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Hilary Benn: My hon. Friend is absolutely right. The truth is that pressure from below helps Governments to move. We need politics that is a combination of leadership and those pressures. Indeed, the Climate Change Act was the result of two forces at work. One was the Big Ask campaign, which was a movement from below that said, “We should have a climate change Act in the UK,” and the other was political leadership from the Government, who said, “Yeah, that’s what we’re going to do.” The Bill was drafted and the Act is now on the statute book.
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That shows what we can do. Frankly, if we had asked someone 10 years ago what they thought the chances were that we would get a climate change Act, they would have said, “Well, I don’t think it’ll happen in Britain.” However, it did happen, for precisely the reason my hon. Friend described.

Mr. Roger Williams (Brecon and Radnorshire) (LD): Agriculture has a large part to play, through improved land management, increasing carbon sequestration and mitigating flooding by improving the permeability of the land, yet the Government have reduced research into agriculture over the years. Tomorrow I will visit Aberystwyth, where a lot of good work is being done along those lines. What plans do the Government have to increase the amount of money that they commit to agricultural research?

Hilary Benn: If the hon. Gentleman looks at the funding that goes in from DEFRA or the Biotechnology and Biological Sciences Research Council—in the end, it does not matter where the funding comes from; it is all public money going into research—he will see that the amount has increased. I draw his attention to the LINK programme in particular, which funds a range of practical projects that are near market and tries to turn our research understanding into practical applications that farmers can use. As we learn about what works, it is important that we have a way of translating it into action on farms. In truth, the way research projects have been conducted in the past has perhaps not paid enough attention to that onward transmission of the knowledge, because in the end, the purpose of the research, if we find something better than what we are doing at the moment, is to get people to use it.

Dr. Alan Whitehead (Southampton, Test) (Lab): I, too, strongly welcome the publication of these stark but important projections today and my right hon. Friend’s statement in support of them. Does he accept that they will mean the almost complete decarbonisation of our energy economy at an early stage and that success at Copenhagen, which I fervently hope for, will increase our targets in that respect, as a result of our arrangements for climate budgets? Will he commit his Department to move further on the circular metabolism of resources in our economy, and in particular on the use of waste as a recovered resource and a vehicle for decarbonising energy, through heat gain from biogas?

Hilary Benn: I agree with my hon. Friend about the need to decarbonise and to change the way we think about waste. Let us take a practical example: aluminium cans. Why would we want to chuck them away into landfill? We know that if we recycle them, we can get £550 a tonne for them. It takes about 90 per cent. less energy to produce another can, as opposed to making one out of virgin material. That is a practical example of why it makes sense to think about waste in a different way. If we are talking about the right policies, the landfill levy has been very effective in moving us from 8 per cent. of domestic household waste recycled 12 or so years ago to just over 36 per cent., which is what we have now reached, although we need to go a lot further.

Mr. Philip Hollobone (Kettering) (Con): Kettering is located in one of the driest regions of England—the Anglian Water region—yet, under Government plans, it
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faces an increase of about a third in the number of houses by 2021. Given the variations in rainfall that the Secretary of State mentioned in his statement, is it not time to reconsider proposals for a national water grid, perhaps using Britain’s canal network, as well as, unfortunately, a rapid increase in Britain’s reservoir capacity?

Hilary Benn: Anglian Water is indeed serving an area of the country where there is particular difficulty. The long-term plans that it and other water companies will have to bring forward will be the means by which they consider all the points that the hon. Gentleman makes. The difficulty with a grid is what might have to be built in addition, as well as the energy involved in pumping huge amounts of water around the country. This goes back to what my hon. Friend the Member for Morley and Rothwell (Colin Challen) said earlier. The projections give us better information that will enable those making planning decisions to take into account all the consequences, including ensuring that there is enough water. It is clear that we will have to use water much more efficiently in future. Just under a third of homes now have a water meter, and we all know that, in the water-stressed areas of the country, there will have to be near-universal application before 2030.

