UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 1357 vi

Environment, Food and Rural Affairs Committee

Natural Environment White Paper

Wednesday 18 April 2012

Richard Benyon MP and DAVID COOPER

Evidence heard in Public Questions 268 329

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Oral Evidence

Taken before the Environment, Food and Rural Affairs Committee

on Wednesday 18 April 2012

Members present:

Miss Anne McIntosh (Chair)

Richard Drax

George Eustice

Barry Gardiner

Mrs Mary Glindon

Neil Parish

Ms Margaret Ritchie

Amber Rudd

________________

Examination of Witnesses

Witnesses: Richard Benyon MP, Parliamentary UnderSecretary for Natural Environment and Fisheries, David Cooper, Deputy Director, Ecosystems and Sponsorship Unit, Department for Environment, Food and Rural Affairs, gave evidence.

Q268 Chair: Minister, good afternoon and welcome. As you will be aware, there will be interruptions for votes, but we will get back as quickly as we can. We would like to welcome you and thank you very much for participating at our last evidence session on the Natural Environment White Paper. Would you like to introduce yourself and Mr Cooper for the record?

Richard Benyon: Thank you, Chair; it is a pleasure to be here. I am with David Cooper who oversaw the writing of the Natural Environment White Paper and is the Deputy Director, Ecosystems and Sponsorship Unit at Defra.

Q269 Chair: Thank you. It is a very ambitious White Paper. How do you see it progressing and how do you see the 92 smallscale commitments being rolled out?

Richard Benyon: I agree; I think it is an ambitious paper. I think it is, in one sense, a framework document of how we envisage valuing and enhancing nature way into the future, but it has some very specific recommendations that we want to achieve as quickly as possible. Of the 92, 10 are complete in that they are done and set up. They may just be lines on maps, if you like, in terms of Nature Improvement Areas, but they are created, they are funded and will be effective. There are 80 other recommendations underway, and there are two still not started, but which will be very shortly: the Local Nature Partnerships, for which we have started the applications process and will be announcing in the summer, and the Ecosystem Markets Task Force, which has been announced but has yet to meet, but will do shortly.

Q270 Chair: I understand that you have an action plan, which does and will set out regular updates on the issues. Is there any particular reason why you wouldn’t wish to publish that?

Richard Benyon: I understand some of the people giving evidence to your Committee said that they did not want to be held to rigid dates and timelines on a number of the aspects of this. They believe that it would be achievable if we work with them in partnership over a long period of time and that is, for example, the view of the Local Government Association and others. We are writing a quarterly newsletter to all stakeholder groups who are involved in this and I am very happy for you to see that. We are about to publish the next quarterly one imminently. That sets out our progress across these areas. Other key deliverables we are happy to be held to account for, for example the establishment of the more institutionalised parts of the White Paper: Nature Improvement Areas, Local Nature Partnerships. Other organisations that we have set up are clearly measurable in how they are progressing.

Q271 Chair: When can we expect to see progress on some of the milestones and commitments that you have set out?

Richard Benyon: As I say, we have completed 10. If you were to give me examples of ones that you want me to give more specifics on I can, or David can assist me. But a number of them are not just purely for Government to do. In fact, most of them require a vast degree of local support and partnership working. Bear it in mind that much of this came out of reports such as John Lawton’s "Making Space for Nature", which really emphasised the need to harness local bodies, local enthusiasm. Why I think this process has been one of the most rewarding and exciting of my two years in this job is that it engaged enormous enthusiasm right from the start; there was an unprecedented response to the consultation. I went round the country attending workshops where there were representatives of farming and landowning interests sitting alongside nature groups, NGOs, national and more local groups, and it has been a really exciting process to see how this has engaged. Now, with the development of, for example, the Nature Improvement Areas, seeing the local enthusiasm that I have witnessed on the ones that I visited, that emphasis on local working is what is really important.

Q272 Chair: It is just that some of them are extremely vague, like restoring natural capital value and even the Sustainable Catchment Management Programme. Could I be more specific? Perhaps you could relate it as well to something I know Defra are very keen on: earlier engagement with the European Commission on EU directives. What is the cost of implementing the European Water Framework programme to farmers, to those businesses and water companies affected, to local authorities?

Richard Benyon: We identified very early on in government that we were failing to meet the demands of the Water Framework Directive, and that in itself is a problem. But we want to comply with the Water Framework Directive not because it is a directive and it is imposed on us, but because we just want to see our rivers as fully functioning ecosystems, and only a quarter of them are. So that is an absolute priority. We have levered some more money into that process: £92 million. And we have changed the way we are operating-now on a catchment basis rather than through River Basin Management Plans, which still exist, but they were too wide and broad. We are engaging local groups and organisations to make sure that we are identifying the problems in river systems and dealing with them on a reach by reach basis up that river system, and it is working. Unfortunately, the drought is going to mean that we will not be able to prove as quickly as I had hoped the effectiveness of this, and water quality will continue to be a problem for other reasons beyond our control.

But what will it cost landowners and farmers? In many cases, it will be a negligible cost, because the whole purpose of the process is to make sure that where there is a problem, perhaps caused by farming but very often by other means, there will be an organisation that will meet with and discuss this with the farmer and assist them in changing the way they run their business-the crops they plant, where they plant them-to make sure that they are complying not only with crosscompliance but also with the Water Framework measures. So I think that in many cases it will be a negligible cost. It is about building relationships and about addressing issues at a very local level.

Q273 Richard Drax: Minister, good afternoon. You mentioned Sir John Lawton. He suggests that £1.1 billion is needed to protect the environment. £8 million has been identified as NEWP’s total spend. I think we all accept that we cannot raid the public locker anymore, so is that adequate considering that Lawton says it is £1.1 billion?

Richard Benyon: Sir John said that it should be somewhere in the bracket of £600 million to £1.1 billion. He also said that it shouldn’t be for only Government to spend, and I am sure no one on the Committee is of the belief that only Government can deliver more biodiversity and more protection for our natural environment. We all see in our constituencies who is doing it, why they are doing it and their motives for doing it. Let’s do some maths: roughly £450 million is spent through agrienvironment schemes, added to which are catchment management schemes of £92 million, added to which the £7.5 million on Nature Improvement Areas and an extra £1 million to get Nature Partnerships up and working. I can probably scrape up a few more million, but that is starting to get us into that bracket. On top of that taxpayers’ money is a variety of different activities. The Campaign for the Farmed Environment is a set of voluntary actions being taken forward by landowners to improve the natural environment and nature on their farms. Altruism: we underestimate the motives of not just farmers and landowners but also local groups, naturalists and certain NGOs who manage wildlife assets; they are doing it because they want to and because they want to see it improved. That is of huge value. There may be other motives that encourage them to do that.

