Mr.
Woolas: I thought that the amendment was one of the
cleverest that has been tabled because of the point made by the hon.
Member for Northavon. The figure sounds small but, as in all such
matters, the devil is in the detail. He is right that the amendment was
discussed at some length both in Committee and on Report in the other
place, and I refer members of the Committee to the Hansard
record of those
debates. The
accusation has been made that the figure of 1 per cent. has been
plucked out of the air. Nothing is further from the truth. All the
figures under the Bill are scientifically based and have been debated
robustly. In case the hon. Gentleman mistakes my tone of voice, let me
reassure him. Why do we consider that the 1 per cent. borrowing limit
is appropriate? Our analysis suggested that allowing up to 1 per cent.
of a future budget to be borrowed would be consistent with the rising
emissions that might result during odd weather. The right hon. Member
for Suffolk, Coastal reminded us of the importance of that to the
BritishI think that he referred to the English, but I am sure
that he meant that it was the British predilection to discuss it.
Furthermore, we must bear in mind the uncertainty of emissions
data. There
have been three large emission rises due to unexpectedly cold winters
since 1990, the coldest of which led to emissions in those years that
were between 3 per cent. and 4 per cent. higher than in the year
before. Translated into the clause, that means that if 0.8 per cent. of
the subsequent budget was borrowed4 per cent. divided by the
five years of the budget periodthe shock could be absorbed
within a 1 per cent. limit on borrowing and the budget would still be
met. That is my methodology. I agree that it is not rocket science, but
it makes mathematical sense. It is
symmetrical. A
more serious point is that those extremes of climate are, of course,
expected to increase with climate change.
Mr.
Woolas: I knew that I should not have said
that.
Mr.
Gummer: According to the Stern report and other reports,
the problem is that we shall have a decrease in emissions as a result
of cold weather and an increase in emissions as a result of hot weather
because of less emissions due to heating and more emissions due to air
conditioning.
Does the
Minister accept that it would be rather good for the nation if it knew
that it had to face the fact that the Government were going to stick to
the targets? The nation would react much better if, rather than the
Governments saying, more or less, every time one of these
things happened, When it is particularly bad, we have this
stuff in our back pocket that we can bring out, they said,
We are not going to change this because we are stuck with
targets that are fixed not because of our ability to meet them but
because of the reality of the threat. That is why I would be
much happier with a smaller figure and a greater degree of
straightforwardness from the
Government.
Mr.
Woolas: I hesitate to argue this point on common sense
because when Ministers or Front-Bench spokesmen start using that
argument, it shows that they are on weak
ground.
Mr.
Woolas: Not desperate, but on weak ground. I counter with
the opposite argument and say that the British public would not
understand if we were not able to have that point of view. Again, we
are not trying to wriggle out of
this. Let
me complete my argument about the emissions data. All of us in the
world of politics and Parliament talk about emissions data as if it
were a pure measurement of geometry: it is not, I am afraid, although
hopefully it will be in future. Provisional figures for emissions in
the final year of the budget period will be available shortly after the
period endssuch figures are generally accurate to within a few
per cent.but the final confirmed emission figures are not
available until later. That is part of the frustration of the job. As
the budget period would already have ended, if the emissions for the
last year of the budget period were to be revised upward by the amount
proposed, the Governments options would be limited. The 1 per
cent. limit is therefore considered the most appropriate approach to
providing a small degree of flexibility because it meets the five-year
point that the hon. Member for Northavon mentionedI am talking
about the end of the period, of coursewithout undermining the
clarity and certainty that the budget system as a whole provides, which
are
crucial. It
is important for the United Kingdom and UK plc that we have ensured
that a robust system of accountability is in place, in that the UK
Government must seek and take into account the advice of the Committee
on Climate Change and consult the devolved Administrations before using
either the banking or borrowing powers in the clause. That will mean
that any decision to bank or borrow emissions will be based on robust
independent analysis. Further to that, analysis suggests that allowing
up to 1 per cent. of a future budget to be borrowed would be consistent
with the rise in emissions that
might result from these two factors. We have
followed the advice of the other place and provided a credible argument
for 1 per cent. I confess that it is not scientific and can be
challenged, as it has
been. I
am grateful to the hon. Member for Bexhill and Battle for moving his
amendment to question why that 1 per cent. figure was chosen, because
he has rightly forced the Government to outline their methodology and
rationale; that is the raison dĂȘtre of Committees. I am
sure that the hon. Gentleman will hold me, or my successors, to account
on this
point.
Gregory
Barker: I am grateful to the Minister for that
explanation. I am certainly more informed. This is a probing amendment
and I do not intend to press it to a Division. I beg to ask leave to
withdraw the
amendment. Amendment,
by leave,
withdrawn. Question
proposed, That the clause stand part of the
Bill. 6
pm
Steve
Webb: We have considered the specific number, but there is
a wider principle about the banking and borrowing idea. Do we need this
power at all? If there is a problem with hitting the carbon budget in
any period, a facility is available to buy in credits, because this is
the UK carbon account, not UK carbon emissions. Assuming that we do not
get to 31 December at the end of the fifth year and suddenly think,
Ooh eck, were in trouble, and assuming
that things will be very closely monitored by experts, scientists,
forecasters, meteorologists and all manner of people, presumably it
should not come as a total shock if we are on course to miss the
target. If there is any prospect of missing the target, mechanisms
other than those in the clause are available to deal with itfor
example, we could buy in credits.
A facility
for injecting savings into the current period appears unnecessary,
therefore, but the opposite provision of pushing savings into the next
period is, if anything, more worrying. It suggests that, if we do
really well in the first period, we could give ourselves a few weeks
off in the next five-year period. It is almost like working overtime
and then having a vacation, which is fine in working life, but does not
represent a sane or desirable carbon strategy. The clause will allow us
to say, Not only will we hit our targets, but we will have some
slack and carbon savings to spare, so we will push a few into the next
period, which means that we will not have to try so
hard.
