Mr.
Woolas: Why
Worthing?
Mr.
Gummer: Because it is a more polite word than Bognor! A
leisurely stroll on a Saturday afternoon is the sort of thing one might
do when one has nothing much more in mind. Instead, we should be
setting an example by getting on with the most serious job facing
us.
The
Government’s proposal has the worst possible connotations, sets
the worst possible example and gives full rein to the worst possible
suspicions. If I considered the proposal afresh, and was told that the
Government do not want to insist that big businesses tell the public
their carbon intensity in a form that is measurable and comparable, but
say instead, “We will take 18 months to produce some guidelines,
after which we will take another couple of years before we are prepared
to review the situation”, I would suspect that the Government
did not mean anything at all. I would suspect that the Government had
not got it.
This is a
serious matter for the Minister. I know that he has got it, but I
suspect that bits of the Government have not. The ill-named DBERR seems
to be at the heart of all this, and I suspect that a particular
Minister there is even more at the heart of it, as he was at the heart
of the disgraceful U-turn by the then Chancellor of the Exchequer, who
now happens to be the Prime Minister, in seeking a bit of extra
kudos.
The
Government must be very careful. They promised us proper reporting, but
that changed, not as a result of any ministerial decision, of proper
investigation or of real concerns, but following an overnight decision
by the then Chancellor in order to curry favour, pressed by the man who
then became a Minister in the Department of so-called enterprise. That
is why we feel so suspicious, not of the Minister who is present, but
of the Government’s whole history on reporting and measurement.
It is a sorry tale. I would very much like my fears and suspicions to
be allayed, but I suspect that they will not be. I hope very much that
those with broader minds, bigger hearts and a greater understanding of
what this is all about will join us in insisting on retaining the
clause and throwing out those two pusillanimous suggestions, neither of
which is worth a row of
beans. 5.45
pm
Mr.
Woolas: We have had a tremendous debate on this issue. It
has been fascinating to witness Committee members’ political and
ideological acrobatics. We have heard some excellent soundbites and
accusations. The proposals have been described as
“haphazard” and “textbook economics”. I
thought at one point that the hon. Member for Bexhill and Battle was
going to accuse me of being old Labour. My solicitors have been
e-mailed in case he repeats that outside the
room. This
has been an interesting debate, but it is based on a false premise. The
debate has been caricatured as a choice between mandatory or voluntary.
We believe that the Government’s strategy that is being
presented
to the House will be effective. It is all very well to act in haste, but
if we do so and it does not work, we will not achieve the objectives
that have been set out by hon.
Members. First,
let us look at the clauses that we are
discussing.
Miss
McIntosh: Will the Minister satisfy me that he is not
refusing to stick to the reporting procedures under clauses 80 on the
grounds of cost? Proof has been given that the costs will be minimal
and that there will be direct benefits to business for the reasons
given by my right hon. Friend the Member for Suffolk, Coastal. Will the
Minister satisfy me that he is not refusing to acquiesce on reporting
procedures on the grounds of
cost?
Mr.
Woolas: Yes, and I hope to persuade the hon. Lady of much
more than that. The strategy outlined by the Government in the Bill and
elsewhere is an effective way to achieve reporting. The Government are
making an important point and it is supported by the CBI. I do not
raise this argument just to reassure the right hon. Member for Suffolk,
Coastal. The CBI briefing states
that “The
CBI supports carbon reporting by firms and has an initiative underway
to assess the feasibility of a common standard of carbon reporting that
all firms could
use.” The
crucial point is that we should not prejudge how this measure should be
implemented. Therefore, we do not support the amendment made in the
Lords on corporate reporting. The Government’s argument is that
it would be tokenistic to say that we support mandatory reporting
before we have the common methodology that hon. Members have been
arguing for. We must develop a common method of reporting before it can
be made mandatory. To say that it should be mandatory and to caricature
the Government by saying that BERR Ministers have been foot-dragging is
unfair. We are laying out a strategy to achieve carbon
reporting.
Martin
Horwood: I must declare my connection to Business in the
Community through the all-party group on corporate
responsibility. It
is quite extraordinary that the Government are talking about prejudging
common criteria. There is a plethora of common criteria out there, such
as ISO 14001, Business in the Community and the environment
index. There are many indices and bases. As the right hon. Member for
Suffolk, Coastal pointed out, a lot of work went into the operating and
financial review, and it was ready to be implemented days before it was
dropped on a whim by the Government. It is naive and disingenuous of
the Government to suggest that there has not been sufficient time to
prepare common criteria. That is clearly
nonsense.
