Climate Change Bill [Lords]

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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. Gummer rose—
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
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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