Sustainable development and aspects of Defra's structural reform plan

CORRECTED TRANSCRIPT OF ORAL EVIDENCE    To be published as HC 576

House of commons

oral EVIDENCE

TAKEN BEFORE THE

Environmental Audit Committee

Sustainable Development and aspects of

Defra’s Structural Reform Plan  

WEDNESDAY 10 November 2010

Mr Michael Anderson and the Rt Hon mrs Caroline Spelman

Evidence heard in  Public Questions  1 - 72

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the  Environmental Audit Committee

on  Wednesday 10 November 2010

Members present:

Joan Walley (Chair)

Peter Aldous

Martin Caton

Katy Clark

Zac Goldsmith

Simon Kirby

Mark Lazarowicz

Caroline Lucas

Sheryll Murray

Caroline Nokes

Mr Mark Spencer

Dr Alan Whitehead

Simon Wright

________________

Examination of Witnesses

Witnesses:  Mr Michael Anderson, Director General, Strategy, Finance, Performance and Evidence Group, Department for Environment, Food and Rural Affairs, and Rt Hon Mrs Caroline Spelman, Secretary of State for Environment, Food and Rural Affairs, gave evidence.

Q1 Chair: May I welcome you, Secretary of State? We are really pleased that we have this opportunity to have you before the Environmental Audit Select Committee, with perhaps the first opportunity to congratulate you on your huge responsibilities that you have. We certainly look forward to working with you and to understanding what the implications are of the changed landscape. I think that this session is the first one to do that, but I understand that you would like to make a brief statement. I am going to say to all Committee members that because we have had the vote and the instruction, I do think it will be the case that the shorter the questions and the shorter the responses the more likely we can get through the business. And, of course, we welcome Mike Anderson back to the Committee.

Mr Anderson: Thank you, Chair.

Chair: So over to you, Secretary of State.

M r s Spelman: Thank you very much, Chair. First, I would like to say how much I welcome this inquiry. It’s an excellent example, I think, of how Parliament can hold Government to account on sustainable development, and I would like to thank the Environmental Audit Committee for their prompt willingness to scrutinise on this issue.

The coalition is committed to being the greenest Government ever. Sustainability runs through the heart of our structural reform plan, published as a business plan yesterday. I think it’s worth just mentioning that the three priorities that we have chosen in this business plan all have at their heart sustainability: first, to support and develop British farming and encourage sustainable food production; secondly, to help to enhance the environment and biodiversity to improve the quality of life; and, thirdly, to support a strong and sustainable green economy, resilient to climate change. But I would also like to take the opportunity to thank the staff and commissioners, both past and present-and present here today, I think-of the Sustainable Development Commission. Without their hard work and dedication, sustainable development would not be as high up the agenda as it is today. I am committed to taking sustainability forward at home and abroad. Thank you.

Q2 Chair: Right. Well, we welcome that. Just before we get into the depth of our questioning, there was one issue that the Committee did want to raise with you. Before the general election, a report was done on air pollution and air quality. We are very grateful to you for the letter that you sent saying that we will have a report and Government response from you very shortly. But we are concerned about the way in which air pollution is contributing to up to 50,000 deaths per year and the effect that poor air quality has in respect of shortening life expectancy across the UK. We just wondered if perhaps you could give us an indication of when we might get the Government response to that.

M r s Spelman: Well, very shortly. But could I just stress how much importance I attach to this issue? One of the very first meetings I held with representatives of the European Commission was, in fact, with Commissioner Potočnik and I raised with him the problems the Commission themselves are having with the air quality directive. The situation in the European Union is that 26 out of 27 member states are not compliant-a very difficult situation indeed. I spontaneously raised that with him because, collectively as legislators, we have to find a way to work to improve air quality. A lot of this is related to the technology of the internal combustion engine. So it is as much an appeal, in fact, to our own entrepreneurs and our technical experts to find ways of reducing pollution in the earth’s atmosphere. But it is something that I spontaneously sought to raise with Commissioner Potočnik and he is very alert to this issue. I am sure I am not alone among Environment Ministers in doing that. The position with the actual report is it is gaining clearance through the Home Affairs Cabinet Committee, which I believe will be imminent and, as I think you mentioned, I have written to you to apologise for the slight delay.

Q3 Chair: Okay, we look forward to taking that further. To go back to the way in which we are able to embed sustainable development into everything that Government do. We are very grateful to have had the copy of the action plan. We haven’t perhaps had a chance to look at it in full detail yet, but I was wondering what there is that is new in that about how you’re expecting things to be taken forward in a new way.

M r s Spelman: Well, you must forgive me because I wasn’t in government and I wasn’t doing this brief in opposition, so obviously I have come to this completely as a new broom. I take the view that Defra is a Department that should lead the drive for sustainability across Government. I think the key to doing that is embedding sustainability in every Department’s business plan. I’m very pleased to be able to tell the Select Committee today that Mr Letwin, a Minister at the Cabinet Office, has agreed to sustainable development proof every Department’s business plan. Hopefully, that is something that will give some reassurance to Committee members that we are very serious about making sure that every Department does take account of this.

I am sure, Chair, that you’ve mentioned to Select Committee members that very early on in my sojourn I invited you in to have a talk to me about our plan to abolish the Sustainable Development Commission and to embed sustainability at the heart of the Government’s business. I suggested at the time two ways that we might do this and, in fact, something we could do in partnership together as Parliament and Government. As far as Government are concerned, Defra is leading the way as a Department on this issue; but obviously the Cabinet Office, in having a cross-cutting role across Government, can help strengthen that across all Government Departments. I very much hope that the Environmental Audit Committee will take the opportunity to take on an auditing function to make sure that, much as I appear before you today, you bring other Secretaries of State before you to question them on the progress they are making towards sustainable development.

Q4 Chair: Do I take it then that although the letter that we’ve had from you yesterday that suggests to us that it might be appropriate for us to work out with the National Audit Office how to take this further forward, you don’t envisage anyone else other than the Environmental Audit Select Committee having that auditing role?

M r s Spelman: No, I think you’re ideally placed to do it and, if I may pay you the compliment-in definition it’s in your title-you are an Audit Select Committee. When we discussed this item I was very mindful of the fact that it takes resources to undertake auditing. I’m very receptive to the point that you raised with me. I don’t know the outcome of the discussions that you had with the Chairman of the Public Accounts Committee, but we did, in passing, discuss the possibility that, through her good offices, some of the resources of the National Audit Office might be placed at your disposal to assist with your auditing role. I’m very conscious that I have to keep a distinction between a body that is a governmental body, over which I do have some jurisdiction-my own Department working through the Cabinet Office and other Departments-but, of course, Select Committees are the domain of Parliament. As a parliamentarian, it’s not for me to suggest to you how you should undertake this role. But I do think that this Committee is ideally placed to do it.

Q5 Chair: I think, in response to that, there’s obviously an issue about resources-the resources that are available to the National Audit Office and the resources that are currently available to the Sustainable Development Commission and I don’t think that now is the time to have a detailed discussion about all of that. But I think it’s important that we do put on the record that if we are to oversee that scrutiny role, it is vital that, somehow or other, there are the resources available for us to do it.

M r s Spelman: I completely agree with you, Chair. I believe the National Audit Office employs 700 full-time equivalent posts. I can’t help feeling a few of those could possibly be placed at the disposal of this Committee to undertake this important work.

Chair: I think there is a difference between what Parliament does and what Government does. Right, I think Mr Caton wanted to come in just briefly on the devolved administrations.

M r s Spelman: Yes.

Q6 Martin Caton: Last week, Mr Anderson gave us evidence and told us that your decision to withdraw funding from the Sustainable Development Commission was made without consulting the devolved Administrations who are, of course, your co-owners of the SDC. Why didn’t you consult them?

Mr Anderson: Well, what we said was that we informed them that we were withdrawing funding and then consulted on what the future of the SDC is. That was the distinction we were trying to draw. So the withdrawing of the funding is separate from the consultation on whether or not to abolish the SDC.

Q7 Martin Caton: Yes, that is exactly what you’ve said. What I’m asking is why not consult on the principle? You have shared ownership of a body that’s fulfilling one function. Why don’t the co-owners discuss the way forward before any one of the owners makes a decision?

M r s Spelman: Well, a couple of things. I can give the Select Committee my absolute assurance that the write-round to the devolved Administrations took place before any final decision was made, and perhaps that wasn’t made crystal clear. That is, at the very least, a courtesy and, as I understand, the good practice of Government. I spoke to each one of the devolved Administration representatives personally-I remember having telephone calls with them-and neither in writing nor on the telephone did they raise a major objection to what I was proposing to do. We had subsequent discussions about this transition, because obviously it’s a long transition to the end of this financial year, and they haven’t subsequently raised issues that we hadn’t anticipated as part of this. But I can give the assurance that the formal contact was certainly made long before there was any public declaration on this point.