Government has to play its part and you rightly point out the difficulties that we face, but we have made this a priority and we have levered in public funds. I think that we are at least in Sir John’s ballpark, and we have to be more effective about using it. For example, Nature Improvement Areas will lever £4 for every pound we invest. That is the assessment that was done by Sir John’s panel as they looked at the competition to see which ones were being taken forward. That is levering a lot of money for every pound of taxpayers’ investment.

Q274 Richard Drax: You talk about freeing up funding from the market. There is a bold vision but not many concrete steps. Have you anything further to add on concrete steps to free up funding from the market and, also, what will you do to ensure that the outputs from the various working groups aren’t just mere rhetoric? I understand there are a number of working groups looking at all this.

Richard Benyon: Working groups in terms of Local Nature Partnerships or what?

Q275 Richard Drax: I think working groups for funding, as I understand from the question.

Richard Benyon: There were 78 Nature Improvement Areas that were applied for-was it? It was in the high 70s. We could only do 12; 12 is not the sum total of our ambitions by a long margin, but at the moment that is as far as we can go. The most successful ones were not only ones that just engaged land managers with other interested parties and local people, but ones that demonstrated a clear desire and ability to lever extra bang for their buck, and that is where this figure of £4 for every £1 came from. I hope in some cases it will be exceeded.

David, do you want to be more specific about what groups are taking this work forward?

David Cooper: Are you perhaps thinking about payments for ecosystems work and the potential of that?

Q276 Richard Drax: Yes. I think any working group that is involved in this. The question is how is the funding from the market going to be achieved? There are lots of bold ideas, but nothing really concrete as to how it will be achieved, and I think that is what the question is really oriented around.

Chair: It is particularly, if I may, the Ecosystem Markets Task Force, if that is helpful.

Richard Benyon: This is being headed up by Ian Cheshire of Kingfisher Group. It is due to report in a year’s time; it is going to have an interim report in the autumn; and it is due to have its first meeting very soon. This has brought together people at the top of some very large companies who recognise the value and importance of ecosystems and the businesses they operate. It is about managing natural resources, and there are plenty of examples of how business is way ahead of Government in this. I will pluck one example I always like, which is Adnams Brewery in East Anglia, who have built a new brewery that makes a pint of beer using just 3.5 pints of water as opposed to the eight pints it took to make a pint of beer before. They did that not because they wanted to fulfil some corporate responsibility measure; they did it because they recognise in East Anglia water is going to become an increasingly expensive, hard to acquire commodity. That is a company using the market in a positive way. We hope through that the Ecosystem Markets Task Force we will get precisely the kind of answers you seek and the measures that will come forward from this will enable Government to give a lead to where business has led thus far.

Q277 Chair: Is there not a danger, though, with all these task forces and working groups set up within the White Paper, that all these people are talking together and forming partnerships, but nothing is done?

Richard Benyon: The abiding and overarching thought behind the whole process is that we are a Government in a hurry. We want to achieve change and we want to achieve great things, and the last thing we want are talking shops. So every group that has appeared through this, whether it is the Ecosystem Markets Task Force, Local Nature Partnerships or the Natural Capital Committee, will have an absolute, clear remit, a purpose, and will make a difference. Yes, there are different groups doing different things, but they will be effective, they are extremely well led-the ones that we have already created-and I have every faith that they will bring about the changes that we want to see, developing on thinking that has been happening, in some cases, in other countries already and we are slightly behind. That is thinking that, as I say, has been happening in business but Government has not been particularly engaged with, which recognises that we all depend on nature at every level, in everything we do in our national economy, in our daily lives, in the localities that we represent. So we want these to be effective and we think we have created the structure for them to be so.

Chair: The record will show that you want to be judged by your achievements there, Minister. Thank you.

Q278 Mrs Glindon: Are there any environmental regulations that you would support being removed in order to achieve economic benefits?

Richard Benyon: We have been through quite a process on this, as you will be aware, through the review of the Habitats Directive and throughout that process we tried to get across a clear understanding that regulations are necessary. We just want them to work as well as possible and to be as clearly understood and able to be understood by people in the real world rather than by people who live and breathe a high level of government rhetoric. So, simplicity, and making sure that regulations are there to serve what their purpose is to do, which is to protect wildlife, to protect the natural environment, but not to inhibit or limit sustainable development. That is a balance, and I hope it’s a balance that we have got right.

Q279 Mrs Glindon: So it is just getting the balance, but not necessarily getting rid of any specific regulation?

Richard Benyon: We are going through a big deregulatory process and you will be aware of the work happening in Defra through the Macdonald Review-which is seeing a real drive to reduce regulation on farm businesses-and also across Government: the Red Tape Challenge and the Habitats Regulation Review. It is always a very dangerous thing to talk in extremes in front of your Committee because it then gets taken out of context by someone sitting behind me and splashed all over the Western Morning News or something like that. So I will be very careful how I say this: if we had no planning system in this country, people would be able to build factories everywhere and, although we might want the jobs, none of us want that level of growth at any price. We really value our countryside, and there are many services we get from it. So what we try to achieve holistically across Government, and drawing many of these together in this White Paper, is an approach that I hope gives the clear drive that we are protecting the natural environment, understanding the services it provides and incorporating that into every level of how we do government. And that means regulation has a part to play-sensible, good, well balanced regulation.

Q280 Amber Rudd: We understand that there are some regulations to be scrapped, but most of those have already been identified as being obsolete. Do you think that there is going to be any real progress made from the Red Tape Challenge if the ones being abolished are already obsolete?

Richard Benyon: First of all, on wildlife legislation, I did read the transcript of a discussion with Oliver Letwin on this, and I think I just might take this opportunity to clarify what we are trying to do there. There are laws governing how we manage, protect and, in some cases, control wildlife in this county. Some of them go back hundreds of years; some of them bear no relation to modern day, with no understanding of issues such as climate change or landscapescale conservation or all the other things that we are talking about today. We have asked the Law Commission to do a review of wildlife legislation with a possible view towards making changes in a sensible and proportionate way in the future. That is completely separate from Habitats Regulation Review, Red Tape Challenge and others. But what we are trying to do is to make it simpler and easier for businesses to follow regulation-

Q281 Chair: Minister, I am so sorry. Could you repeat what you just said, that it is entirely separate? Because I understood that the Law Commission is looking at the Habitats Directive and how it is implemented in this county.

Richard Benyon: This is why I think there might have been a misunderstanding when I read the transcript. I may have misunderstood it myself, but what we are doing is looking at wildlife law-well, we are not looking at it; the Law Commission are looking at wildlife laws to see if they can be rationalised and made more fit for today. The Habitats Review, which was completed recently, prior to the Budget, was separate to that, and I think you raised an issue in relation to bats and things like that. That is a separate issue, which I am dealing with, trying to resolve a particular issue that occurs in certain parts of the country. But that is not anything to do with the Law Commission work.