Mr.
Woolas: I will ignore the phrase “naive and
disingenuous”. One cannot have a plethora of common methods. If
an auditor told a company to choose the method of accounting that it
wanted and there was no national regulation on which one to use,
companies would
collapse.
Martin
Horwood: That is precisely the process that business went
through in the preparation of the operating and financial review. The
whole thing was designed to
provide a common framework that took the best from other reporting
criteria and provided a common basis on which all business was agreed,
but the Government ditched
it.
Mr.
Woolas: The hon. Gentleman is urging me to do exactly what
the Government are doing. That is why we have laid down the timetable.
I shall repeat what the CBI said:
“How
this might be
implemented”— the
common standard of carbon
reporting— “should
not be
prejudged.” That
is the point. We have a number of methodologies and a debate in this
country. Government new clause 6 is stronger in this regard than clause
80. If hon. Members who oppose clause 80 read new clause 6, they will
see that it
states: “The
Secretary of State must publish guidance”.
However, clause 80
gives no date by which that should take place. Clause 80 is silent on
the date, and it would allow the Secretary of State to ignore any
compulsion on reporting. The Government’s new clause
states: “The
guidance must be published not later than 1st October
2009.” I
remind hon. Members that we are in the financial year 2008-09, so that
is the earliest
date.
Gregory
Barker: The Minister is right that we need guidance, but
he fails to grasp that people are looking to the Government for
leadership. They are looking for that elusive quality of courage that
the Government talk about but do not show. People want the Government
to make a decision, but why should we have to wait until 2011? The
Manhattan project was completed in less time than that. The Minister
has made no case at all for why it should be spun out until
2011—it is
pathetic.
Mr.
Woolas: In which case why is the hon. Gentleman supporting
clause 80, which is silent on a date? The Government’s new
clause provides that the guidance must be published no later than 1
October 2009—at the end of the current financial year—as
I shall explain, using the powers that we already have in the Companies
Act 2006. Many companies are already reporting, so it would be folly to
put in place a mandatory system without being able to define what that
system was. That would be dangerous for all
concerned.
Mr.
Gummer: It would not be folly at all. All it would mean is
that there would be a clear, mandatory framework. All the Minister
needs to say to the Committee is that the Government will announce the
guidance within six months—it cannot be any longer
than that because they already have it in the work that was done for
their foolishly disbursed original arrangement—and follow the
rules. Why not? We would then have put in place the whole of the
package. For some reason unknown to me, the Government are always
saying that they must do this, that and the other bit before it is
ready, yet they want the general framework. That is how the Government
normally operate, which is why the House of Commons spends its time in
such a way.
That is all
the Minister needs to do, so will he please now say, “I will do
it in six months; I guarantee that that is what we will do, and we will
follow what the mandatory arrangement means, because it will then be
mandatory”?
Under the Minister’s proposals, there is no assurance that it
will be mandatory, even if the Government meet the dates, have the
discussions and go to
review. Mr.
Woolas: Will the right hon. Gentleman tell me which system
I am to
mandate?
Mr.
Gummer: The point is that it would be perfectly possible
today to mandate the system that industry had agreed in the original
proposals for reporting. As the Minister does not want to do that, I
have suggested that, given that there is no date, it does not stop him
giving the Committee a commitment that within six months he will have
come to an agreement to mandate what he will then decide is the best
system. That is what the Government should do. They should decide on
that, in company with the CBI and other organisations, and if he were
to promise to do that in six months, we would get ahead with a mandated
system. That would fit perfectly
well.
Mr.
Woolas: The new clause sets a deadline, which is after the
current financial year. One has to be realistic about such
things.
Gregory
Barker: Why is the financial year in
November?
Mr.
Woolas: We are talking about requiring companies to
report. That means that we have to give them advance notice before the
year in which they are required to report the methodology behind what
they are
reporting.
Mr.
Woolas: I give way to the right hon. Member for
frustrated,
south.
Mr.