Q8 Martin Caton: Well, that is useful and that is new information. Do you now have any idea of or has any assessment been made of the impact on the devolved Administrations of the loss of the SDC?

M r s Spelman: General impact assessments were made on behalf of all the arm’s length body reductions that we made. Defra had over 90 arm’s length bodies when I arrived in post and we have reduced that number to just below half. Obviously, as part of the decision-making process undertaken by the Ministers at the time, in each case we asked for an assessment of the impact that this would have.

Chair: Mark Spencer?

Martin Caton: Sorry, can I just-

Chair: Sorry-

Martin Caton: Just one because-

M r s Spelman: If I could perhaps just illustrate; depending on the numbers of people who were employed and where they were located, as Mr Caton may recall, we made a conscious decision, perhaps a little different from some other Departments, to announce in three tranches our decisions to abolish or reform arm’s length bodies for a couple of reasons. One is that from a humanitarian point of view we thought it was far better for the employees concerned to know clearly what the position would be and, once we had made a clear decision, to give them then the opportunity at an early stage to seek alternative employment-to give them a head start, if you like, in that regard.

It was done for the very best of intentions and where, for example, a significant number of employees were involved-if you take the Commission for Rural Communities, for example, located in one setting in Bristol-we undertook a significant exercise of considering where we might redeploy those employees, some of them coming back into Defra. Part of our assessment involved a decision about the location, the local impact, and whether or not there were people with skills that should be repatriated to the centre of Government. All of these things were taken into account.

Q9 Martin Caton: From what you’ve said this morning about the Environmental Audit Committee basically being the only scrutiny body of your work on sustainability in future, the thing that concerns me is that what the SDC did was have a UK-wide remit. It was looking at how the UK Government was delivering, but also how the devolved Administrations were delivering. With the demise of that body there’s no one able to compare and contrast, and encourage best practice to be adopted by the other levels of Government.

M r s Spelman: But in the spirit of devolution, which is what has given rise to devolved Administrations in Scotland, Wales and Northern Ireland, I’m sure people living in those countries would feel that one of the benefits of devolution was the opportunity for them to give expression to what works best for them locally and nationally. The spirit of best practice is certainly not impeded by having those devolved structures; quite the reverse. We frequently look at the way the other nations approach the same issue as we do and we can learn from new and better ways of doing things. I don’t think the two things, frankly, are incompatible.

Q10 Martin Caton: Well, you’ve got rid of a body that was doing exactly that. That’s my point.

M r s Spelman: But does one really need a non-departmental public body to do that? I think the answer, frankly, is not.

Martin Caton: Time will tell, I guess.

Chair: Right. I think we need to move on. Mark Spencer?

Q11 Mr Spencer: Thank you, Chairman. Secretary of State, you repeated the Prime Minister’s desire to be the greenest Government ever. At the moment, those targets seem to be focused on central Government’s carbon emissions. I wonder if there are any plans to roll out other targets across other governmental Departments.

M r s Spelman: Well, we take the view that sustainability, of course, goes wider than just carbon emissions. Defra is the Department precisely that looks at that wider definition. In terms of sustainability we need to look at the whole range of natural resources and that is one of the reasons why one of the first things that my Department has undertaken is the launch of the discussion paper on a natural environment White Paper. We need to understand far better the wider definition of sustainability, and that is integral to that consultation document.

Q12 Mr Spencer: Can I ask how confident are you that other Government Departments are receptive to those targets and are treating them seriously?

M r s Spelman: Well, I was really looking forward to this bit of the Select Committee inquiry because my Department has undertaken a significant amount of work to scrutinise the business plans that were published on Monday. Although they’re relatively recent, I think it would be good to highlight to the Select Committee the evidence that we’ve already gleaned of sustainability being already well-embedded in the new business plans under the new Government.

For example, if we took the Department for Transport, I think it’s really important to note that in their business plan they talk about securing a sustainable railway for the future. The Chair of the Select Committee and I share a railway line to the West Midlands that is presently virtually at capacity, so it’s good to see acknowledgement in a Government Department. Even more important is the fact that despite the constraints on resources, the Department for Transport has set up a local sustainable transport fund as one of its absolute priorities. I would suggest to the Select Committee, if you are interested in doing it, that the Secretary of State for Transport would be a prime candidate to bring before you to give evidence on sustainable development.

Her Majesty’s Treasury has outlined a vision in its own business plan to rebalance and make the economy more resilient to create the conditions for sustainable growth. That is right there in the business plan. The Department for Communities and Local Government, which I used to shadow, I’m very pleased to say, in its business plan, sets out that it will have a presumption in favour of sustainable development at the heart of its reform of the planning system. The Department for Business, BIS: again, I’m very encouraged there to see as part of their structural reform plan, now business plan, the emphasis they lay upon the greening of the economy; rebalancing sectors and ensuring that economic opportunities are shared with the objective of a low carbon economy and ensuring responsible corporate behaviour as part of an approach to sustainable business-absolutely integral.

Most recently, I’m sure Select Committee members will have heard the announcement yesterday about ways in which the post office network might be made more sustainable-very important to us at Defra because post offices are such an important part of sustaining the rural economy. For DFID it hardly needs to be said that we’d expect to find in their business plan evidence that DFID’s business plan sees creating wealth and sustainable growth as going absolutely hand in hand. I lay these initial pieces of research before the Committee to whet its appetite to bring other Government Departments before it to probe them further on their own business plans, where they set out where they want to achieve sustainability in their own actions over the next few years.

Q13 Mr Spencer: Will they be setting their own hard targets or is that something that Defra will be overseeing? Because it’s how we measure it, I suppose, as we go forward; we need to be able to measure their progress. Will those Government Departments set their own targets or is that something that you’ll be observing as well?

M r s Spelman: Well, what are known as the SOGE targets-somebody told me that soggy is the correct pronunciation-will of course remain in place until next year, so all Governments have inherited a system of holding them to account. But I think it’s right, having embedded the concept of sustainability right at the heart of Government, with the objective the coalition has of being the greenest Government ever, that each of these Departments should elaborate the outcomes and the time scale by which they intend to achieve them in each of their business plans. That’s what all of us have had to do. These are tough, these business plans. They require each Department to say when a particular activity will start and by what time we expect an outcome to have been achieved. Would you like to add anything to that at all?

Chair: Well, I think I’m just conscious we have a lot of detailed questions to ask. You wanted to come in very briefly, didn’t you, Sheryll?

Q14 Sheryll Murray: Yes, just very briefly about the natural environment White Paper. At the moment your marine part of your Department looks as though it’s taking action to look after the marine environment on the one hand but issuing FEPA licences for the disposal of dredged waste and spoil into the sea, which is a potential pollutant of the marine environment. Will you be looking to address that situation?

M r s Spelman: Well, if that’s the perception that it creates, I would straight away say, of course, the things are integrated, and I’m sure Mr Benyon would give you satisfaction on that point. He is in charge of the elaboration of the natural environment White Paper, but he is also the fisheries lead within the Department. I will certainly alert him to your concerns and I’m quite sure he can write back and give you satisfaction on those points.

I would like to stress that marine is very much part of our view of sustainable development. At the negotiations in Nagoya, from which I have only recently returned, I would like to emphasise the role the UK played there in terms of securing greater protection for the marine environment; quite tough negotiations to increase the percentage of protected areas, precisely because we do know that is such an important part of sustainable development both at land and at sea.

Sheryll Murray: Thank you.

Chair: Peter Aldous?

Q15 Peter Aldous: Thank you, Madam Chairman. Secretary of State, last week your officials, Mr Anderson and his colleagues, when it came to the Sustainable Development Commission and the SOGE reports, they described them as an industry and a bureaucracy regarding the publication of their performances. What are your plans for changing reporting on sustainable development across Government?

M r s Spelman: Well, again, obviously the way things were done in the past, I cannot be accountable for. I come new to this-a new broom to this-but I obviously listen to officials and I observe the way in which previous mechanisms were working. I think there is some evidence that the way some of the action plans previously were developed was quite onerous. We’ve come forward with another action plan, which has now been approved, for driving sustainable operations and procurement across Government that we think learns from what went before and improves on that. It sets out priorities to lead by example, to be more transparent and accountable, to provide new tools for efficiency and reform, and to main-stream sustainable development across the whole of Government with good governance. They’re entirely consistent with the aims of the coalition Government and we think this will be more effective than the previous instruments.