Q282 Chair: I think there is a degree of confusion here, because I thought at some stage you wrote to me to say that the Law Commission had been asked to look at-

Richard Benyon: It was an answer in Parliament, I think.

Q283 Chair: I knew it was in writing-a written statement from you-and I just wonder if you could clarify what the difference is between wildlife legislation and a proposed Bill, and habitats, just so that we are all absolutely clear what we are talking about.

Richard Benyon: I am very happy to provide you with what we have asked the Law Commission to do, and we will provide you a written summary of that. That sets out clearly a whole range of wildlife law that we want them to look at to try and see if there are changes that can be made to those. But the Habitats Review that was announced in the Autumn Statement carried out over the winter and published just before the Budget was a specific review of the Habitats Directive and, for example, set out how we are going to manage this regulation better with our major infrastructure projects unit in Defra, which will work with officials from other Departments to try and ensure that early engagement by developers prevents problems happening further down the track. This is a major change that we think will be more effective in ensuring that major projects, for example, will be able to proceed.

Q284 Chair: There is a separate wildlife one.

Richard Benyon: The Wildlife Review has gone to the Law Commission and they will be reporting in due course.

Q285 Barry Gardiner: Just to follow on from that and for clarity, what prompted the Wildlife Review? You said it was to update and to make it fit for today. What prompted you to think that the wildlife laws as they stood were not fit for today?

Richard Benyon: This did not specifically relate to the Natural Environment White Paper, so my memory is a little bit hazy because this was very early on in my time in the Department. But we do believe that there is a view across a lot of organisations-NGOs and others-that a lot of wildlife law is not particularly focused as to how it should be today.

Q286 Barry Gardiner: Minister, I don’t want to lead you down a road that you may want to retract from and therefore can I ask you perhaps just to write to the Committee to set out the rationale, the reasons why you felt that the existing wildlife law was not fit for today and what prompted you to ask the Law Commission for that review?

Richard Benyon: I don’t think I have said anything that I would retract from, but I will certainly-

Q287 Chair: I am just very unclear, because I thought it was called a Habitats and Wildlife Directive Review and now you have just told us that there are two reviews, one on habitats and one on wildlife, and I am struggling to see the difference.

Richard Benyon: To make sure we get this absolutely clear, David-

David Cooper: We will write to clarify this. To build on what the Minister said, the Habitats Directive is a specific directive, obviously, and the review is about how that is being implemented in England.

Q288 Chair: That is with the Law Commission?

David Cooper: No. That was the separate piece of work on the Habitats Review that has been completed now, which was published a few weeks back, around the time of the Budget.

The separate piece of work that the Law Commission is doing was going on anyway. It started in the background and way before the Habitats Directive Review came into being. The Law Commission is looking more broadly at wildlife law in the UK and in England, because it has grown up piecemeal over many decades, and it is looking at how best to make that fit for purpose for the future. So it is a broader exercise, not specifically related to the Habitats Directive, if you get my meaning. That is how the two are different. The Habitats Directive Review has now been completed. The Law Commission, though, is carrying on with its separate piece of work.

Richard Benyon: Would it be helpful if I just ran through what we have done on the Red Tape Challenge? Of the 255 regulations in the environment area, 132 will be improved, mainly through simplification or consolidation, 70 will be kept as they are to uphold important environment protections, and 53 obsolete regulations will be removed.

Chair: That is helpful and I think a back up letter would be helpful.

Richard Benyon: Sure.

Q289 Amber Rudd: I am coming back to the Habitats and Wild Birds Directive Review, which, as you have said, just recently came out. It did identify certain problems and delays, and we understand there is to be established a crossGovernment Major Infrastructure and Environment Unit to start shortly, or this month, to improve the preapplication identification, etc. Could you just explain to us why it is necessary to set up a special unit to ensure Government Departments liaise effectively on implementing these Directives?

Richard Benyon: One of the problems we identified is when particular issues relating to the Habitats Directive are raised too late in the game, and those are the ones that hit the press. I think it is 0.2% or nought point something percent of applications that are in this category, but they are the ones that hit the headlines, and you get problems relating to just a few nesting birds of a particular species holding back thousands of jobs. Those are the sorts of things that frustrate us as MPs and also give concern to those who are worried about some of our rarer species. They do not want to see Government is going to trample over regulation they believe protects rare birds. But early engagement will make a huge difference. This unit, which will be run from Defra with involvement from the Treasury and from, I think, DCLG and possibly others-Department for Transport-will be able to identify those problems early on. We will learn from applications and we will find, as we go forward, that there will be a better way of doing this, and that developers will know that, rather than hitting a brick wall late down the track, if they start early talking to Natural England, working with other companies that have had experience of similar applications, they can deal with this. That is what this unit is set up to do. It was our idea, and has been grabbed across Government; Oliver Letwin is very keen on it and wants to institutionalise it and make sure that this is one of the key drivers that goes forward to improve how this regulation works.

Q290 Amber Rudd: Great. It sounds very positive. Do you know what it will cost to set up, do you think?

Richard Benyon: We’re not recruiting any more people to do this. This is reasonably senior civil servants who have experience in this area who will be working together with Natural England. Natural England have also set up a developers group to make sure companies that are regularly coming up against the Habitats Directive are aware at a high level of what they and what Natural England are required to do under the law and what Government is required to do under the law. All this is to the advantage of growth and jobs, because it will mean that we will be able to do things better rather than seeing things delayed and seeing money going into the pockets of lawyers-sorry if there are any here-in place of of jobs for our constituents.

Q291 Chair: As a Scottish advocate, nonpractising, I should declare an interest. You say it is a crossGovernment unit. Will this unit sit in Defra?

Richard Benyon: It will be based in Defra, yes.

Q292 Chair: Just before we leave regulation, I understand that each Department has to report to the Better Regulation Executive as to where they are on reducing the one-in, one-out regulation. If we as a Committee or the public wanted to monitor it, is it available on the Defra website?

Richard Benyon: That is a very good question. I am not sure.

David Cooper: Yes, there is information, and through the Better Regulation Executive website as well, about how Government is doing overall in terms of regulatory budgets, as they are called. So that is available.

Q293 Chair: Is it available on your website?

David Cooper: Yes, it is.

Chair: It would be helpful to know just where it was, if we could.

Q294 Barry Gardiner: Minister, a lot of the organisations who have made representations to the Committee have spoken about action plans, timetables. They have spoken about finance as well, but what I really want to try and focus on with you is what are the clear actions that you believe Government can take, in the first instance, that will enable us to develop real ecosystem service markets? Of course, we are doing all of this for a purpose, and the White Paper is commendable absolutely in what it is aiming to do on valuation of natural capital, on better understanding of ecosystem services. But we want to see those ecosystem services having a real market impact. We all know the historic example of the Catskills and other examples around the world where there is a real market operating and valuing ecosystem services. What are you going to do as Government that will help create that market?

