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Recycling saves the equivalent of approximately 18 million tonnes of CO2 a year and our waste strategy, which was published last year, sets out how we can recycle or compost half of all household waste by 2020. As well as recycling, reducing our overall demand
for scarce natural resources is essential if we are to meet the challenges that face the natural environment. A disposable society is not a sustainable society. That is why the 13 billion, free, single-use, plastic and other bags that are distributed in the UK each year are a symbol of a disposable society. There has been growing public concern about that symbol and the Government, using the Climate Change Bill, will legislate to require retailers to impose a charge if they do not take voluntary action.
Steve Webb: The Secretary of State has been generous in giving way. He briefly mentioned business recycling and then got on to carrier bags. Is the Department not cutting money to support organisations such as the Waste and Resources Action Programme and the National Industrial Symbiosis Programme, which help businesses to recycle? Is there not a disjunction between the right hon. Gentleman’s rhetoric, with which we all agree, and the reality—the cuts that the Department is making?
Hilary Benn: No, there is no disjunction. We have put a considerable amount of money into several such organisations and we continue to fund them. However, we must deal with the issue of whether, when it is in the interests of business to reduce carbon emissions and improve recycling, it is right for the Government to continue to pay for free advice to be given to it. Is it not reasonable to ask business to begin to pay for some of that advice? I have made the decision that it is reasonable to ask business to contribute to the cost of getting advice. We have set our budget on the basis of that policy and I am clear in my mind that it is right.
In addition to our changes to deal with plastic bags, landfill tax will increase by £8 a tonne from 1 April and by that amount each year until at least 2010-11. The aggregates levy ensures that the external costs associated with the exploitation of aggregates are reflected in the price. It will increase to £2 a tonne to maintain its environmental impact.
I want to consider the impact of changes in fuel price on those who find it difficult to pay their bills. As the House knows, more than £20 billion has been spent on benefits and programmes since 2000 to help to remove people from fuel poverty. That has led to 4 million households being removed from fuel poverty since 1996—the figure is down from 6.5 million to around 2.5 million, although the rise in energy prices means that it is rising again. Further action to help to tackle fuel poverty and vulnerable groups is therefore needed.
Energy companies spend approximately £50 million a year on social programmes and the Government want that figure to increase to at least £150 million a year. We will work with companies to achieve that, and legislate if necessary.
Alan Simpson (Nottingham, South) (Lab):
Will my right hon. Friend go back to the figures that he used? Does he accept that the current figure for the number of households back in fuel poverty is estimated to be 4 million, and that the challenge that faces us is that the numbers that the Government’s Warm Front programme took out of fuel poverty are being
overtaken by those thrown back into it, simply because of the scale and pace of rises in energy costs?
Hilary Benn: That is the case, as I just acknowledged, because of the substantial increase in the prices that energy companies charge and that consumers have to pay. That is why my right hon. Friend the Chancellor announced in the Budget his wish for energy companies’ expenditure on helping vulnerable customers through their social programmes to increase. It is also why he drew attention to the fact that customers who use prepayment meters typically pay around £55 more on their energy bills than those who use standard credit and £144 more than those who pay by direct debt.
Harry Cohen (Leyton and Wanstead) (Lab): My right hon. Friend has been generous in giving way. A wish is not the same as a requirement for energy companies to put in that money for vulnerable households. What will the Government do to monitor the position? Will they introduce a requirement? It has been reported that there was an argument in the Cabinet about whether there should be a requirement. I would be interested to know the Secretary of State’s position on that.
Hilary Benn: I will happily tell my hon. Friend what my view and the Government’s view is. We think it is now time to tackle the issue and we are looking to Ofgem and the suppliers to bring forward proposals for treating prepayment meter customers more fairly. However—this is the answer to his question—if sufficient progress is not made by next winter, the Government are prepared to use statutory powers to reduce the differential between prepayment and other forms of payment.
In the meantime, as my hon. Friend and the House will be aware, we are providing immediate help to pensioners who face pressures from higher energy bills this year, by raising the winter fuel payment for the over 60s from £200 to £250 and for the over 80s from £300 to £400. Some 9 million pensioner households will be better off as a result. I simply remind the House that before 1997 there was no winter fuel payment at all.
Mr. Patrick McLoughlin (West Derbyshire) (Con): Will the Secretary of State give way?
Hilary Benn: I am going to bring my remarks to a conclusion, as I have been very generous in giving way.
One the reasons why today’s debate is welcome is that it gives us the chance to discuss the change that is to come. In the rest of this century, debating and deciding on our carbon budget will be as important as doing so on traditional financial budgets, and arguably even more so. The measures that I have set out in my speech have shown the practical steps that the Government are taking to enable the country to reduce its carbon emissions. It is for that reason that we have a strong record on the environment; but I recognise, as does the House, that we will all need to do more to help build a low-carbon Britain. The Budget shows exactly how and why we are determined to do that.