Q16 Peter Aldous: Is there anything that particularly convinces you why that will be the case?

M r s Spelman: Well, again, I think that fundamentally one has to ask oneself, "The objective of making the whole of Government greener and more sustainable, is that more likely to be achieved by a body that is outwith Government-a non-departmental public body-or do we believe that by embedding this concept into the very heart of each Department and each Department’s business plan we will bring about those changes?" Any external body could audit the performance of Government, Department by Department, and produce very nice league tables of performance. But does it change behaviours within Departments? This, I think, is very much where the Cabinet Office comes in within Government and this is where the Select Committee comes in within Parliament, by holding each Department’s head to account.

Peter Aldous: Thank you very much.

Q17 Caroline Lucas: You said that you are going to play the lead role in driving the sustainability agenda across the whole of Government, which is quite an ambitious aspiration. I just want to probe a little bit more about how you will do that in the absence of the SDC. In answer to my colleague just now you were saying, "Is it easier to do that by having an external body or by embedding it inside each Department?" That depends entirely, obviously, on the political will of those doing the embedding in each of the Departments. It has to be said, I think, that to date that hasn’t been necessarily as visible and as evident as we would like it to be. So I suppose the first question really is, looking at the Defra part of the equation of making that happen, what level of resources will Defra itself be able to commit to achieving this when you consider that in the past the SDC had a very substantial work force, it had experts it could draw on, and that embedding in Departments is much more than just having some nice words in a departmental plan? It’s about capacity building. It’s about co-ordination. It’s about real expertise.

M r s Spelman: Absolutely. Well, within the Department we have 30 full-time equivalent posts dedicated to sustainable development-within the core of the Department. It is these individuals’ job specifically to drive forward on this agenda. But that’s not the sum total of the resources that we could put at the disposal. Obviously, Defra has a large number of economists, ecologists, environmental specialists for whom sustainable development is also a key part of their role. Hardly a policy discussion goes by without sustainability being integral to it. For us, it’s the bread and butter of what we do. It is right there as the priority in each one of our three priorities. Everybody who works at Defra has sustainable development as part of the purpose that they are there. It isn’t necessary, we feel, given our chosen priorities with sustainability central to each one of them, to rely on an external body to achieve that. That’s within Defra.

Outside Defra there’s a natural alliance, as I think Committee members would appreciate, between Departments that have a close involvement with anything to do with the environment, quite honestly. And those are quite naturally Defra, DECC and DFID and, in fact, BIS sits very close to us on this one because sustainable economic growth is integral to what BIS does. We’re the natural outriders, if you like, for this subject area. But I think what’s encouraging is that the Cabinet Office willingness to take this on, and for a Minister within the Cabinet Office to take on the task of sustainable development proofing the business plans of every Department, is what will help us, as the outriders, to ensure this occurs across the whole of Government. It is integral to the programme of work for Government.

Q18 Caroline Lucas: Does that mean, then, either that contrary to the cuts that your Department is facing you’re somehow going to be able to take on more people to be able to do this, or that people who were doing other things in Defra before you abolished the SDC will now be diverted? Presumably they weren’t sitting around with their paperclips; they were all busy doing other things. If they’re going to have to take up some of the slack that has now been created by the demise of the SDC, what will they not be doing to give them the real time that they’re going to need to do this job properly?

M r s Spelman: Well, the consequence of Ministers having chosen three priorities means, by definition, there are some things that we aren’t going to prioritise. Making choices is part of what determines the work pattern for the staff. Sustainability is integral to each of our three chosen priorities. In terms of the resources at Defra, we have obviously had to take a significant reduction in our resources. In our negotiations with the Treasury, we sought to protect our capital, particularly our flood capital-for all the reasons that will be fully appreciated by members of the Select Committee, I’m sure. There are back office functions in HR, IT and procurement where we can make significant savings. But as regards the focus of the policy teams and our economists, our priorities drive sustainability as an absolutely vital part of their day-to-day activity. I think Mike, as the Director General, should have the opportunity here to comment on the management of the work force.

Caroline Lucas: Well, we did have that discussion with him last week.

Mr Anderson: We talked about that last week when I said the same thing.

Q19 Caroline Lucas: What I sought to get to is the idea that the SDC, whatever one’s judgment of the quality of what they were doing, spent an awful lot of time and a lot of people and a lot of hours trying to embed sustainable development in Government.

M r s Spelman: Yes, and it was successful.

Caroline Lucas: With the SDC gone, I am not convinced about, even with more of the prioritisation that you’re describing, at the same time as your Department is taking the second largest hit in terms of overall cuts, how you’re going to have the resources to actively pursue that. You talk about Cabinet. Maybe I can ask you some specific questions on the Cabinet.

M r s Spelman: Could I just answer that one, because sometimes when you add questions it gets harder for the respondent to remember all the parts of the questions that went before.

I think the hon. Lady needs not to confuse the amount of resources with the process of prioritisation and the outcomes. It’s a crude message that says, "If I spend ever more money I am more likely to achieve my outcome". We all know it doesn’t work like that, and the process of prioritisation is the thing that brings about the focus within any organisation to produce the better outcome. We have chosen to focus on three priorities, all of which have sustainability absolutely at their heart, and we have 30 people within Defra dedicated to helping us achieve that; aside from all the other people who have critical roles-as economists, environmentalists-to make sure that sustainable development, what we have set against time scales, can be achieved.

Q20 Caroline Lucas: But I would also argue that it’s a crude message to say that it’s very easy to do more with substantially less unless there are much more concrete ideas about how to do that. I still don’t understand how these 30 Defra staff are suddenly going to be able to make space in their time scales to be able to put the resources into it. That’s a statement, not a question. But if I can move to my last question because it’s important to move on.

M r s Spelman: Well, I think it’s a bit unfair to make a statement and then not give me a chance to respond.

Caroline Lucas: Well, I confirm my belief that-

Chair: I do think we-

Caroline Lucas: Can I ask you a specific question on the Cabinet? The Cabinet question is simply-

Chair: I think we need to move on because we have a lot of people wanting to come in on this question.

Q21 Caroline Lucas: Will you be creating a Cabinet Committee? You’ve talked about Oliver Letwin’s role in sustainable development proofing every Department’s business plan. Does that involve a full Cabinet Committee or is that Oliver Letwin doing that?

M r s Spelman: Yes, I had a discussion with the Deputy Prime Minister last week and I don’t think anyone would doubt that the leaders of either of the two parties, either Conservative or Liberal, had anything other than green credentials. I will be talking to the Deputy Prime Minister about the role that the Home Affairs Committee can play in helping us look at achieving sustainability right across Government. To his credit, if I may just report this, at the launch of the business plans at the Foreign and Commonwealth Office on Monday morning, the Deputy Prime Minister spontaneously highlighted sustainability as a key part of what the coalition Government want to achieve, given expression through the business plans that were being presented to the public on that day.

Q22 Zac Goldsmith: Secretary of State, connected I suppose to the previous question, at the recent Nagoya summit from which you’ve just returned, Globe submitted proposals for ensuring that natural capital is taken into account at every single level of Government. Its principal proposal was that that needs to happen within Finance Departments before anything else, their rationale being that unless the Treasury engages or is forced to engage in these issues it will remain a block, as I think most people accept it was for the last decade. I would love to hear your response to the Globe proposals if you’ve had a chance to consider them.

M r s Spelman: Well, I’m very pleased to report that the Treasury are very receptive to the natural capital argument. That is integral to their view in their business plan of achieving sustainable economic growth. I’m very proud of the fact that Defra was one of the part sponsors of a study on the economics of ecosystems and biodiversity, which has gained a lot of credibility among Finance Departments round the world, because for the very first time what it demonstrates to Finance Ministers are that the services that nature provides for free, hitherto, do have a value attached to them. When I spoke at an event in Nagoya at which Globe were present, I said that the value of bees to the UK economy is calculated to be £440 million a year because if they didn’t exist that’s what it would cost to replace the functions that they undertake. I think there’s no doubt that Defra has put its commitment in the evolution of this study, the tool that Finance Ministers can use in every Treasury around the world in order to value ecosystems. Our own Treasury has shown its willingness to embrace this view, because it’s the true cost of nature. The importance of Nagoya, I think, is the ground-breaking agreement that, for the very first time, shows that all the signatories, nearly 200 countries in the world, accept there is a true cost to biodiversity; that what we have taken for granted we can no longer take for granted as it’s endangered. That is the message that has gone out round the world and that we have signed up to with the full knowledge and support of the Treasury as part of the Government.