Given
everything that we discussed at the start of our
proceedingsabout this being a global challenge, of which the UK
is a small point, and about how we need to do as much as we
canif we over-achieve, we should literally bank that and
continue to be adventurous by maintaining the trajectory, but from a
new starting point. We should not simply pat ourselves on the back and
say, We have done quite well. We consider ourselves to have
achieved our goals already, even if we dont do very well in the
next five-year period, because it is already in the bank. That
is not the mindset with which we should approach this
issue. I
would be very worried if we were skating so close to the upper limit of
the five-year target that provisions would be necessary in case we
breached it. After all, we are dealing with ranges, so I hope that we
would aim to meet the targets comfortably, but
fail-safe mechanisms are in place if it looks as though we are going to
exceed
them. On the other side of the coin, if we are
over-performing and doing really well, which gives us breathing space,
we should not just relax, but say, Thats great.
Weve achieved good things, so let us press on from a new
starting point, rather than have a few weeks, months or years
off. I cannot see any reason for clause 16 to stand part of the
Bill.
Mr.
Gummer: I disagree with everything that was just said. If
we are to run this thing sensibly, we should provide for the ability at
either end to sort things out. As anyone who knows anything about
writing books knows, before starting, one must say, for example,
Ive got to write 10,000 words a day. However,
on completing those 10,000 words, it is a great mistake to do another
5,000, because the next 10,000 never get done the next day. It is
necessary to keep to an organised system. There is a great deal to be
said for tough targets run sensibly and a Government who stand by their
word, but who have the necessary opportunity at the end of each of
those otherwise artificial periods to carry over
amounts.
Mr.
Woolas: I am worried about what book the right hon.
Gentleman is writing and when it will be delivered. A draft copy for
review would be dealt with in strictest confidence. I remind him that
the incentives for early action and over-achievement are recognised by
the Kyoto protocol, for the reasons that he
gives.
Mr.
Gummer: We must be tough with ourselves and do this
properly. Furthermore, we must not let ourselves down by being
pusillanimous over the targets and carbon budget or get into the
position of the iron
maiden.
Mr.
Woolas: The right hon. Gentleman makes some very good
arguments. In addition, I use the example of the evidence cited in the
Stern review about the United States acid rain programme, which the
right hon. Gentleman and others will recall. Allowing for banking
between phases of that programme helped to deliver early reductions and
improved participants efficiency. The evidence suggests that,
because of the ability to bank from the first phase into the second
phase, the emissions reduced in phase 1 were twice that required to
meet the
cap. I
take the arguments of the hon. Member for Northavon. They are slightly
purist, but I do not criticise him for that. He is right to press the
issue, but in practice it makes sense, from experience and from
analysis, that we allow some give and
take. Question
put, That the clause stand part of the
Bill: The
Committee divided: Ayes 17, Noes
2.
Division
No.
5]
Question
accordingly agreed to.
Clause 16
ordered to stand part of the
Bill. Clause
17 ordered to stand part of the
Bill.
Clause
18Duty
to report on proposals and policies for compensating for budget
excess
Martin
Horwood: I beg to move amendment No. 35, in
clause 18, page 10, line 6, at
end insert and any
sanctions proposed against those responsible for budget
excesses. What
happens if we fail? Taken collectively, globally, the consequences are
unthinkable. The cost of failure is famine, poverty, disease and death
on an unprecedented scale. However, what happens specifically if we,
the British political class, fail to meet the objectives being
discussed in the Bill? I am saying we because I am not
assuming that the Labour Government will still be around in 2012-13. It
could be any of us, any combination of us or any of our successors who
are in government at the
time. At
the moment, the great sanction present in the Bill is a report on
proposals and policies. In a sense, that is appropriate. If the budget
target is missed, action must be taken. It is a greater
threatbut only justthan the letter that has to be
written by the Governor of the Bank of England on behalf of the
Monetary Policy Committee to the Chancellor for exceeding the inflation
target. I suspect that, as more and more inflation targets are missed
and more and more letters are written, familiarity might even breed
contempt for that sanction as well. I can see the Treasury quaking in
its boots at the receipt of another letter. Likewise, I do not see
Parliament shaken to its foundations by the need to produce a report.
Yet in most cases when Governments break the law, which in a sense is
what we are talking about when the targets are missed, some
consequences normally follow.
There have
been various suggestions as to what those sanctions might be. In
another place, Lord Teverson suggested that the Secretary of State
might one day be dragged away to the Tower of London because the
targets had not been met. I do not think that he spoke in all
seriousness but, given the consequences of failure, we must think
seriously about what should happen to Secretaries of State who preside
over the missing of such targets. We as the British Parliament could
think collectively about a financial penaltythe Treasury could
buy the carbon credits, perhaps at a premium, to make up for the lost
target. However, that rather undermines the arguments about trying to
minimise the proportion of targets met by purchasing credits, rather
than by a genuine domestic effort to decarbonise the economy. If, at
some stage, the Treasury could be persuaded to say that that was an
affordable route, the sanction would clearly have been
counter-productive, as it would have encouraged the Government to think
about buying their way out of the problem.
We tried to
table an amendment that would have caused an automatic reduction in
Cabinet salaries equivalent to the excess by which the target had been
missed. I thought that it was an exciting amendment; it would have led
to an interesting debate that could have extended
into the general area of performance-related pay for Ministers and
Governments. Sadly, it was ruled out of order on the grounds that there
are, apparently, already existing processes for setting Cabinet
salaries, and this was not one of them.
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