Richard Benyon: One example is through regulators. Independent regulators they may be, but they are creatures of statute and creatures of Government and are given strategic direction by Government. One example is Ofwat. We are really enthused by what has happened in this price round following their decision to encourage water companies to engage with land managers upstream and work with them to clean up water. There is a virtuous circle here, because water companies then do not have to build large constructions, and those farmers should be rewarded for doing that. That is one example of where Government in whatever its form-you will understand where independent economic regulators sit-can drive and create a market, and we want to see much more of that.

I think you heard from United Utilities and their SCaMP project; other water companies are doing the same and they will be doing more in the next round, and the Water White Paper set out a clear direction on that. But we must not be obsessed by water, and you rightly point out that there are a variety of other ecosystem services that we should encourage. Whether Government is the right promoter of markets-sometimes when Government tries to get involved or create markets it can cause more problems than it solves-what Government has to do is to create the right climate for these markets to emerge.

You rightly point out various examples in other countries of where they are more advanced. I think you went to Costa Rica-is that right?-to see how they were emerging. The key comes down to what the provider or manager of that ecosystem receives to try and create that. If you are asking a farmer to stop producing wheat on a piece of land and to flood it, he will still be able to receive a value from farming that field even if it is grazing. The partial budget is a relatively easy one to do. But if wheat is going to go to £250 a tonne, the incentive has got to be there for him to change his business model. So it really comes down to looking at what the product is at the other end. This is immensely complicated and that is why we don’t seek to be so, perhaps, arrogant as to believe that we Ministers or we in government know all the answers. That is why we are engaging business at the highest level to assist us in trying to create these markets.

Q295 Barry Gardiner: I am genuinely just trying to engage here; I am not trying to seek a particular answer. I am grateful for the answer you gave on water, which I think is a very good illustration of the sort of ways in which the regulatory framework can enable markets to develop. You talked about engagement with industry and business, and that clearly is essential. What further steps-and again is it a question to you as Government-can Government take to ensure that there is adequate information, education, understanding within the commercial communities that may be affected here such that they make the connections that, yes, we could develop an ecosystem market here?

Richard Benyon: I will ask David to come in, in a moment. Perhaps more of an answer to your last question, but I will just talk about the Treasury Green Book and the guidance that was published recently. That sets out a change that will be adopted across Government. Departments, particularly like BIS, will be required to engage with companies, and there is information, for example, on the Business Link website about making sure that these are understood across a wider group of stakeholders. It is really important that we develop this thinking and keep business informed, and so this is not Government doing it from on high; this is Government working with business.

Do you want to add to that, David?

David Cooper: Just to add to that, as you suggest, creating these ecosystems markets is difficult and really there is market failure at the moment in that. The White Paper’s thrust is to say we need to get on top of that and, this year, there are two actions: firstly, we have a commitment to publish an action plan on payments for ecosystem services, which will get into exactly the territory you are illustrating: what are the institutional barriers, the information barriers, scientific barriers, financial barriers to these sorts of markets coming forward? So that commitment will get into all of that in some detail, as will the UK Ecosystem Markets Task Force that Ian Cheshire is leading. They have a workshop in the next month to look at this. So, getting into the substance of your question is exactly what will be happening this year to unpack that, but the thrust of the White Paper is that Government does need to enable this to happen, does need to help remove barriers and we have a number of interventions to do that: regulation, public spending, behaviour change and so on. The detail of that will be coming forward later.

Q296 Barry Gardiner: Thank you. Again, that was very helpful. Could you perhaps share with the Committee what you believe would constitute success? In 2014 and 2015, where do you want to be on the pathway to creating genuine ecosystem service markets?

Richard Benyon: I am straying on to Jim Paice’s brief here, but he and I and all of us are clear that CAP in its current and probably future form is unsustainable in the long run. If you want me to give my view as to what a measure would be, it would be farmers or land managers being rewarded for the services they protect and provide by much more of a close connection with other users of those services rather than the state providing it through subsidy.

Q297 Barry Gardiner: We may well agree on that. It seems to me a retreat back into the known territory, and of course what we are trying to do is to expand this concept across Government. Can I just move on to that question, really? You talked about the new guidance to go with the Green Book. One of the elements that was in the original Nagoya Declaration recommendations was that each Department should have to prepare inventories both of its own natural capital assets and of the effects that its decisions had on the wider natural capital. That is something that was not in the White Paper and unless it is part of the recommendations coming out of the ecosystem markets committee or group that you have set up, I do not believe that has yet been adopted by Government. Is that something that you are going to embed across Whitehall, because with respect to the question that you asked on the unit across Government, in a sense, that unit was simply getting Departments to do what they were supposed to already be doing, whereas this puts the onus on them to understand what their impact is in its own terms within the Department, rather than just saying, "Oh yes, and we’ve got to do that thing for Defra". If it becomes a rule from Treasury that they have to do this to have their own set of natural capital accounts, that creates a very different feel to the ownership of this issue within Government.

Richard Benyon: I will answer first and then ask David to come in as well. I think you are absolutely right and, Mr Gardiner, you know more about this than many of us because of your involvement with GLOBE. I really want to emphasise that what we are seeking to do is to institutionalise this throughout Government, and that is where the Natural Capital Committee comes in and that is why the involvement of Treasury Ministers at an early stage in the production of this Paper and with officials at the highest level in the Treasury is absolutely key. You are right: have we got this in place today? No, and I do not think you would have expected us to. The Natural Capital Committee has just been formed and while Ministers from the Chancellor down have been making speeches that state the importance of this, what we have got to do is develop this across Government and we will, but it is a process that we are still in the early stages of.

David Cooper: Just to add to that, as you know from the GLOBE work that you have done, to achieve that inventory method of knowing one Department’s impact on another’s natural assets and so on is very technically difficult, very complex. There are all sorts of issues of leakage and how you account for that, but the intention is there. The Minister has said this; you heard from the Minister for Government Policy and the Economic Secretary to the Treasury that it is to institutionalise this across Government and to mainstream this thinking and approach across Government. The environmental guidance in the Green Book that has been mentioned is, of course, a tremendous step forward in that. As the Minister rightly says, the Natural Capital Committee will be looking at this and at how best to ingrain in accounting terms the sorts of flows of natural capital and how one Department accounts for those and its share of another, if you see what I mean. So this is going to be looked at. The model that was proposed by GLOBE of inventories is one way. It is difficult, it is challenging, but the thrust of the White Paper is to try and move forward on that using the Natural Capital Committee.

Q298 Ms Ritchie: Minister, I would like to move on to the links to CAP reform, notwithstanding there could be an overlap with another Minster’s portfolio. The Natural Environment White Paper recognises the agrienvironmental schemes under the EU’s Common Agricultural Policy, which currently covers some 64% of English agricultural land, are important in achieving beneficial environmental outcomes. Therefore, is the Common Agricultural Policy going to prevent the UK progressing payments for ecosystem services?