Q23 Zac Goldsmith: That is fantastic news to hear. I didn’t realise that the Treasury was so engaged in this. In terms of time scale, at what point do you imagine that decisions approved or taken by the Treasury will take into account these true costs, these true values that you’ve been talking about? What is the process and how long is it likely to take before the tool is developed?

Mr Anderson: Mr Goldsmith asked last week about when the national ecosystem assessment would be published exactly, which is connected to natural capital, and I said it was 2011. But now the business plan is out, it’s connected also to the natural environment White Paper publication. Spring next year is when these two documents, broadly in parallel, will need to be put out about what our overall approach will be. You are then into, of course, the bureaucratic processes of how in Whitehall we can convert that into real activity that genuinely measures, through the green book or any other way, the natural value of what we’re talking about. This will take time.

Q24 Zac Goldsmith: And that’s Defra-driven, initially?

Mr Anderson: Well, it’s Defra-driven initially in terms of the theology of the White Paper and the national ecosystem assessment, but the Treasury are already engaging with that with us, as you would expect, because they’re deeply interested in it as a subject. It’s Defra-driven, but with the Treasury.

Q25 Zac Goldsmith: Can I ask one very quick question? Is there anyone in the Treasury who has taken a particular interest in this issue of natural capital, someone that we might want to talk to on the subject?

M r s Spelman: Well, the Chancellor himself. I was very encouraged in preparing to go to Nagoya by the support that I received and the welcome that I had upon my return. I think the important thing is that the Treasury are leading to introduce connected sustainability reporting by 201112, what they call "accounting for sustainability". This, again, would be a very good reason to have a Treasury Minister before the Environmental Audit Select Committee, precisely to press the Treasury on their plans in this area. But on the tools for enabling us to do this, we’re proud of the fact that Defra has been associated with developing the tools that allow a Finance Department to calculate the benefit to the economy and to demonstrate to the taxpayer the benefit of assessing the value of natural capital as part of our economy.

If I could just add one other thing, just to pay tribute to what Globe did at Nagoya, because by bringing a number of leading politicians, including the hon. Member Brent North, from the UK Parliament out to Nagoya, it did help strengthen a process that ultimately gave rise to an agreement-a multilateral agreement-when many people thought it would not be possible to achieve that.

Q26 Sheryll Murray: The impact and input indicators in your business plan are mostly aimed at agriculture operations. What does this say about the importance Defra assigns to the environmental protection compared to its agricultural duties?

M r s Spelman: I wouldn’t accept that it’s predominantly aimed at agriculture. One of the three priorities specifically mentions agriculture by name, but the other two priorities are much wider. The second priority is to enhance the environmental biodiversity and to improve the quality of life. It couldn’t be wider than that. That’s for all of us in all parts of our economy and society. The third priority, of course, is to support a strong and green economy, resilient to climate change. But Defra does have specific responsibility for agriculture and fishing as two really important industries, and we have put them into our No. 1 priority based on the scientific evidence. Professor Sir John Beddington, the Government’s chief scientist, has undertaken a piece of analysis that makes sobering reading. He has warned us as a Government that by 2030 we face a situation where we will see the coincidence of a shortage of water, a shortage of energy and that will lead to a shortage of food, be that fish, meat, veg, whatever. We have a responsibility, therefore, as a Government to respond to what he calls the "perfect storm" scenario. That is one of the reasons why we have made it a No. 1 priority. We have to prepare our industries for the scale of that challenge and to fail to do so would be a dereliction of our duty.

Q27 Sheryll Murray: How will the overall impacts of a range of policies on crosscutting themes such as sustainable development be measured? In your business plan you’ve focused on specific policies for individual Departments. Within your Department, how will you measure the crosscutting sustainable development across those various Departments?

M r s Spelman: Well, the Department has to respond to its own set objectives in the business plan to start and finish by the times that are our best assessment of when we can achieve these things by. It is broken down by responsibilities and by specific outcomes that we want to achieve. But, collectively, our success as a Department will be judged by the sum of the total, obviously. In the transparency, it will be apparent to you and to everyone where we are falling short-if we are falling short-or where we’re doing better than we originally hoped for. That is the complete transparency of the business plan. Mike, do you want to add anything?

Mr Anderson: Well, it takes us back to the issue of the well-being indicators we briefly discussed last week. I think this is still to be developed because we have to try and measure in some way going beyond these plans. The Prime Minister and the Cabinet Secretary, as I said I think last week, is chairing the meetings that are going to take place on that. But that is not an easy position to reach in terms of indicators for how you are measuring sustainable development across the whole of Government. Defra has done a huge amount of work on that before, with the 68 sustainable development indicators. But we need to turn that into something that can mirror the business plans that we have now that are easily understandable by the public and are demonstrating our accountability as a collective Government for the things that we’re trying to do across all the plans. But that is a work in progress, yes.

M r s Spelman: Obviously, if I could just add to that, of course other Departments do place requirements on us as part of the Government’s overall objective of achieving sustainable development. The 10% target, for example, on reducing our carbon footprint is a challenging one. Every Department has to contribute to achieving that target. Again, transparency will apply. You will be able to see how successful or otherwise Departments are in delivering on those agreed objectives. We have our own objectives set out in our plan, but we’re affected by objectives of other Departments of which we’re part of the collective. And we are, too, dependent, in our business plan, upon other Departments for the achievement of some of our own objectives. That’s the essence of Government.

Q28 Sheryll Murray: I take it, then, that you’re still working on how you’re going to measure well-being, and you’re also looking at how you’re going to collect the views of the public once you’ve published all the information with greater transparency?

M r s Spelman: Well-being is a wider criterion. I don’t think we’re the lead Department on well-being.

Mr Anderson: It’s a collective of Government statisticians and economists and, as I said, the Cabinet Secretary has taken a personal interest in this. So we are, again, the intellectual force behind it, with the SDC work that was done over the years with us. But that will be turned into a bigger central exercise, I think.

Sheryll Murray: Thank you very much.

Q29 Chair: Just before we move on, could you perhaps indicate how you will have the arrangement to discuss with NGOs and other people, who you obviously recognise as important partners in all of this? Do you have a procedure or mechanism for that?

M r s Spelman: Yes. Defra has a very large stakeholder group and we have sought, throughout the difficult process of preparing our budget and our structural reform plan, to consult with our stakeholders. We’ve held more than one event within the Department where we’ve sought the views of stakeholders as they’re a very important part of the Defra family. That is true in relation to the decisions that we made on arm’s length bodies and on structural reform plans as well as, at the very first opportunity, sharing our strategic decision making in relation to the Budget.

No sooner had the Chancellor sat down in Parliament-I don’t think he had even sat down, maybe he had just about sat down-at 2 pm on 20 October 20, we had our first groups of stakeholders into the Department and again at 4 o’clock for the NGOs, to share with them our strategic decisions to reduce the number of arm’s length bodies, to reduce our expenditure in terms of resources in order to protect our capital, particularly our flood capital, and we gave them ample opportunity on that occasion to question those decisions.

Q30 Chair: But is that a one-off arrangement or is that something that is going to be embedded?

M r s Spelman: I’ve only been there, with respect, for not quite six months. But I would imagine, since we’ve met three times in the last six months, there will be many more occasions in the next six months when we will be meeting. We’re very fortunate in having a very strong group of NGOs-household names, international names-with strong views, and many members and good ideas for how to drive forward our agenda. We remain open and receptive to our stakeholder group for their suggestions. I imagine some of them are listening to that today. So that will be a standing invitation for stakeholders to have meetings with us.

Q31 Katy Clark: The UN is organising an Earth summit in 2012.

M r s Spelman: Rio.

Katy Clark: I understand it is being called Rio+20. What do you think a successful summit would look like?

M r s Spelman: Well, it’s interesting. It’s an interesting question from the hon. Lady. One of the consequences of Nagoya is that agreement on access and benefitsharing has, happily, been agreed. Before I went to Nagoya I think that quite a few people internationally felt that it might be just too difficult to achieve an access and benefitsharing agreement as soon as this year. We worked particularly closely with the Brazilians in the runup to Nagoya. For them, access and benefitsharing was a very important part of a package of measures that they wanted to see achieved, and I think they felt that if agreement had not been achieved in Nagoya, they would have been very keen to try and secure that at Rio+20. But that now opens the way for other things to be discussed and I know that the Brazilians, in particular, are keen to discuss two things: a green economy in the context of sustainable development, and poverty eradication.