Barry Gardiner (Brent, North) (Lab): I welcome my right hon. Friend’s statement. He will be aware of the intergovernmental panel on climate change’s last, rather out-of-date forecast that remaining at just 2° would involve a figure of 450 parts per million. The latest projections would require a reduction from business as usual of 17 gigatonnes of CO2 emissions globally by 2020. It would be possible to achieve only a 5 gigatonne reduction within the developed nations, which means that a reduction of 12 gigatonnes would have to be achieved by developing nations, with all the perceived injustice that that would entail. Of those 12 gigatonnes, it would be possible to achieve five through plans involving forestry. What funds will be required to produce the offsets from the developed to the developing nations to meet that target?

Hilary Benn: The straight answer to my hon. Friend’s last question is “a lot”. He is right to point out the dilemma. Negotiators will have to face the fact that even if the rich world could stop emitting CO2 tomorrow morning—for the sake of argument—the developing economies would still have to make a contribution; otherwise, we would still face dangerous climate change. Financing for adaptation, mitigation and, crucially, technology will be a really important part of getting a deal. The announcement on coal by my right hon. Friend the Secretary of State for Energy and Climate Change was significant not only because of what it said about the framework that will apply in the United Kingdom but because we will have to demonstrate carbon capture and storage operating on a commercial scale if we are to have any hope of achieving the reductions to which my hon. Friend refers. Those who develop the technology first will have the opportunity to sell it to others, and we will then have one of the means that we need to deal with this issue.

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Mr. Peter Ainsworth (East Surrey) (Con): These are obviously challenging projections, and they reinforce the need for a robust deal at Copenhagen at international level and for stepping up domestic efforts, both direct and indirect. On the indirect front, will the Secretary of State confirm that it is becoming increasingly clear that imports of biofuel are contributing to the global problem of climate change, rather than helping to solve it? Is it not crazy that Government policies are helping to annihilate the rain forest in the name of the environment? Will the Government consider suspending the renewable transport fuel obligation until proper sustainability criteria have been put in place?

Hilary Benn: The hon. Gentleman makes an important point. In the end, we want sustainable biofuels, not unsustainable ones. That is why we asked Ed Gallagher to undertake his review last year. He recommended that we make some adjustment to the pace at which the renewable transport fuel obligation should grow, and we responded to that. The evidence is pretty clear in relation to the direct impacts of biofuels: some are better than the diesel and petrol that they are replacing, and some are worse. We do not want to do worse, do we? The real question, however, is the indirect effects. In fairness, Britain has been at the forefront in arguing internationally for precisely the sustainability standards that the hon. Gentleman calls for, because that is what we will need if we are to avoid the deforestation he has drawn to the House’s attention.

Mr. Andrew Tyrie (Chichester) (Con): The Secretary of State is placing very heavy emphasis on these projections, and therefore on the complex models on which they are based. According to the Hadley Centre, there has been no global warming in the first nine years of this century so far. Did any of the models on which he is relying successfully predict that pause?

Hilary Benn: This century is nine years old. Courtesy of the ice cores in the Arctic and the Antarctic, we can go back 400,000 years and look at what has happened in the cycle of warming. It has gone up and down, but what has changed in the past 100 years is the rise in the concentration of CO2 in the atmosphere. The fact that nine of the hottest years on record here in the UK occurred in the past 15 years shows that this change is happening. There may be some who want to deny this—[Hon. Members: “There are!”] But they are in a diminishing minority. I am not a scientist and neither is the hon. Gentleman, as far as I am aware, but, given the overwhelming advice that we are getting from the scientific community about not only the uncertainty but the direction in which we are travelling, it would be a very imprudent Government who did not take serious notice and respond to it.

Mr. Alan Reid (Argyll and Bute) (LD): Agriculture depends on a finely tuned climate balance, and the projected changes in the climate will have severe implications for agriculture in this country and throughout the world. What is the Government’s strategy to ensure that farmers here can cope with climate change and that we have the flexibility to increase production in this country if climate change should cause natural disasters resulting in a drop in food production elsewhere in the world?