Richard Benyon: We are in favour of a greener CAP, of a Common Agricultural Policy that is more reflective of what is going on in the environment than it is at the moment. We want to see more of CAP spent on public good, such as agrienvironment schemes, such as environment outcomes as described in the Natural Environment White Paper. One of the concerns we have is about the proposals coming forward. We think that Pillar II agrienvironment schemes are the best way to deliver real change for the better in the natural environment. They are multiannual; they are contractual with the land manager; and they are tailored to local circumstances. We have a concern that the Commission’s proposals to green Pillar I will not deliver the environmental benefits that we want, and they will not do precisely what you suggest, which is to try and see the development of a more ecosystemsbased management structure. We think that we can work with the Commission to make sure that the CAP is greened effectively. How far we will get, of course, at this stage we are unclear. And we want to make sure that we do this as costeffectively as possible.

Q299 Ms Ritchie: As a supplementary to the Minister, you say that you want to work with the European Commission. How do you and Defra intend to work and how do you intend to influence EU ministers, I suppose, in the Council of Agricultural Ministers, and environmental ministers, on the importance of moving to a more ecosystems payments approach in the future configuration or reconfiguration of CAP?

Richard Benyon: The Secretary of State is at an Environment Council today in Denmark, an informal Council of Ministers meeting. Jim Paice is going to Brussels next week to get these messages across. We are working with the Commission. We are working with other likeminded countries. We are seeking to advocate. There is a real engagement on this across the EU and many that are on our side, and I think there is an understanding in elements of the Commission about the dynamic of agriculture and how we have managed, using the current system of support for environmental goods, to make quite a lot of changes in recent years. With our commitment to increase HLS by over 80%, this is going to be a huge gain for nature and the natural environment. It is what our constituents want from a system of agricultural support. But how far the CAP will go in the blunt instrument that it is to try and create precisely the new ecosystems markets that you and Mr Gardiner have been referring to it is uncertain to say at this stage.

Q300 Ms Ritchie: A further supplementary: can you envisage when the timescale would be for possible outcomes, or is that too early to gauge?

Richard Benyon: On the timescale I defer to the Secretary of State and to the Minister of State, who are dealing with this on a daily basis, but if it is anything like the Common Fisheries Policy it might not quite happen when it is supposed to happen.

Q301 Chair: Is it not the case also that we are already greener in our CAP than many other European countries and that we should be extolling that?

Richard Benyon: It is the ability to transfer between the Pillars that has been an absolute godsend in terms of what we have been able to do with our agrienvironment schemes, and for some reason that is not understood.

Q302 Chair: Are there any other European countries that particularly support our position in this regard?

Richard Benyon: There are. There are countries that have a similar dynamic to farming here and there are others that do not, but I do not want to go into too much detail because this is not something I am dealing with on a daily basis and I would not want to mention countries. That is the purview of the Minister of State.

Q303 George Eustice: I just wanted to push this, because I think this is absolutely key. Some of the early evidence from I think it was Professor Hill, who is a leading authority in this area, made the point that there are some fantastic ambitions and thinking in the Natural Environment White Paper, but a lack of money to give full effect to the kind of change we would like to see in terms of valuing natural capital. Then you have the Common Agricultural Policy, which has a huge mass of money and an absolute fortune spent on it, where they are wrestling to try and find a way of greening it, but they haven’t done that yet. I just wondered how ambitiously the Government is arguing for that kind of change in this current round. I know, when we had the Secretary of State, she said that there was recognition at the Commission that their initial proposals were not going to work and that all the talk at the moment was about flexibility. Can we push that flexibility to say, "Why don’t we give a chunk of this Pillar I money to effectively create a market in transferrable environmental obligations"?

Richard Benyon: I think we have heard Jim Paice and Caroline Spelman speaking about the virtues of the current system as well as the flaws, and what we are trying to achieve in our negotiations. You are right. We could talk about a few million pounds here for Nature Improvement Areas and setting up Local Nature Partnerships. Whatever value those few million pounds might add, you are right, the big sums of money exist through systems of agricultural support. Those have improved over the recent decade or two, but the frustration, I think, that a lot of people feel is that we know they could be so much more effective and, in a sense, in this hearing it is difficult for me to say any more, because we do not know how the negotiations will culminate.

Q304 George Eustice: On the negotiations, are we saying that we think we should plug the principles of the Natural Environment White Paper into Pillar I, or are we getting into that trap where we say, "No one will support it, so we shouldn’t argue for it, because otherwise we won’t get it and we might as well argue for something that is more ‘realistic’"-in quotes-which is quite often where you end up with these things?

Richard Benyon: That is where you usually end up in the European Union. You end up, rightly, arguing in the realms of the possible, and the principled but sometimes lonely stand results in you achieving nothing. It is much better to get half a loaf than no loaf at all.

Q305 Neil Parish: I could take you up on that, Minister, but I will not. Can I talk to you now about these-

Richard Benyon: Sorry, can I just clarify that? I am not saying one should be unprincipled when you negotiate, but you do want to achieve something, and vainglorious attempts at negotiation can be utterly fruitless.

Q306 Neil Parish: It is just my experience of the European Union is sometimes you compromise so much that in the end you haven’t got anything worth dealing with in the first place. But we won’t enter into those arguments this afternoon. I wanted to ask you about these Nature Improvement Areas. You said yourself that you are probably going to have enough funding for about 12 of them, and I think you said there were 78 that had been applied for. How are they going to sit with everything else? You have got AONB; you have got all sorts of things out there; you have got all the stewardship schemes. Are these going to create a twotier system? How are they going to fit in with what is already there? Are they going to make life more complicated?

Richard Benyon: I met with Sir John Lawton this week and we discussed the competition that resulted in the 12 going forward. I am particularly conscious that there are a number-in fact, all of the last batch from 22 down to 12-I would like to have seen go forward in some form or another, but we are where we are. I want to try and assist those that failed to keep the coalitions that supported them together, to keep the enthusiasm and, hopefully, to get some of the work going, and we have some ideas on that. As I said earlier, we would like to see this 12 as just the start.

Your point is well made that there are in existence across the countryside all kinds of groups, and we don’t want to create a new tier of activity that tramples over existing relationships. But the NIAs that I have been round to see since we announced them are almost intoxicating in the enthusiasms they engender. Those are from land managers, as I say, people interested in nature, local naturalist groups and the like, and local communities, and they are about people as much as they are about wildlife and flora and fauna. It is about engaging people. I think they will prove to be extremely successful sitting in a different place to AONB boards and local authorities’ ecology policies, although all of those will be wound up in them. And for me to try and explain it across 12 incredibly different areas, from South Yorkshire, which is seeing the restoration of former mines and degraded landscapes, to the top of the Wiltshire Downs, where landowners are going to work together to create a network of dewponds involving schools and wildlife corridors, to another area I have seen in the North West, where in a relatively short space of time you have an incredibly varied landscape from foreshore to the low hills close to the Lake District. These are exceptional landscapes where we can make a quantum leap in the improvement of the natural environment through the partnerships that have been set up there. I think this is going to be a trailblazer and whoever is in government in future will make sure that these continue, because I am convinced that they are going to be a real success.