5.1 pm
Mr. Peter Ainsworth (East Surrey) (Con): I have to take issue with the Secretary of State’s final sentence. He barely spoke about the Budget in his remarks and the Budget hardly deals with the pressing environment challenges that we face at all. On the other hand, I do not doubt for a moment his integrity and sincerity on such matters. My hon. Friend the Member for Bexhill and Battle (Gregory Barker) and I heard him speak at the Chemistry Club last week. He gave a passionate and committed speech about the environment and the importance of living within natural limits, which is a lesson that the whole of humanity has to learn. He said:
“We are living beyond our means”,
which is true in respect of the environment, but unfortunately it is true of the Chancellor, too, in respect of the economy. That is one of the dilemmas that we face.
The Budget was supposed to be the great green Budget. The headline in The Guardian on 10 March ran “Darling plans greenest budget yet”. We expected it, we wanted it and we were all prepared for it. Indeed, the Chancellor warmed us up for it last December, when he said:
“Sustainability will be at the heart of the next Budget. This is not an optional extra, it is essential to all our futures.”
In his Budget speech, the Chancellor cranked up the excitement further, saying:
“our greatest obligation to the future must be to tackle climate change.”—[ Official Report, 12 March 2008; Vol. 473, c. 295.]
I agree, so I was looking forward to the greenest Budget yet. We needed the greenest Budget yet, because carbon pollution in this country is higher than it was in 1997. On that most fundamental of measures, the Government have failed.
To say that I was disappointed by the Budget is a huge understatement, but I was not alone in being disappointed. The director of Friends of the Earth said:
“He has merely tinkered at the edges”,
“the overall package falls a long way short of what is required. We urgently need real political leadership on this issue”.
The executive director of Greenpeace said:
“His measures have failed to match the scale of the challenge we face”.
Perhaps the headline from the Green Alliance summed it up best: “Green Budget? What Green Budget?”
I am happy to take as my text for this debate the press release issued by the Department for Environment, Food and Rural Affairs on Budget day. It is headed “Benn welcomes Budget 2008” and sets out the Department’s response to the measures announced by the Chancellor last Wednesday. I suspect that it was issued through gritted teeth. The opening paragraph of the press release appears to be have been drafted before the Department knew what was in the Budget, and reads:
“The Chancellor today set out the 2008 Budget which includes measures to tackle climate change, the most serious and pressing environmental challenge the world faces. Setting out new policies to reduce emissions across all major sectors of the economy, this Budget will ensure the UK continues to lead the climate change agenda internationally while the government continues to take action to protect the UK’s natural environment.”
There are no policies in the Budget to
“reduce emissions across all major sectors of the economy”.
Or, if there are, I would be grateful if the Secretary of State could tell us what they are. If there had been any, he might have been able to tell us by how much he expected carbon emissions to be reduced as a result of the Budget measures, but he was unable to do so.
The next paragraph of the press release has a faltering tone and conveys a sense of putting on a brave face. It states:
“Following the Budget statement, Hilary Benn said: ‘This Budget demonstrates how seriously the Government takes the environment, with clear incentives for action, for example the new vehicle excise duty bands and charges for plastic bags, and measures to reduce emissions, for example zero carbon new commercial buildings.’”
I shall say more in a moment on the new vehicle excise duty bands, charges for plastic bags, and zero-carbon new commercial buildings, but let us first reflect on that list of highlights. It reveals just how pathetic the Chancellor’s measures are in response to
“the most serious and pressing environmental challenge the world faces”.
It contains only a car tax, a charge on plastic bags—perhaps—and a promise to do something about commercial property in 2019.
Let us move on from the headlines to the nitty-gritty, such as it is. Most of it comprises familiar, heated-up re-announcements, or has been borrowed by Conservative party policy—we are always pleased when the Government do that—or will merely have a marginal impact on climate change. The press release continues:
“The Green finance measures in the Budget include: Laying the ground work for the introduction of five-year carbon budgets”.
That is an achievement not of the Budget but of the Climate Change Bill, which was introduced only after a concerted campaign by green groups, the Conservative party, and other Opposition parties. We support the Climate Change Bill, and I am pleased to say that those in another place have introduced some important amendments, which I trust the Government will not seek to overturn when the Bill comes to our House.
A report entitled “UK greenhouse gas emissions: measurement and reporting”, published by the National Audit Office at the weekend, has thrown some worrying light on the way in which the Government measure the carbon that we produce. It seems that we might be using dodgy data. The NAO report raises profound questions about the credibility of the Government’s approach to reducing carbon emissions, which threatens to send its climate change strategy off course. If the measurement of carbon and other greenhouse gases is flawed, the whole process of setting targets for cutting emissions is undermined.