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Hilary Benn: The hon. Gentleman raises an important point about the interdependence of world food supply. Some have argued for self-sufficiency, but we cannot be self-sufficient because some of the foodstuffs that we eat cannot be grown here. Furthermore, if a country were self-sufficient and something happened to affect its agriculture, what would it do? We need a combination of domestic and other production, although we are more self-sufficient now than we were in the 1930s and the 1950s. We also need to try to get production up, and to work with farmers to help them to adapt to the changing climate. We have been doing that with the industry; that is what part of the research programme is seeking to address. We have been giving guidance and encouraging people to think about the changes that they can make. I visited an apple farmer on open farm Sunday a week and a bit ago. In the corner of his field, there was a new water storage tank that he had built, because water supply is really important for growing the Cox’s apples that he is so proud of.

Mr. Desmond Swayne (New Forest, West) (Con): The Secretary of State rightly pointed out in his statement that we have now established in law very challenging targets for the reduction of emissions. When are we going to get anything like a plan for how those targets are going to be delivered?

Hilary Benn: The hon. Gentleman will not have to wait too long. We are taking things in stages, and the first thing was to get the Climate Change Committee, which was established under the Climate Change Act 2008, to give us advice on what it thought the carbon budget should be. The second was for the Government to adopt those budgets, which happened alongside the money Budget, with which everyone is familiar. The third part will involve the publication of a plan to demonstrate how we intend to achieve the reductions set out in those budgets.

Andrew George (St. Ives) (LD): I represent an area of west Cornwall and the Isles of Scilly, where there will be growing anxiety about the impact of the projected changes on the rise in sea levels. What impact will the Secretary of State’s announcement have on the timetable for the publication of the Environment Agency’s coastline management plans? How will it affect our assessments of coastal defence and future developments affecting the coastline?

Hilary Benn: Tomorrow will see the publication of the long-term investment strategy for flood defence as
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part of a sequence of steps that we are taking. On Monday, we made an announcement about the help that we are giving coastal communities to prepare them for adapting to the impact of coastal erosion. It is right that the next stage should be to ask what we shall need to spend to continue to protect people from flooding, given the information in today’s projections.

Mr. Peter Lilley (Hitchin and Harpenden) (Con): I am extremely grateful to you for calling me, Mr. Deputy Speaker. The Secretary of State will know that, as a physicist, I do not dispute the physics of global warming—that a doubling of carbon dioxide concentrations will produce, of itself, about a 1° rise in global temperatures. The cause for concern is the assumption in the models, to which my hon. Friend the Member for Chichester (Mr. Tyrie) referred, that positive feedbacks will amplify the effects. Given that the models did not forecast the decade of stability, or slight decline, in world temperatures, have they been modified in the light of those facts? Are not the projections lower than they would have been if they had been made a decade ago when we had not seen the stability and the huge increase of CO2 that none the less occurred, or is the Secretary of State’s attitude the same as that of Hegel who, when told that his theories were refuted by the facts, replied:

Hilary Benn: I would not make any such claim. I am not a physicist, but I will ask scientists at the Met Office Hadley Centre to respond to the right hon. Gentleman’s point. I know from talking to them that they have done their work with care and thoroughness. They have brought together a range of models and they are very open and honest about the uncertainties—it is important to be aware of them—as the results are presented. Equally, however, there is not much doubt about the direction in which we are heading, which is the direction for which we have to plan.

bill presented

Motor Vehicle (Climate Change Information)

Presentation and First Reading (Standing Order No. 57)

Colin Challen presented a Bill to make provision for the display of climate change information in motor vehicle advertising and registration documents.

Bill read the First time; to be read a Second time on Friday 26 June, and to be printed (Bill 114).

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Preparing Britain’s Economy for the Future

Topical debate

1.12 pm

The Economic Secretary to the Treasury (Ian Pearson): I beg to move,

Nobody in the country today needs reminding of the difficult times the world economy currently faces. It is a hard truth that the global economy has contracted for the first time since the second world war. Output in the UK has fallen over the last three quarters by 4.1 per cent. and by 3 per cent. in the US, 5 per cent. in Italy, 6.9 per cent. in Germany and 9.1 per cent. in Japan—grim statistics indeed. Now is a time for action, a time for tough decisions. Moreover, it is a time to take decisions for the long term as well to respond to the immediate problems. That is why today’s topical debate is so important.

