Examination of Witnesses (Questions 600
- 618)
WEDNESDAY 23 MAY 2007
RT HON
DAVID MILIBAND
MP AND MR
ROBIN MORTIMER
Q600 Chairman: When it says "the
allowances", I am presuming these are allowances under the
trading scheme to emit?
David Miliband: I am sorry, if
I can clarify, all this is saying is that we could not use these
powers to do auctioning with a charge being made. These powers
could only be used if there were not auctioning with charges being
made. If we wanted to do auctioning, we would use the Finance
Bill.
Q601 Mr Gray: It is entirely misleading;
it is not free of charge. What you are saying is that under this
Bill we could not do it, but we are confident that our honourable
friend the Chancellor of the Exchequer will do so.
David Miliband: Before you accuse
a civil servant of misleading you, which I think is—
Mr Gray: I was not accusing a civil servant
at all, I was accusing the Bill.
Chairman: Can we seek clarification,
because there is a policy direction mapped out here with a very
interesting idea that you can introduce into certain sectors of
the economy not currently covered by EU trading, national trading
schemes, and the suggestion here in these words is that the allowances
within such a scheme would, in the first instance, be allocated
"free of charge"?
Patrick Hall: The CBI and others have
picked up on that in evidence to us and welcomed it, because it
says "free".
Q602 Chairman: Yet in the Carbon
Reduction Commitment the proposal is to effectively auction those
off, and you have said that the government has an enthusiasm for
auctioning which does not seem to be replicated in the words used
for whatever schemes you propose to bring in under this section
of the Bill.
David Miliband: This is a helpful
session in that context and in other contexts as well, because
the argument we have put for these enabling powers is that it
would allow us to get on with setting up trading schemes in an
effective way. It is not a mechanism to get round the established
precedent that fiscal issues are dealt with through a finance
bill. That is clear.
Patrick Hall: The message out there with
industry really does need to be investigated as soon as possible?
Q603 Chairman: I think we will accept
your helpful comment that it is useful. We have teased out something
that needs to be perhaps further refined.
David Miliband: We are legislating
now for auctioning in the Finance Bill.
Chairman: Yes, but I think in terms of
the wider policy issue, it is something which in due course need
to be refined.
Q604 Lynne Jones: Is there any point
in having these powers given the evidence that in the past schemes
have been set up where the allocations have been given freely
and there has been inappropriate profiteering and double-counting?
David Miliband: Yes, it is helpful
to have these powers because it would be odd to set up a whole
trading scheme through the Finance Bill. What you can do is the
auctioning provisions through a finance bill and you could use
this Bill for establishing the scheme. The auctioning is one part
of the scheme.
Q605 Lynne Jones: Do we need this
comment then that the allowances should allocated free of charge?
David Miliband: It makes clear
that this not a bill for getting into fiscal issues. That is done
through the Finance Bill.
Mr Mortimer: It is merely to clarify
that there is an exclusion in relation to auctioning in these
powers.
Mr Cox: This enables you to introduce
it under this, but you could do it via a finance bill?
Chairman: Normally, if you are going
to have expenditure, monies, you have a money resolution, or if
you are trying to deal with something financial, it is the Finance
Bill, but the Finance Bill tends to deal with things like taxation.
I think it is an area that needs some clarification.
Q606 Lynne Jones: The CBI and the
engineers last week said that there were some other policy instruments
which were more useful in reducing carbon emissions, and they
mentioned things like building regulations and planning regulations,
which, of course, are not the direct responsibility of you as
Secretary of State, which brings me back to the point about how
other ministers can be engaged in this process. One area is the
role of the Climate Change Committee, but in that regard, in terms
of the role of other secretaries of state, I notice in the Energy
White Paper today it states, "and energy demand will grow
over time, despite increased energy efficiency, as the economy
expands". Are you comfortable with that given the kind of
targets that we need to meet if we are going to prevent dangerous
global climate change?
David Miliband: It is a statement
of fact. What is most important is how we satisfy that demand.
That is the key.
Q607 Lynne Jones: In here, for example,
it says that all new social housing will be built to Level Three
in the Code for Sustainable Housing. You could have a policy which
says it should be at Level Six?
David Miliband: Hang on, we have
said that all new housing, social and private, will be zero carbon
by 2016.
Q608 Lynne Jones: What about in between
now and 2016?
David Miliband: We will ratchet
up the building regs year by year, point by point, so that by
2016 it is all zero carbon and they are exporting as much from
the grid as they are importing.
Q609 Lynne Jones: In view of the
amount of reductions, going right back to the beginning, is this
slow progress sufficient when we have dangerous climate change
upon us?
David Miliband: Let us have a
separate session on zero carbon housing, if necessary with the
housing minister here as well, but given that we are the first
country in the world to be moving to institutionalise, to require
all new homes to be zero carbon, that the building regs are ratcheted
up year by year, that the current level of energy efficiency is
currently 40% higher than that of four years ago should not be
dismissed.
Q610 Lynne Jones: Compared with other
countries we are way behind.
David Miliband: We are way behind
on?
Q611 Lynne Jones: Setting the same
kind of targets as they do in Europe?
David Miliband: Let us define
our terms. We are behind on the existing stock. We are not behind
for the requirements on new housing. Show me another country that
is going to have a requirement that all new homes are zero carbon?
I do not recognise any other countries somehow.
Q612 Lynne Jones: Some would say
whether that is a meaningful target is one thing; is it what we
are achieving now and how we actually meet the standards that
are already being achieved in other places.
David Miliband: Who has said it
is not a meaningful target?
Q613 Lynne Jones: It is not what
we do in 2016?
David Miliband: I have not heard
anyone say anywhere this is not a meaningful target; someone else
referred to aspirational targets. This is a legal requirement
in regulation. I will be fascinated to see, Swedes or others,
saying that somehow it is not meaningful.
Q614 Lynne Jones: But you accept
that we are going to allow for energy demand to grow.
David Miliband: There is a famous
book, Factor Four: doubling wealth, halving resource use,
and we have got to have a radical change in the way in which we
supply energy. That is the most important thing we can do. We
have also got to have radical change, which I applaud in the Energy
White Paper. The starting point in the Energy White Paper is how
do we reduce energy demand, and it has very ambitious plans for
energy efficiency, everything from stand-by switches to house
building, and that is a good thing because the accusation is always
at the start.
Lynne Jones: It is a good thing, but
to say it is ambitious is another thing.
Q615 Chairman: Secretary of State,
I am going draw stumps at that particular point. When we come
to produce our Climate Change: Citizen's Agenda Report, you will
have an opportunity to pick up on some of the points that concluded
our discussions. May I thank you and Mr Mortimer for your patience
and forbearance in being here and answering our questions and,
where possible, taking part in what I hope was a helpful discussion
on the Bill. We in due course will be producing our report. We
obviously look forward to your response to it. I am going to ask
the Committee members if they would be kind enough to remain behind
for a moment or two once the public and our witnesses have left.
Thank you very much for your contribution.
David Miliband: Thank you very
much. When do you conclude your report?
Q616 Chairman: This is it; you represent
the final act.
David Miliband: When will your
report—
Q617 Chairman: To use your famous
word "soon".
David Miliband: Good. Before 27
June or afterwards?
Q618 Chairman: We will hope we will
do it as quickly as we can.
David Miliband: Very good.
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