To make matters worse, there has been an extraordinary degree of ambiguity about the targets that the Government have set themselves. They repeatedly boast that the one target that they have met is the unambitious Kyoto target, but even that is now being called into question. It all depends on the system of measurement used. It is unclear whether the confusion is accidental or whether there has been a deliberate attempt to create wriggle room. The Lib Dem spokesman was right to draw attention to this earlier, and to point out that, on one basis of measurement, we have not
reduced our greenhouse gas emissions at all since 1990. The existence of two quite separate carbon accounting systems would do credit to Enron.
There is an urgent need to rationalise the reporting system, so as to make it coherent and consistent. The NAO report reveals not only that different Government Departments use different methods to measure their carbon emissions, but that it is possible, within Departments, for two separate systems to be used to make different points.
It is all very well for the Chancellor to announce in the Budget that next year will see the establishment of the first carbon Budget, but he might also have pointed out that there is at present no true or fair means of validating it.
Hilary Benn: Will the hon. Gentleman confirm to the House that the figures that we report to the United Nations framework convention on climate change follow the guidelines that are set down by the intergovernmental panel on climate change, and that we do that in the way in which the panel has requested?
Mr. Ainsworth: I accept that. However, this becomes more difficult when that method of measurement is applied to UK emissions, as aviation and shipping are excluded. As a result, it does not give a true and fair picture of our emissions. In the absence of reliable and honest reporting, nobody will have confidence in the system. In view of the seriousness of the issue, the Secretary of State should address it as a matter of urgency when he responds, as no doubt he will, to the National Audit Office report.
Beyond the problems of accounting for domestic carbon emissions is the revelation that the Government are planning to allow up to half of our progress towards meeting our carbon reduction targets by 2020 to be met by buying our way out of the problem with overseas credits. No mention was made of that in the Budget and Ministers have not mentioned it at all. We now know, thanks to the NAO’s work, that the Office for National Statistics does not have enough faith in the reporting standards of the overseas carbon credit market to include international credits in the official national statistics. Any problems with the accuracy of measuring our own domestic carbon pollution are magnified when we try to apply measurement on a global scale.
I know that this may seem rather nerdy, but it is fundamental to the Government’s credibility on the whole climate change agenda—an agenda that, in the words of the Chancellor, is “essential” to “all our futures”. Do the Government plan to buy their way out of dealing with climate change; will they put a cap on the indulgences that we can buy from abroad; or have they instead a plan for a dynamic transformation of our country’s economy towards low-carbon, prosperous, greener and safer industries that will be truly essential to all our futures and truly essential to the well-being of our children and grandchildren? It is essential if their carbon budgets are to have proper credibility that the Government act urgently to clear up the questions now being raised about dodgy data and the purchase of foreign indulgences.
The next line in the DEFRA press release refers to
“reform of car vehicle excise duty rates and bandings including the introduction of new bands from 2009 to reward drivers of the cleanest cars, and higher first year rates in 2010-11 to influence purchasing choices”.
We can agree that, in principle, it is better to influence choices at the point of purchase—at the point of choice—than to penalise people for decisions that they have already taken, but there is a world of difference between genuine green taxation and stealth taxation. It is a difference that the Government do not seem to get and, as a result, a difference that the public do not get either.
As an Ipsos MORI report suggested last year,
“the public appear far from convinced that measures announced under the banner of climate change are actually intended to benefit the environment...Trust is a key factor impacting on the ability of government to make the case to its electorate about any particular policy measure, and eco-taxation... suffers from the stigma of ‘stealth’ taxation”.
We need to shift the burden of tax away from good things such as families and work and on to bad things such as pollution, especially carbon pollution.
The key point is not to raise the overall burden of taxation, so what does the Chancellor do in his Budget? He proposes increasing car taxes to generate an additional £735 million in revenues while the tax cut on low-carbon cars will give back to us £15 million. To put it another way, the Chancellor is raising 50 times more tax than he is cutting. In the light of that fact, it is extraordinary for the Chancellor to claim that an average family will be no worse off as a result of those changes, when seven in 10 motorists will pay more in vehicle excise duty.
Stewart Hosie: Is not the position actually worse than that? In the next two years, the take on the vehicle excise duty change will be £1.2 billion. Given that amount of extra yield, does it not indicate to the hon. Gentleman that the Government are not planning for any behavioural change? It is indeed just a tax.
Mr. Ainsworth: I think that the hon. Gentleman makes an extremely good point. That is one of the reasons why the Secretary of State had such difficulty answering my questions earlier.
What will all the extra tax do for the environment? That is what we need to know. According to The Guardian, it will help reduce CO2 emissions from the transport sector by less than 1 per cent. So, it is not a green tax; it is not a meaningful part of the solution to the greatest challenge that we face. It is a stealth tax. I cannot think of a better way to alienate the public from the whole green agenda than dressing up stealth taxes as green.
Steve Webb: Clearly, there are two points here: what happens to the money and the structure of the tax. If all the money raised through the increased tiered VED had gone on some other tax cut, would the hon. Gentleman have considered that, as a package, a good thing? Does he support VED being tiered, particularly for new cars, provided that the money is spent cutting other taxes?
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