Now, they are the hosts. They’re not the only people who will decide the subject matter for the Rio summit, and there were quite diverse views among different countries as to what should be debated and discussed at Nagoya. I can give the Committee a flavour of this and they will see what I mean. At the panel meeting in New York on 19 September, which was where the possible themes for Rio+20 were being discussed, it was interesting, perhaps not surprising, that President Zuma from South Africa wanted the focus on poverty. The United States would like the focus on fragile States. Australia and Japan would both like the focus on climate change. So there are really diverse views at this point.

But I think here that the UK can really have a strong leadership role. When I came to the Department, I observed that we had three separate international conferences around the globe this autumn. We had the Millennium Development Goal summit in New York in September, followed by the Biodiversity Convention in Nagoya in October, and soon to be followed by the Climate Change Convention in Cancun. That is three separate conferences of separate groups of people; whereas to my mind these things are inextricably linked-climate change has a devastating effect on the world’s poorest people. Unless we mitigate and adapt for climate change, these people will be even worse off.

Biodiversity is adversely affected by climate change. We should be joining those three things up and, in practical terms as a Government, we sought to achieve that by having a shared team of officials attend all three conferences. That worked incredibly well for us as we demonstrated that joinedup thinking. I think with the good relations that we have developed with countries like Brazil we may well be able to assist Brazil in getting a good agreement among the diverse opinions for what should be the focus of Rio+20. We’ve offered help to Brazil to help them achieve that, because 2012 is coming round quite quickly.

Q32 Katy Clark: So have you said yet what you think the focus should be.

M r s Spelman: Well, my own view is that we should seek to join up the questions of climate change, biodiversity and poverty. We should seek to link them. I think if we do that it’s possible to use resources much more effectively as well. I’m sure that the members of the Select Committee will know that in Nagoya, the day before the high-level segment of the negotiations in Nagoya, we had a day devoted to REDD+. That is something normally that would be a DECC lead but, as part of our joinedup working together, by agreement with DECC, I represented the Government in the discussions on REDD+. With the generosity of DFID, I was able to bring £100 million of new money to the table as part of the REDD+ day in Nagoya. My point being, in introducing the new money on to the table, that the use of those new resources on forest biodiversity could also help alleviate poverty and arrest the negative impact of climate change. I think it should be possible to see more of that done. It was very warmly received in the way that it was presented.

Q33 Katy Clark: We’ve been given a copy of the questionnaire, which I think has been sent to all member states ahead of the summit. One of the questions that they’ve asked was how the British Government would evaluate the British Government’s political commitment today compared to-

M r s Spelman: I didn’t quite hear, "political commitment"?

Katy Clark: Yes, sorry, political commitment today to sustainable development compared with in 1992. Basically, compared with 20 years ago, how would Britain evaluate the political commitment to sustainable development?

M r s Spelman: Well, I think it’s much greater today than it was then because we understand it better. If we think back to 1992, there were a number of things that were not well understood, and now it is understood that economic growth needs to be sustainable. That is not in dispute. I think it’s central to the question of why the Sustainable Development Commission is being abolished, because sustainable development is now mainstream and that is a tremendous achievement. If I look across the piece at the arm’s length bodies that Defra had, some of them dating back to the 1960s, my observation as a new Secretary of State is that down the decades successive Governments often deal with a new issue by setting up an arm’s length body, a quango or sometimes even passing a law. But over time often those issues that are at arm’s length become mainstream and then the question is whether we still need to have the arm’s length body. If you take the example of another of the arm’s length bodies that we abolished-the Royal Commission on Environmental Protection; it was set up, I think, three decades ago, at a time when environmental protection was quite a new issue. Environmental protection is something nobody would argue with the need for today. So part of this exercise was acknowledging the progress that we’ve made. It’s a rather long-winded answer to the UN questionnaire, but I guess you’re asking it because it’s in the context of the Sustainable Development Commission decision.

Q34 Katy Clark: The deadline was 31 October for Britain submitting that questionnaire. So is that basically what the British response was to that question?

Mr Anderson: Yes, and this is very much a working-level official document. This is right at the lowest level, brutally, of our system to feed into another system that feeds into another system-the Secretary of State’s opportunity to give the real vision that she has coming down the track. This is the beginning of their evidence-gathering exercise, so this is an official working-level document which we’re happy-

Q35 Chair: Is that something that you could share with the Committee-the response that’s gone in-so that we could get a flavour of how things have changed?

Mr Anderson: I think we’ll look at that, Chair, yes. We’ll look at that, Chair. I don’t see why not, but we’ll look at it. Yes.

Q36 Katy Clark: That’s helpful. One of the things that we’ve been told is that one of the themes at Rio might be institutional framework for sustainable development. I know that you spoke earlier about the various themes that are under discussion. If that is one of the themes, the institutional framework, how do you think other states are going to look at the recent decision on the Sustainable Development Commission? Do you think what Britain is doing is similar to what’s happening in other countries, or do you think that people will be aghast at Britain’s decision?

M r s Spelman: Well, at the risk of being a tiny bit flippant, on my way back from Japan I called in via China and I had very productive discussions with some senior Chinese Ministers. The concept of an arm’s length body is something quite different in a country like China. So I think we have to respect the different governance in different countries. They’re not configured in the way we are. Among European countries there’s a very similar pattern of the mainstreaming of these important issues. I have good working relationships with a number of European Environment Ministers, particularly those who took the trouble to go out to Nagoya and shouldered the load of negotiation. We found that we do operate in similar ways.

There’s one other thing I would like to mention in response to the questionnaire, because it relates to something that the Chair of the Select Committee asked me a moment ago about the involvement of stakeholders. There was a separate questionnaire attached for stakeholders, but we made a conscious choice to include a contribution from UK stakeholder members in our own submission. Again, I think that’s recognition-I think it’s globally recognised-that we have a very strong stakeholder group in the UK that has a powerful voice, not just nationally or in European terms but internationally, and getting their voice heard as part of our response to this questionnaire was part of our objective.

Q37 Katy Clark: You’ve mentioned other countries. Which Governments of which countries do you think we can learn most from in terms of how they’ve embedded sustainable development in their policies and operations and are there some that you are looking at in particular?

M r s Spelman: As I explained, I think it’s integral to European thinking as evidenced by the unanimity with which the Environment Ministers at the informal Environment Council in Luxembourg, before Nagoya, demonstrated their absolute commitment to strive for agreement in Nagoya. It was incredibly powerful-a unanimous view among those Environment Ministers that I think really enabled for Commissioner Potočnik a very strong position to go and negotiate with. We provided him with an absolute assurance that we were committed to seeking agreement, and that we were prepared to be flexible in those negotiations and to bring new resources to those negotiations as part of demonstrating Europe’s commitment and attachment to sustainability in achieving protection for biodiversity. I think among European countries we can be confident that it is integral.

But the big challenge for the world, I think, is looking at the emerging economies and looking at their adaptation and their ability to absorb the importance of sustainable economic growth. If we take China, for example-I spent a little bit of time there-because it really is important on this question; China has virtually 20% of the world’s population but only 7% of the world’s water resources and it’s heading to 50% to 60% of our carbon emissions. We really need to help a country like China with the challenge of reducing its carbon footprint while achieving a sustainable rate of economic growth. Brazil, I think, is another country-a strong emerging economy with strong growth rates and some of the world’s most precious genetic resources-that is very conscious of its need to have sustainable development absolutely at the heart of its decision making.

Q38 Katy Clark: The question I was asking was what we should be doing in terms of what we can take from other countries? Do you think there are European countries that we should be looking to, given that they are perhaps quite similar?

M r s Spelman: We are still a very rich nation and I think in terms of us giving to other countries to help them with this. I think that we need to be doing the very best that we can-importing best practice from developed countries that have embedded sustainability at the heart of what they do-but we should also be generous with our resources and our know-how in helping some of these large developing countries, especially the poorer ones, embed sustainability at the heart of what they do, because it’s one globe. We could all strive and strain to reduce our carbon footprint, but unless we help China reduce its carbon footprint we face real difficulties.

I think there is a willingness among Environment Ministers round the world to work together in this area-I found the Brazilian Environment Minister great to work with in the international community-to break down this concept that there is some sort of divide between developed and developing countries. To give expression to that, the Brazilian Environment Minister and I launched, in the margins of Nagoya, a study called "Everything is Connected", a series of essays from Brazilian and British academics, precisely about how climate and biodiversity are connected in the fragile world, as a demonstration that developed and developing countries can achieve more together if they work together than if they blame each other for the shortcomings of what has gone before and the present day.