Of course, the No. 1 priority has been to deal with the immediate problems, ensuring that the downturn is as short and shallow as possible. This means responding in particular to the threat to the economy posed by the banking crisis, but it also means taking steps to mitigate the impacts on real people—on those who may have lost their job or been unable to find their first one, on those worried about their financial circumstances and their savings, or on those perhaps having trouble paying their mortgages or getting on the housing ladder. The longer-term challenge is no less important. That means preparing for the upswing to ensure that we have a sustained recovery and make the most of the UK economy’s underlying strengths.

Mr. Philip Hollobone (Kettering) (Con): Given the Minister’s remarks on helping people through the worst of the downturn, will he take this opportunity to congratulate Kettering borough council, of which I am a member, on hosting not only what it called a “credit crunch summit” that brought many local agencies together to see how best to help local people, but a jobs fair, which was attended yesterday by 300 local people trying to find out more about the local employment opportunities available as well as by a Minister from the Department for Communities and Local Government? Are not such local initiatives really important in helping local people through the worst effects of the economic recession?

Ian Pearson: I certainly applaud local initiatives such as those in the hon. Gentleman’s Kettering constituency. I believe local authorities can play a great role and that local activism is essential, just as I believe that the Government must be active to help people and businesses through these difficult times.

I want to emphasise the longer-term challenge and the actions we are taking to prepare the UK for the upswing. Although there is more to be done overseas and at home, recovery will come. As the Chancellor said in his Mansion House speech yesterday, there is growing evidence that the steps taken at home and internationally are stabilising the banking system and supporting our economies. We expect the UK economy to return to growth around the turn of the year, and we are confident about the British economy in the medium term, but we
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are not complacent. We must recognise the numerous risks that could threaten both a recovery in the short term and sustainable growth in the future.

We have taken steps in the UK to support the cash-flow, credit and capital needs of businesses. Banks have been recapitalised and steps have been taken to unstick wholesale markets. The enterprise finance guarantee and the working capital scheme are helping to ease the strain of the downturn, and banks are now committed to lending more. We have started to see conditions improve. At the same time, HMRC’s business payment support service is allowing firms to spread tax payments over a longer and more affordable timetable.

As of 14 June, more than 149,000 agreements had been reached with businesses, worth £2.6 billion of tax. In the automotive industry, for instance, the vehicle scrappage scheme is providing a temporary and welcome boost to the industry at a difficult time. Figures released this month show that more than 60,000 new cars have already been ordered since the scheme was announced—and this is only part of a wider package of support for motor industry.

Mr. Alan Reid (Argyll and Bute) (LD): Looking to the longer term, is the Minister concerned that when the economy starts to pick up again, we might run the risk of inflation? One lesson from the past is that the Bank of England should be instructed to take house prices into account when setting interest rates. It has not done so in the past, and we have seen low interest rates in the good times leading to house price rises, while in the bad times we have seen interest rates too high. Will the Minister instruct the Bank of England to take house prices into account when setting interest rates in future?

Ian Pearson: We have a very effective inflation-targeting regime. As the hon. Gentleman knows, the Bank of England was set up to be independent by the Government and it has a clear remit to bear down on inflation. We see no risks to inflation in the short or medium term, but these are matters for the Bank of England.

We are taking important action now to help business through these tough times. At the heart of our strategy for tackling the economic downturn is our ambition to build for the years ahead, which is where I want to focus my comments.

It has been my great privilege as a member of the Government to see from all angles both the challenges we face and the strengths we have as a country. As Minister for Trade, I saw how the UK was respected and trusted around the world for its openness and sense of fair play. I saw how China and India were already transforming the global economy and know how they will become even more prominent in the decades ahead. That highlights the central importance of our need strategically to partner with them in future.

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