Q307 Neil Parish: Further to that then, I see some of the schemes are in designated areas, AONBs and others, and some are not. If you have a designated environment improvement area in a nondesignated area, do they then start to have the same planning, like with the AONB and all the rest? This is what I am trying to tease out. Do they have any statutory powers or are they just basically enhancing nature? How does it work?

Richard Benyon: I am going to ask David to give some more detail on this, but we were really keen to get this into the NPPF and get this understood-its relationship in terms of planning. It has caused some concern in certain areas. It would have caused concern if there was no mention; it would have caused concern if there was some mention, so we want to make sure we get this right. I will get David to explain it in more detail.

David Cooper: Nature Improvement Areas don’t have a statutory status in their own right. The idea behind them is to really harness all of the efforts going on in that area-as you indicate, there is a number in different places of existing initiatives and efforts -because these are areas of particular need and particular opportunity to restore nature. What the NPPF has said is that local planning authorities, where they wish to do so, can then recognise those Nature Improvement Areas in their plans. So that is where they will have some weight in terms of the planning system, but it is up to local councils and their own local plans to determine what that weight is and in what way they should have any weight in planning. That is left to local discretion. That is how the statutory framework works around them, but they are really areas just to coordinate and bring together, as the Minister said, a wide range of interests and activities to harness that and focus it. Professor Sir John Lawton in his own comments said that the quality of the partnership work that has been demonstrated absolutely shows that at this stage.

Q308 Neil Parish: My last question on this is that you, Minister, are very enthusiastic, I think quite rightly so, about these schemes. Are you convinced that the voluntary sector and the local authority will help to deliver these and engage, not so much necessarily just with finance but with actually delivering the schemes?

Richard Benyon: As with all things, some will be more successful than others. As part of my discussion with Sir John this week we agreed that very often in each scheme that was successful and those that, sadly, weren’t, there is a really enthusiastic individual or group of individuals who show exceptional leadership. They might be from the local authority, they might be from the local land manager community or they might be from a local NGO, but they are key. They may cease to be part of that group in years to come and one hopes that there are others who follow on from them, but it is that sense of leadership that is really important. One of the most exciting ones that I saw was a farmerled proposal, which is going ahead. That had the leadership of three people, and the group of people that I met-there were 40 or 50 people in the room-was just the surface, because local schools have been involved and governors and teachers of local schools are part of the board. It is really impressive to see this, but the leadership is coming from two or three people, and if that leadership was to go for any reason, as with all local initiatives, would there be other people to step in? One hopes so.

Q309 Neil Parish: Finally, the funding for more of them: are you expecting that to come from the Treasury or are you expecting that to come via CAP reform or what?

Richard Benyon: I have looked down the back of the Defra sofa on every conceivable occasion. This is a real priority for us. We think it is effective on so many levels and fulfils another ambition that we have, which is reconnecting people with nature-a key part of the White Paper. And so if there are more funds available there will be. I am really pleased how Natural England not only have helped in this process and steered through the competition-and Sir John is very complimentary about them-but are also assisting some of those NIAs that did not quite make it to achieve at least some of what they were proposing to do. So it is not just Defra’s sofa that is being looked down; it is every conceivable part of the Defra family. If we can find some more money to extend this in years to come, to be perfectly honest, I want to see how these work, so I would not want to do it immediately. But in a year or two’s time, if we had the funds I would like to see more. If not, we might have to wait until the next Spending Review.

Q310 Chair: Could you just clarify what you said in answer there about making a quantum improvement in areas like the Lake District? What did you mean?

Richard Benyon: When I was looking at this one in Morecambe Bay, the ambition of the local group ranged across a whole load of species and landscape features. For example, they have a very rare butterfly there and they want to enhance its habitat so it can connect with another habitat not very far away, precisely in the way that Sir John Lawton described in "Making Space for Nature": stepping stones. They are working with local volunteer groups to clear areas of degraded woodland and scrub to try and improve the habitat for other species of, as well as butterflies, birds. The foreshore has certain challenges, and they are not very far from a large centre of population in the North West, not least Liverpool. A lot of Liverpudlians go to that part of the country for their holidays, so they want to engage with city dwellers as well as local people with this exceptional landscape. That was being led by the AONB-Mr Parish’s point exactly. The AONB was the organisation that brought a whole range of different stakeholders together to achieve what I think will be an exceptional result. And we will see more wildlife, a better protected landscape, but one that fits into a wider context that Sir John in "Making Space for Nature" outlined, which is that we need to see more, bigger, better and joined wildlife sites. So improving those particularly designated SSSIs and others, nature reserves and those sorts of things, buffering them with perhaps some agrienvironment round the outside to see that those species develop, joining them up with other wildlife sites through a strategic landscape view and you are starting to get-

Q311 Chair: Would you also look at, for example, getting rid of Himalayan Balsam in SSSIs where it should not be growing?

Richard Benyon: There is one NIA where one of its key issues was dealing with invasive species, but I cannot remember the details of it, so absolutely, yes.

Chair: Good.

Q312 George Eustice: I wanted to touch on the issue of planning and the National Planning Policy Framework, which has obviously now gone through. I know there have been some concerns expressed that it did not give enough emphasis to biodiversity and we all know it has been a long debate. But do you think it should have included a stronger reference to ecosystem valuation and valuing natural capital within that if we really want to encourage it across Government? I know it touches on biodiversity and says it is important and should be a consideration, but should it have explicitly talked about using these markets to evaluate planning?

Richard Benyon: The question is whether the planning system is the best way of levering those markets into existence, and I would question that it was. I think it is important that the NPPF made certain clear statements in terms of the natural environment, sustainable development being one of them, and gave a clear underpinning of the institutional aspects of NEWP, which are NIAs, Local Nature Partnerships and others. We think that is the importance. I would be interested to know how you feel the NPPF could have promoted better ecosystem markets

Q313 George Eustice: I suppose, if, for instance, a developer wants to build a road or an industrial estate, which is going to have an environmental cost in terms of the biodiversity in that area, there is a very clear mechanism by which a local authority can say, "Yes, we will allow it. However, there needs to be something done in mitigation. The value of the capital that this project will destroy is X, and therefore we want you to compensate by doing X somewhere else". At the moment it is loosely through 106type agreements, but not in an effective way.