Mr Anderson: Chair, can I clarify, because there will be confusion otherwise if I don’t, in relation to Ms Clark’s question on governance. The international community will not spend any time on our internal domestic governance. They will be looking at a big UN body or not a big UN body in relation to it. Those are the views that they’ll be collecting. When we look at that question, on that bit of it, that’s the question they’ll be asking us: should you have a supranational huge-

Q39 Katy Clark: But that wasn’t quite what I asked the Minister.

Mr Anderson: No, but that’s what they’re asking in that questionnaire.

Katy Clark: I think she’s answered very fully.

Mrs Spelman: I hope I answered it. I should have explained that this-

Chair: I think we’re in danger of running out of time for other questions that I know other members wish to ask and I know that-

Mrs Spelman: Only very, very briefly. I just wanted to mention that that was made possible through a Defra scheme called SAIN, which is one of the things we do for sustainable development dialogues with Brazil, China, India, Mexico and South Africa. The hon. Lady asked me for the countries we were working with.

Chair: I think that Zac Goldsmith had a question on the point we were just covering.

Q40 Zac Goldsmith: I absolutely agree with everything that we’ve just heard, particularly in relation to our role on the international stage. What kind of dialogue you’ve had with the Department for International Development in terms of encouraging a shift in emphasis in terms of aid funding towards tackling environmental causes of poverty?

M r s Spelman: Well, hopefully, not only a conversation but putting their money where their mouth is, in that the Secretary of State for International Development not only readily acceded to my suggestion that, as three Departments, we might work together across all three of these conferences to bring the linkage between poverty alleviation, mitigating and adapting climate change and enhancing biodiversity. But the fact that he provided £100 million of resources out of his budget for me to take to Nagoya couldn’t be a stronger demonstration of his commitment in this area.

If the figure is correct, I think the coalition Government have agreed, as part of the spending review, to make £2.9 billion available for international climate change finance. I think, without giving away too many secrets, the Secretary of State for International Development says that the kind of resource allocation that he committed to at Nagoya was in the direction of travel that he would like to see more of. I think we are completely aligned at DECC, DFID and Defra in seeing that with our resources, our know-how and our influence, we can achieve more if we work together to alleviate poverty at the same time as tackling climate change and biodiversity.

Chair: Right, I want to make a plea, please, for slightly shorter replies, if I may, Secretary of State. I know that Caroline Nokes now wishes to come in.

Q41 Caroline Nokes: Thanks, Chairman. Secretary of State, I am going to make this slightly more domestic in nature and bring it back to the natural environment and the White Paper that you’ve referenced a number of times already. Specifically, Sir John Lawton’s report on wildlife has identified some serious areas of concern; that wildlife sites are too small, too restricted, and there is loss of habitats, lack of protection and so forth. As I’ve said, we are very much looking forward to the natural environment White Paper, but I just want to know whether it’s going to fully implement the Lawton report’s findings.

M r s Spelman: The Lawton review is an incredibly useful document for us. I thoroughly enjoyed meeting Sir John Lawton. I think one of the most powerful ideas within it is the wildlife corridors and for us the challenge is to align our resources and our abilities to deliver on those objectives. The natural environment White Paper is our opportunity to give expression to the ideas within the Lawton review, in as far as we can afford them. But we can align our resources to work in the way that Sir John Lawton described, through our stewardship schemes for example. I’m sure that the hon. Lady will have seen that despite the cutbacks that we’ve had to make, we have maintained both types of entry level and higher level stewardship, precisely with the purpose of being in a position to implement some of what Sir John Lawton was suggesting. I would just like to mention that Natural England has hosted stakeholder workshops-since they have come up in conversation a few times-as part of our work on the natural environment White Paper to look precisely at how we can implement Lawton.

Q42 Caroline Nokes: Thank you. You mentioned yourself "as far as we can afford" to implement them. Have you costed the full recommendations yet and is this already subsumed in your CSR settlement?

Mrs Spelman: I’m trying to remember how much Sir John Lawton estimated it would cost to implement Lawton in full, but I have a feeling that it was a figure that exceeded £1 billion.

Mr Anderson: It was a huge amount.

M r s Spelman: Which would be nice to have; but if we look at the total budget of Defra, and especially Defra as slimmed down, that would constitute virtually half our budget. The point being that we can make our resources work towards these objectives in the way that I’ve described, with the stewardship schemes. I thought one of the most powerful points that Sir John Lawton made was that wildlife corridors don’t always need to be solid, though they can be. Stepping stones are helpful, certainly in the landscape scale environment, and the retention of those stewardship schemes and our determination to increase by 80% the higher level stewardship schemes, would allow us to deliver on this concept of a stepping stone for wildlife to protect and enhance biodiversities. I think it’s possible to align our resources, however constrained, to the objectives that Sir John Lawton set out and we’ll be striving to achieve that in the natural environment White Paper.

Q43 Caroline Nokes: You were right in your recollections; it was between £600 million and £1.1 billion that Lawton referred to. If Defra can’t afford it and if that’s what’s needed, who could pay for a more resilient biodiversity?

M r s Spelman: Well manna doesn’t fall from heaven. My point about this is that I do believe that we can deliver on Lawton by using the resources in the way that I’ve just described. That was one of the reasons why we fought very hard to maintain both entry and higher level stewardship schemes, and to look to enhance the environmental benefits that we achieve using entry level schemes. One can understand how if those schemes are applied in the corridors that we set out to achieve, we go a long way with our existing resources to deliver on what Lawton was proposing. It was a tough settlement, but I think it’s important to say before the Select Committee that we did manage to protect our flood capital, we did manage to protect our environmental stewardship schemes-

Chair: Sorry, I think we just want to keep with Lawton at the moment.

M r s Spelman: -precisely with this in mind.

Chair: If we can move on to Simon Kirby, please?

Q44 Simon Kirby: Secretary of State, can I ask about your Department’s involvement in the plans for a green investment bank?

Mrs Spelman: Yes, absolutely. I support it.

Q45 Simon Kirby: Okay, we’ll be very quick then. Do you think that the green investment bank could have some role in delivering the Lawton report? The current understanding of why the bank would exist is that it would be there to tackle carbon emissions, but could it have a wider remit than that?

M r s Spelman: Well, it could do. My understanding was that the green investment bank was principally there to try and help the greening of our infrastructure, which is a very real challenge and doesn’t come cheap. I supported DECC in its endeavours to secure that because I see that as integral to achieving the coalition Government’s objective of greening the economy. I remain committed to that. I hadn’t principally thought of it as a source of finance for delivering on Lawton, but I wouldn’t rule that out.

It’s just I think we have our work cut out as a nation to deliver a new green infrastructure for the economy, especially in the tough times. But the one thing about the green investment bank is that it’s designed to draw in private investment and I believe that in the context of Sir John Beddington’s analysis of the perfect storm, there will be really important opportunities for both public and private capital to invest in green infrastructure. As more resources come forward some of those could well be used in a way to protect and enhance biodiversity.

Simon Kirby: Thank you.

Chair: Martin-yes, Caroline?

Q46 Caroline Lucas: Just a quick follow up on the green investment bank. Can I just ask the Secretary of State whether you support the idea of the bank being a fully fledged bank that can raise bonds in its own right, rather than being a fund that might have the name "bank" in it but, in fact, isn’t necessarily a fully fledged bank?

M r s Spelman: I don’t think we should rule that out, the reason being a proper analysis of the benefits to the economy from nature and also the necessity of having to adapt to climate change or face significant costs. That was part of the Stern report’s big message, the economic cost of failure to address climate change was prohibitive and that caught the attention of the private sector in the need to invest, to mitigate and adapt to climate change. We hope we’ve done the same for biodiversity and, therefore, I think it’s perfectly possible to envisage a time when private investment, through a banking structure, is the vehicle by which we green our infrastructure. But to start with, as the hon. Lady will have seen, there is a commitment by the Treasury to start up a green investment bank with the seed-corn capital from public finances.

Q47 Martin Caton: Your Department’s website highlights the need to work with the EU to produce a level playing field across the global economy and reduce the competitiveness effects of green policies on UK business. Will the avoidance of disadvantaging UK business slow the move towards a green economy?

M r s Spelman: Sorry, I was a little bit distracted by the coming and going. Could you repeat the question?

Martin Caton: Yes. If I can just quote from your website where you say you need to work with the EU to produce a level playing field across the global economy and reduce the competitiveness effects of green policies on UK business. What I’m asking is will the avoidance of disadvantaging UK business slow the move towards the green economy?

M r s Spelman: It’s a kind of double negative, which I’m struggling with. I guess what you’re trying to say is what is the website saying?

Q48 Martin Caton: What I’m saying is, is there a conflict there?

