap.
Q575 Chairman: For example, in another
piece of work we are doing we have been looking at the question
of feed-in tariffs. You might have the thought, "I want to
have something to say that by regulation. I could introduce something
if the electricity companies in my judgment were not paying sufficient
for feed-in from renewable electricity at the domestic level."
You might, for example, take some fairly Draconian powers to say,
"I will now set a tariff, I will now interfere", something
like that, for example?
David Miliband: I am not going
to try and pin you to it, but would it not be rather difficult
to start setting policy for feed-in tariffs separate from the
whole regulatory regime for the electricity industry?
Q576 Chairman: All I am saying is
that if you found that certain sectors of the economy were not
responding to the existing array of policies and you said, "If
we did that, we might get a better response", there is not
anything in this Bill that allows you currently to come along
afterwards.
David Miliband: Trading schemes
are different from every other policy measure in one way, are
they not? They start from the reduction in emissions that you
are determined to see and they then create space for different
players in that sector to live within those means or not, and
if they do not live within those means they have to pay for it.
So they are a unique instrument in that sense: because they start
by capping emissions. Every other instrument, if you like, starts
with a policy instrument rather than starting with the end point.
Since this is a bill about outcomes and since cap and trade schemes
are about caps, it seems to me that trading schemes are a rather
different genus.
Q577 Chairman: You might, for example,
with the public sector, local authorities, want to impose limitations
or obligations on them through a bill like this?
David Miliband: You might want
to. You could impose obligations to cap emissions through a trading
scheme.
Q578 Chairman: But you could cap
them anyway without having a trading scheme?
David Miliband: No. How?
Q579 Chairman: For example, you might
say: local authorities shall emit no more emissions in 2030 than
they did in whatever?
David Miliband: That is a cap
and trade scheme.
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