Richard Benyon: The Prime Minister made a speech about three or four years ago to the Wildlife Trusts about biodiversity offset. We have taken that into Government through the Natural Environment White Paper and we are now trialling biodiversity offsets in six areas. We think this is going to be a success. This is going to see a net gain for nature and it is going to allow the impact of development to be offset, but in the locality. I think that is really important. Where biodiversity offsetting has happened elsewhere in the world that we looked at, it has been rather hard to compare it precisely with the United Kingdom or certainly England. In Australia, for example, you can rewild areas, and that has happened in the United States; it is less clear here. But we do think for a clearly measurable cost you can have a clearly measurable gain, and that is what we are seeking to achieve.

In terms of the wording in the NPPF, conserving and enhancing the natural environment is very clearly set out in paragraph 109 and right through that chapter 11 there are references to how planning permissions can or should be allowed or refused that take into account these principles.

Q314 George Eustice: Yes. Did the Department have quite a lot of input? Obviously, DCLG would have led on this. Did you have quite a bit of input though to ensure that there were enough powers to protect the Nature Improvement Areas, for instance?

Richard Benyon: We worked very closely throughout this process. Despite some of the publicity surrounding the publication of the draft and then the weeks and months afterwards, it has actually been a very positive process. I think to get measures such as "The planning system should contribute to and enhance the natural and local environment by … minimising impacts on biodiversity and providing net gains in biodiversity where possible, contributing to Government’s commitment to halt the overall decline in biodiversity, including by establishing coherent ecological networks that are more resilient to current and future pressures" not only shows a commitment to the natural environment that anyone from the CPRE through to the National Trust could wish to see. It also futureproofs this, because what we want is to protect and enhance the natural environment in the future. We recognise that with climate change we are going to have to face this. We are going to be facing a changing landscape in certain parts of our country, and we want to see it ecologically coherent. So there was very close working between Ministers in both Departments.

Q315 Richard Drax: The National Planning Policy Framework established the principle that compensation will enable developments with harmful biodiversity impacts to proceed. Why does the NPPF not mirror, or reference, the NEWP’s approach of using offsetting to ensure that these harmful effects are lessened, reduced or even got rid of altogether?

Richard Benyon: As I said a moment ago, we are trialling biodiversity offsets. We think that is the right way forward. There was huge enthusiasm, when we sought applications, to be one of the six pilots. We have developed them across six areas, which will, for example, see a pilot in Doncaster that hopes to use offsetting to deliver projects within the Council’s proposed Biodiversity Opportunity Areas, the Humberhead Levels, the Dearne Valley Nature Improvement Area. There are some in Nottinghamshire, Norfolk, Warwick, Coventry, as well as Devon and Essex. These will show us how successful we can be in trying to get, as I was saying to Mr Eustice, a net gain for the natural environment so where developments take place there will be a clearly quantifiable loss, and that loss will be able to be offset somewhere in that locality, in that local authority area, and so people will be able to see a benefit from it. From this will develop thinking that may see major infrastructure projects being offset in ways that will make them a lot more amenable to public opinion when they see damage or loss to their local natural environment.

Q316 Richard Drax: How will the offsetting be monitored by Defra?

Richard Benyon: It has to be transparent; it has to be clear. I think you spoke to Professor Hill, who is a real expert in this. The whole concept of biobanking and the calculation of the credits is key so a developer knows clearly what they are going to have to provide over and above the usual 106 agreement; so that the public know that this is not a licence to trash, not some cunning wheeze to allow developers to get round the planning system, but that does provide a net gain for the natural environment, and that it is not, as someone was quoted when the Natural Environment White Paper was published, about valuing the worth of an otter over the value of a hedgehog. That is the ludicrous end of some of the lack of understanding about biodiversity offsetting, which will become, I hope, clear as we see these pilots carry forward.

Q317 Barry Gardiner: Minister, I want to briefly go back to what you were talking about before in terms of United Utilities. Do you see a way in which Defra can ensure that the approach being adopted there for companies to undertake individual ecosystem services projects to deliver favourable environmental outcomes can become the default across the sector within, say, the next 10 years or so?

Richard Benyon: Yes. I am convinced that this is the way forward. Not every water company has uplands where you can clearly measure the improvements. This is a really important point. When you put water through a water treatment plant you can measure its quality going in and you can measure its quality going out and you can make an assessment of the success or failure of that asset. When you are using nature, it is less precise and some of these ecosystem services, upstream solutions, will fail, and we have to have a system of regulation that accepts that some will be more successful than others and some will take longer to work than others. We have levels of particulates that come through our water system due to human activities years ago, and so getting nature to clear that up is not going to be something that happens overnight. But our understanding and expertise about how to improve water quality is dramatically increasing, and we will see this as a clear pattern going forward in future years. Regulators have to be brave; Government has to give a clear steer; water companies have to realise that this is the way forward-and they do. We have to recognise that this is not just about Dartmoor, about the Lake District. This is about Thames Water’s aquifer. It is the work that they are doing. It is work that Wessex Water, for example, have been doing as well, and also about point source pollution. Water companies, or the Environment Agency, have been pretty quick to see where problems are occurring. It is about interfacing with the polluter to make sure that they change their behaviour as quickly as possible.

Q318 Barry Gardiner: Sure, and, of course, the regulator will also have to be more understanding, because the one thing that companies like building the concrete and steel processing plant for is because it affects their capital assets and it affects their company’s value and rate of return and so on. So the regulator will have to look closely at those issues as well, won’t it? Are there instructions that you have given to the regulator or that Government will be giving to the regulator in that way, so that you are not looking at the financial side askance, because they are doing what we want in terms of green infrastructure?

Richard Benyon: You are absolutely right. The way the system works is to encourage water companies to invest in infrastructure, and then it gets on their RCV; their performance has traditionally been judged like that. I think the die was cast at the last price review, at which Government would have given a strategic direction to the regulators, and we have started to see these schemes moving forward. There has been a lot of work going on between water companies and the regulator and Government, and later this year Defra will be publishing its strategic direction paper-I cannot remember the precise title of it-for Ofwat and there will be a very clear view in terms of seeing more of these schemes being incentivised for the future.

Q319 Barry Gardiner: Great. Now I am going to ask you whether you are prepared to go one stage further. We have talked about setting up a proper market for ecosystem services within the water industry, and you have said over the next 10year period you would like to see that roll out as the default option. What about a mechanism that could place requirements through the regulatory regime on licensed companies to achieve biodiversity improvements or to reduce biodiversity loss in areas from where they source their water supplies, potentially on a catchmentwide basis? Is that something that we can begin to think about, so that we move from simply a market mechanism to positive incentives for biodiversity improvement through the regulatory structure?

Richard Benyon: I think one of the trailblazers here is SABMiller, a brewer in Africa who has protected a large area of forest in the DRC, because of making the link between the water it needs for its brewery and where that water comes from. If that can happen on that scale, it should be happening everywhere, and we want to see those kinds of decisions being taken. They are, to an extent, already: Vittel has done that with farmers somewhere in England where they take their water from, so yes. How do we, as Government, make sure that happens? That is what the Ecosystem Markets Task Force is tasked with doing. But we want to see this happening soon and that is why we are really driving this through this organisation.