Mrs Spelman: I don’t think so. This is just common sense. We are part of a single market in Europe where we endeavour to have a set of rules and regulations that ensure that everybody in the private and public parts of the economy plays by the same rules, so that no one is unfairly advantaged or disadvantaged in their endeavours; in this case, to green our responses to the challenges that we face. But we know there are other parts of the world where such rules and regulations and high standards don’t apply. I think it’s perfectly compatible with our own endeavours to seek to raise the standard in other parts of the globe to the highest standards that we expect for ourselves. Surely that is part of the reason why we attend these international negotiations, to get these multilateral agreements, and I think it would be made a whole lot easier for the folks going to Cancun to try and negotiate on climate change because we had demonstrated in Nagoya that a multilateral agreement can still be achieved. I think that the website reflects a common sense position and, furthermore, there is hard evidence that it can be achieved.

Q49 Martin Caton: Well, you are right; clearly there are differences in standards across the board. There are also, we found-taking evidence as this Committee-that there are differences in attitude between Government Departments, certainly on moving forward to the green economy. I suspect there’s a difference between Defra and DECC on one hand and BIS on the other. Who is in the driving seat on the roadmap to the green economy?

M r s Spelman: Well, right from the top, both party leaders-both the Deputy Prime Minister and the Prime Minister-themselves have very strong green credentials and have driven, right from the outset, a desire to see the coalition agreement being the greenest Government ever, and they regularly repeat that and give expression to that, not least when the launch of the business plans took place on Monday. That is a reminder that that is our objective-to be sustainable and to green our economy because we believe it’s the right thing to do.

Q50 Martin Caton: So every Government Department gives the same priority to that.

Mr Anderson: I run the green economy roadmap. I chair that particular board, as it happens, and it is made up of DECC, BIS, Defra and HMT. If there are disagreements we have them out among officials, and if we can’t resolve them we go to Ministers. Each Department will look at whether it’s competitive advantage, whether you’re going for low carbon, whether you’re going for a more sustainable development approach. If they do rub up against each other, we have to be mature enough to have that conversation and come up with options for Ministers to go for and decide. I don’t think we see it as a competition in that sense. It is: how do you get a holistic approach to a roadmap for a green economy when we produce a document probably some time next year. That’s what we’re trying to do.

Chair: I think we need to move on to illegal timber and the UK Forestry Commission. Caroline Lucas.

Q51 Caroline Lucas: Can you tell me, Secretary of State, why the Government have backtracked on the coalition agreement by deciding not to make the possession of illegally logged timber a criminal offence?

M r s Spelman: I don’t think we have backtracked. Furthermore, we’ve been overtaken by events. I’m delighted to say that in early July the European Parliament voted on preventing illegal timber logging. I think it’s absolutely fair, at this point, to say that the previous Government did a lot of heavy lifting in this area and I did publicly, in the House of Commons, compliment my predecessor on the role that he had played in trying to secure agreement in Europe to ban illegal timber. But the conclusion of this was reached on my watch and I’m delighted that it has been. I believe that the regulations have already been through the Agricultural-no, it’s not the Agricultural Council because the regulations can be approved by any Council meeting and they were approved, I think, by a Council meeting last month. What I find difficult to understand-the hon. Lady will understand it far better than I do with her heritage-is why it takes until 2013 to get these regulations fully implemented. But I am clear that we need to implement this into British law and we are fully committed to doing so.

Q52 Caroline Lucas: Maybe I could explain what I mean because I was the Rapporteur for that particular dossier in the European Parliament, so it’s one that I know well. Even at the time when the coalition agreement was being drawn up it was pretty clear that what was going to come out of the EU was a regulation that would make it illegal to put timber on to the market for the first time. The first placement on to the market would be an illegal offence but not the possession of timber down the supply chain, which is precisely why the coalition agreement included a pledge to close that loophole. That’s why Greg Barker, in a previous Parliament, had put down a private Members’ Bill on this very issue. There is still a loophole. The coalition agreement said it was going to close it. I now have a letter from the Minister, Jim Paice, saying he’s not going to close it and I would like to know why the change was made.

M r s Spelman: I genuinely don’t think that we have backtracked.

Q53 Caroline Lucas: Secretary of State, but there is. I have the letter from Jim Paice saying, "We have now decided not to do something that we said we were going to do in the coalition agreement". So whatever verb or noun we call it, something has happened since the coalition agreement and this letter from Jim Paice and my question is what it is that’s happened.

M r s Spelman: Well, I’m sorry but without seeing that I can’t accept that interpretation. I think at the time the coalition agreement was drawn up there was not a European ban on illegal timber in place. Barely two and a half months later there was and I think the important thing is that we don’t want to duplicate EU legislation.

Q54 Caroline Lucas: It’s not duplication. There’s a separate issue.

M r s Spelman: We will bring in criminal sanctions for those who place illegal timber on the market.

Q55 Caroline Lucas: Who place illegal timber on the market, but my question is about the possession of illegal timber thereafter. The point is that you could have firms that set up shell companies that are set up to put timber on the market illegally for the first time. They then dissolve and then illegal timber is present in the market. The EU regulation only governs the first placing on the market. It does not govern the possession thereafter, which is why the coalition agreement originally said that it was going to close that loophole. That loophole is still there.

M r s Spelman: Well, I think the bigger prize for us was getting an EU agreement on this and, inevitably, an EU agreement requires negotiation. The deal on the table was to secure agreement-one acceptable to the European Parliament of which you used to be a member-on which all member states were agreed. There’s a practical difficulty surely somewhere down the track. If somebody makes a chest of drawers out of wood that’s several generations removed from when it was originally imported, it is quite difficult. It is much easier to control and police the first placement of the timber, surely. It’s a practical outcome that has effect and, as I was trying to say, we will bring criminal sanctions for those who place illegal timber on the UK market. And it’s a significant step forward because at the moment that sanction does not exist and it should give the hon. Lady comfort to know that this has been agreed not just in the UK but across Europe. Because otherwise it is too easy within a single market that doesn’t have agreement of all member states-as we just said, if there isn’t a level playing field then it’s too easy for the requirement of one or other to be abused.

Q56 Caroline Lucas: I don’t want to dominate the proceedings. I would just observe that the two are not mutually exclusive. There is the EU regulation, which doesn’t include this crucial part. There was a proposal in the coalition agreement to include that crucial part and, for whatever reason, it hasn’t happened and I just want to put on record that I’m disappointed about that. But can I ask the Government what they are going to do-

M r s Spelman: Whatever reason is simply that the agreement on the table was the agreement that we had the opportunity to sign up to, and that was a big prize for us to get European-wide agreement.

Chair: I think just to get us on to the record, I think the issue that is being referred to by Caroline Lucas is that the coalition agreement says, "We will introduce measures to make the import or possession of illegal timber a criminal offence", and then it goes on to that in terms of possession.

Mr Anderson: That’s why Jim Paice wrote out to explain why that change had taken place and the parameters of it.

Q57 Chair: So do we take it that that was framed within the context of the European legislation?

M r s Spelman: We didn’t have it at that point in time.

Mr Anderson: That’s right.

Caroline Lucas: Well, you had a draft but that’s been changed.

M r s Spelman: Obviously the sequence was at the point at which the coalition agreement was framed the opportunity to sign up to a European-wide agreement wasn’t on the table.

Q58 Caroline Lucas: It was.

M r s Spelman: But not in the form that it was put to either Ministers or to the European Parliament in July.

Chair: On that point, Zac Goldsmith.

Q59 Zac Goldsmith: I think the first comments from the coalition-well, from the Conservative party-were from William Hague some time ago where he talked loosely about replicating the US Lacey Act, which specifically does cover the possession, import and distribution; so not just the first point of entry. I believe that Greg Barker’s Bill that Caroline referred to was also co-sponsored by William Hague, Oliver Letwin, Greg Clark and Nick Herbert, so I think it was the case that there was a commitment to take a much broader view. What has happened in the European negotiations, I think there’s no doubt there has been a water-down. And I would just like to say that if Defra would agree to re-examine this issue I think it would be well worth doing because there are really quite gaping holes in the European-they are a huge step forward, I agree with you, but they don’t go far enough. It would be great to hear that Defra would just look at this issue again and perhaps even talk to Caroline, who knows an awful lot more about this than I do.

Mr Anderson: One of the key points of what we’re trying to get to is to track the timber back to the first placer. We’re trying to eradicate it across the piece, not just in one country, and that’s what we’re really trying to get to. Yes, there is some compromise within it but that’s the key aim of what we’re trying to get to; rather than making my possession of my chest of drawers illegal, which isn’t going to get you very far.