Gummer: I feel frustrated because this is a
ridiculous argument. The fact is that we do not need 18 months to give
people a year’s notice. We want six months. They will still have
to have a year’s notice; we know that. Let the Government show
that they can do something in six months. Six months is a very long
time in which to get this done. We can do it perfectly well. All the
evidence is there. It is a question of getting three or four parties
around a table and saying, “Which of these are you going to go
for?” The Government have to go for it and make the
announcement. The mandatory arrangements are here, and we proceed. We
have taken a year off the Minister’s present timetable, as far
as the first stage is concerned, and two years off the second stage.
Have we not saved three
years?
Mr.
Woolas: With respect, the right hon. Gentleman is
repeating himself. It is a responsible course of action to give
companies advance notice. The right hon. Gentleman’s argument
would have strength if there was an agreed reporting system, but there
is not. Many people argue that the system should be international as
well as domestic. Different systems are proposed. That is why the CBI,
in its considered opinion, supports the Government’s position,
which sets out a timetable for
moving forward. Let me put some of the more technical arguments, and
then I will come back to the policy argument in an attempt to persuade
the Committee that the Government are not dragging their feet. We are
setting out a procedure to get to where we want to
be. Steve
Webb (Northavon) (LD): The Minister has assured us of his
intent. As ever, I do not doubt him. However new clauses 6 and 7 would
not have been drafted if the Government had not lost in the Lords. Why
were new clauses 6 and 7 not in the Bill in the first place if the
Government are so committed to such
things?
Mr.
Woolas: The hon. Gentleman is having his cake and eating
it—or trying to. Let me quote what my noble Friend Lord Rooker
said in response to the debate in the other place. He
said: “As
I and others have already said, when the Bill goes to the other
place”— by
that he meant
here— “the
Government’s collective view and individual views will determine
how the Bill finally ends up and the lines that are taken. There are no
lines in the sand in that respect. Every amendment that this
place”— the
other
place— “sends
to the other place will be considered and either rejected or modified,
as happens when the Government think again.”—[Official
Report, House of Lords, 31 March 2008; Vol. 700, c.
774.] That was
what my noble Friend undertook to do. He took the spirit of what the
other place was saying and said, “I will look at this. I will
work out a pathway to get there.” Rather than criticising the
Government, I was expecting that hon. Members would say, “Well
done, we have a way forward on which we have
consensus.”
Mr.
Gummer: Let me try not to be frustrated with the Minister,
but very direct. The difference is this: under the clause, people have
to do something. Under the Government’s new clauses, there is no
reason why they should have to do something. Those are two different
things. That is not carrying the spirit of one, but merely using the
words and the form. It is a hollow shell. If the Minister guarantees
that he will use some other powers in a sensible time scale, we are
willing to listen to him. As long as he asks us to accept that it takes
18 months to come to a conclusion—when most industrial spokesmen
believe that it can be done much more quickly—and then does not
commit himself to impose the measure in the way in which the clause in
the Bill insists, we really have to say to him that the proposal is a
pale shadow that is unconnected with the spirit of what was happening
in their lordships’
House.
Mr.
Woolas: I have accused the right hon. Gentleman of
repeating himself, and I am repeating myself now. That argument would
be fine if existing clause 80 told me what to do—which system of
mandatory reporting—and by when. It does not say by when. There
is no
date. 6
pm I
can do better than the right hon. and hon. Members are asking. Not only
can I give a commitment, but I can point to a power that already
exists. If we wanted to impose different requirements on companies,
there are
already comprehensive powers to vary reporting and accounting
requirements in the Companies Act 2006. Section 416 gives the Secretary
of State the power to make provision by regulation about matters to be
disclosed in the directors’ reports. Section 468 includes a
power for the Secretary of State to make provision by regulation about
the reports that companies are required to prepare, and their form and
content. There is already a requirement on companies to report the
environmental impacts of their
activities. The
debate is taking place in a vacuum. Opposition Members are trying to
portray the Government as somehow backtracking and foot-dragging.
Instead, we are setting out a strategy to achieve the reporting of
greenhouse gas emissions. Let me make an additional point: the
existence of climate change agreements, the European Union emissions
trading scheme and the new carbon reduction commitment already require
companies to do what is being asked of the Government. The idea that
the Government are foot-dragging is not borne out by the facts or the
proposals before the
Committee.
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