Q60 Chair: I certainly think the Committee would welcome some clarification on further consideration of future options on that.

M r s Spelman: We have to consider the regulations as set out by the European Commission anyway, so we have an opportunity to look at how we transpose those into national law.

Sheryll Murray: A letter was referred to that was sent to a Member. I’m just wondering whether the Member would be prepared to make that letter available to the Committee because if it’s included in our evidence then clearly-

Chair: I’m sure we can get that as part of our evidence. So we want to move on to the Forestry Commission now.

Q61 Mr Spencer: Jim Paice recently wrote to us about the Government’s plans for the Forestry Commission. I know the Secretary of State is familiar with Nottinghamshire and Sherwood Forest and how important that is to the residents of Nottinghamshire. I think it’s quite important that we don’t swap a financial deficit for an environmental one.

M r s Spelman: No, of course, of course.

Mr Spencer: Can you just tell us what safeguards are there to ensure that the public can still enjoy the forest?

M r s Spelman: Yes, absolutely. The safeguards I outlined at oral questions. Just to be perfectly clear, could I nail the myth that we are about to turn the New Forest into a golf course or build Centre Parcs all over Sherwood Forest. That was a piece of Sunday newspaper journalism that caused a lot of heartache. I think we need to set out the facts, that only 18% of woodland and forest in England is publicly owned and that consists both of what I would call commercial forestry-plantations, largely, of timber that is regularly felled and used as part of the supply chain in our economy-but also what I would call heritage forests, which Sherwood Forest would clearly be a part of.

The safeguards that the hon. Member is looking for are very clear. As I said on the Floor of the House, felling licences are required for any timber that is part of the public estate and ultimately responsibility for that rests with the Department. He can have that assurance. All we wanted to do-in due course, a consultation document will come forward, which was unhelpfully second-guessed at by the newspaper-is to look at the opportunity for the people who live near the forest and woodland to take ownership of it. They are the people most likely to look after it in perpetuity.

As part of the big society approach that the coalition Government are taking, we think it’s quite reasonable that probably the people who live near Sherwood Forest feel it is most precious and most want to keep it safe and we think it’s reasonable to look at those options. In due course, a consultation document will come forward with some options for consideration.

Q62 Mr Spencer: Right. I think that’s quite true and certainly I think the whole Committee would agree that planting trees is good news.

M r s Spelman: Absolutely.

Mr Spencer: And certainly people who live around Sherwood would be very keen to plant trees in that area. What plans do we have to deliver that? I mean will there be any cash available to assist?

M r s Spelman: Well, the coalition Government have an objective stated in their business plan to plant 1 million trees. Obviously the time for tree planting is just coming upon us; you can’t plant during the summer and the right conditions now are emanating for a tree-planting campaign. In our business plan it says we will commence that towards the end of this month and the beginning of December, and we hope sincerely that in the call of interest for that-both among local government, local communities and stakeholders-we will find people who are keen to be part of our plant a tree for biodiversity campaign.

Q63 Mr Spencer: Is it an aspiration or a desire? Is there any funding available to assist people to get involved in that campaign?

Mrs Spelman: Well, it depends, of course, who undertakes the planting. Local authorities, who have their own resources but to whom we also give area-based grants, may, we hope, show an interest in part of the tree-planting campaign in the spring-still the tree-planting era. I well remember visiting Cheltenham and looking at a tree-planting campaign there, undertaken by the local authority but in conjunction with the local community that wanted to plant an orchard. We’re not going to be prescriptive about what kind of trees, but obviously we’re looking to enhance biodiversity as part of this and we are involving as many people as possible as part of a big society approach. Some of them will have some of their own resources; to others we may be able to bring some resources. It’s a combination.

Q64 Chair: In terms of the proposed sale, how do the Government anticipate that they will ensure full access to woods and forests? This issue of public access is quite important.

M r s Spelman: Which will not be altered in any way. The statutory rights of access to woodland and forestry remain and the Minister of State made that very clear in response to an oral question in the House. There’s something else I’d just like to mention as well because I don’t think this has come out. Regularly, the Forestry Commission has been selling off hectares of forestry over time; just to illustrate to the Committee, 1,100 hectares of forest were sold off in 2009. Every year, back as far as my figures go, which is 2000, hectares of forest have been sold. But this is more of the commercial variety and we perfectly understand the heritage value of places like Sherwood Forest and the National Forest, and I do feel that the press coverage has unnecessarily distressed people who attach importance to woodlands and forest, as we do.

Q65 Caroline Lucas: I just wondered if you could confirm that Ministers have been discussing the possibility of selling off the full 100% of the estate. Could you confirm if letters and other discussions have been under way to that effect?

M r s Spelman: I think that the sheer fact that the options include transfer of ownership to the community, which may not involve sale, shows the hon. Member that that is not a correct reflection of what we’ve been considering. Obviously the Woodland Trust and other NGOs may have an interest in acquiring parts of the forest for the reasons that they are concerned to protect biodiversity, preserve species and enhance biodiversity. But it’s not accurate to say-

Q66 Caroline Lucas: It’s a very precise question, if I could, because-

Mrs Spelman: Yes, but I just said it’s wrong. It’s wrong because obviously-

Q67 Caroline Lucas: Can you be absolutely clear then; there has never been any suggestion by any Ministers about selling off 100% of the forest estate? Just a simple yes or no would really be helpful.

Mrs Spelman: Not all for commercial purposes. No.

Q68 Caroline Lucas: But selling off 100% though?

Mrs Spelman: The distinction is between commercial and heritage and not all of it, obviously. As I said on the Floor of the House, just because it’s in state ownership and passes to the ownership of a charity or the community or a private ownership doesn’t mean that biodiversity will be lost.

Q69 Caroline Lucas: I’m not questioning that, I’m just simply questioning whether or not there was a proposal to sell off 100% to whoever. Has that been considered?

M r s Spelman: No. What we have looked at is a series of options for different ownership, which is a mix of options, not all involving sale. Also could I mention one other thing, because I think this is important again, just to nail another myth that has abounded. I think we were accused at one point of making a fire sale to fill the Treasury’s coffers and part of the agreement that I secured with the Treasury in September, in return for a tough settlement on our resources and a better than average settlement on capital, was the agreement of the Treasury that any assets that are sold by the Department should be retained by the Department in order to deploy to other capital projects.

I think that’s quite an important point, because in resource-constrained times there are capital projects that we need to fund. I’ve just been asked about planting 1 million trees, for example, and I think it was a good deal to secure from the Treasury that it’s not going into the Treasury coffers if, at any point, any part of this is sold. But as I have said, there has been regular sequential sale of forestry as far back as my records show.

Q70 Chair: It’s very helpful to know that. We’ve almost come to the end of our time but we did just have one last question, if I could ask it very briefly. The Committee did a previous report on adaptations and climate change, and we’re just a little bit concerned and wondering, with the demise of the Audit Commission, how you’ll be able to monitor the extent to which local authorities are taking the necessary action to adapt to climate change with the urgency that is needed.

M r s Spelman: I don’t doubt that local authorities will do more to adapt to climate change and-

Q71 Chair: But how will you monitor it, that’s the question?

Mrs Spelman: Well, the Environment Agency, of course, is a regulator and the Environment Agency already works very closely with local authorities and provides advice and support to them on how to improve resilience and adaptation to climate change in their own locality. This is an incredibly important role by the Environment Agency because, historically, local authorities have undertaken adaptations to climate-related issues down the history of time. But the danger, if it’s not regulated at a national level, is that one local authority may take some measures to adapt itself to climate change and that has a negative impact on next-door; if you take water, in particular, and you put it in in one place, it comes out in another. I’ve asked the Environment Agency to be proactive in helping local government to address the issues of surface water flooding, coastal erosion and its responsibilities, particularly of the lead local authorities under the Flood and Water Management Act.

Q72 Chair: Is that all spelt out in the consultation that we are about to have with Natural England and the Environment Agency?

M r s Spelman: Yes.

Chair: It is?

M r s Spelman: This is a key role for those two key delivery agencies for Defra and I’ve said to both Natural England and the Environment Agency, "I want you to think much more in terms of the customers that you serve, and in this case your customers are local government. They need the help of the information that you hold and the expertise that you have to make their own communities more resilient". I believe that’s a service that Defra can provide through its delivery network in an even better way than it has before and I hope the customers will notice the difference.

Chair: Okay. Well, we’ve come to the end of our time. Thank you very much indeed. I’m sure there’s a huge amount of subjects that we are going to have to return to, but thank you very much indeed for your time.

M r s Spelman: My pleasure.

Chair: Thank you.