Q320 Barry Gardiner: I am looking for something a little bit more than the ecosystem market, because what this would be doing would be imposing, through the regulatory structure, an obligation to improve the biodiversity in an area. I put it to you as something that the Department may wish to consider further as it develops along those lines.

Richard Benyon: In the context of a Government that wants to have a light hand on the tiller of business and wants to be better regulators rather than overregulators, there must be things we can do in that direction. It shouldn’t just be considered to be part of its corporate responsibility reporting. Where it is most effective is when businesses discover that they have to get this right for their own purposes. What CocaCola are doing in terms of water in many of the countries where they produce their product is precisely this. They want to be, I suspect, seen as a good corporate citizen, but they are also doing it because they know it makes financial sense. If you are protecting a forest or an upland area in England, you are protecting biodiversity; you are enhancing biodiversity.

Q321 Barry Gardiner: Moving swiftly on, you have talked about a light regulatory touch. I want to talk about your light regulatory touch on peat and the fact that you have allowed us to go on up until 2030 before you reach the target-and even then it is only a target-for phasing out peat. This has been heavily criticised by RSPB and the Wildlife and Countryside Link and others. I am sure you have been given all the figures about the carbon sequestration of peat lands in the UK being greater than all the forests in France and Germany put together and how important peat lands are, not only as carbon sinks, but as ecosystems in their own right. Do you not think that 2030 is just the most extraordinary lack of ambition; that it is too light a regulatory touch?

Richard Benyon: When you say I have been criticised for making too long a longstop date for that, I have also been criticised for that being too soon and unrealistic, so you will understand that it is hard to please everyone. Can I just get on the record that that is just for one particular element of it? By 2015, the Government will have got our own house in order and the public sector’s direct procurement of peat will have ended. At 2020, we want to see a phase-out for amateur gardeners. That is requiring quite a lot of voluntary impetus, but we are working extremely hard for that. The 2030 figure is for the professional growers. What they want is a clear direction from Government; business is a very fast responder, and we are starting to see alternative mediums and the infrastructure that supports them being looked at in more detail. Alan Knight, who is heading up our task force on this, is going to report soon with some suggestions on how to make this happen. He is very able. He has done this in other fields, and I have great faith in the task force that he is leading. Is it a lack of ambition? We want it to be effective; we want it to work. It is not easy. It is not easy, but you are right that peat is the most important terrestrial sequester of carbon, and we want to make sure that we are phasing it out and that we are protecting our peat bogs. In the NPPF, you will see a clear direction as regards to applications to remove peat in the future.

Q322 Chair: Should we be aiming to produce more sustainable plants rather than exotic plants that require peat?

Richard Benyon: I was in Sussex a few months ago looking at the big growing operation that goes on there on the south coast, and huge advances are taking place in terms of peat use or lack of peat use and also using less water and hydroponics and this sort of thing. So there are great advances. We want to make sure that Government is supporting it with research, but we also want to make sure that we are, frankly, keeping our minds on food security. These are organisations and companies using peat that are producing vegetables in a highly competitive market. We do not want to drive those businesses overseas where they have a much more relaxed attitude, but we want also to make sure that whatever we are doing-which is much more ambitious, I have to say, than some other countries not very far away-we are working with those countries to make sure that they are raising their game too. I entirely concede that we are not going to satisfy everybody on this, but we will-

Q323 Chair: I am trying to finish before the vote, but I would like to mention two other things before then so we can release you, otherwise we will ask you to come back. SUDs: is there any reason why you did not use the Water White Paper to set out decisive action to promote the use of SUDs or even the Natural Environment White Paper? You do say in your paragraphs 282-283 that the forthcoming Water White Paper will consider "mechanisms to encourage the retrofit of SUDs on both community and individual property scales". But, as we discovered when we questioned you on that, that was not the case.

Richard Benyon: We are taking forward the SUDs provisions in the Flood and Water Management Act and these will-

Q324 Chair: What stage are we at? Has the consultation finished? When will the regulations be published?

Richard Benyon: I will ask David. I confess I was not expecting to answer questions on SUDs today.

Chair: It is in the Natural Environment White Paper.

David Cooper: The consultation has recently ended, and so we are working through all the responses to that consultation about the issue you raise. Of course, there are many different views expressed from different stakeholders, local authorities and others, so they are being worked through at the moment. In principle, sustainable urban drainages systems can provide lots of benefits, not only in terms of managing drainage, but if they are done in ways that create environments for wildlife and habitats and recreation and so on. So the principle of using SUDs to achieve multiple benefits is highlighted in the Water White Paper and the Natural Environment White Paper.

Q325 Chair: I think the Committee is entirely in agreement with you. Will it be in the draft Water Bill and when might we expect that?

Richard Benyon: You will be seeing the draft Water Bill in the very near future and the details of it will be apparent then. We are hoping your Committee will give it the prelegislative scrutiny it deserves, and I am sure these issues can be raised. There is a lot in the Water White Paper that touches on this, not least the Green Infrastructure Partnerships, which are progressing successfully and we are starting to see new thinking coming in. The whole concept of sustainable development is going to gear up the technologies of this, because nobody is going to be able to build houses in areas that are water stressed or where there is flood risk without considering the impact those developments will have on the natural environment. So we will be using sustainable drainage systems and also wider issues such as planting trees to protect communities.

Q326 Chair: You do mention in those paragraphs the aspect of retrofit. Is there any reason why you are not also consulting on the automatic right for developers to connect to the water supply system, given that this can have an implication for sewerage, diffuse pollution, road runoff etc?

Richard Benyon: There are two issues: the right to connect in sewerage and the right to connect to public water supply. We wanted to make sure the NPPF was published before the final provisions were made clear, and we will do that.

Q327 Chair: So you will consult?

Richard Benyon: Yes.

Q328 Chair: Minister, just one thing: you mentioned there was £92 million that the Government has identified for catchment management systems. Can you just confirm that that is additional money to, for example, the £12.9 million that was spent in 2009/2010 on delivering the programme? This is additional money.

Richard Benyon: The £92 million is new money that was announced when we announced our catchment management scheme about a year ago. There was a small additional amount that had been previously announced, and I want to be absolutely clear at the time I was not doubleannouncing anything, so the £92 million is new money.

Q329 George Eustice: On peat, and the idea of reducing the use of it, cutting back on it has been talked about for decades, certainly as long as I can remember, but do you think we need to do more to reuse and recycle it? It seems to me that that is probably a better solution. The problem with some of these things is you could have, as you talked about, hydroponics or things like rock wool, but you have disposal problems even with some of those other mediums.

Richard Benyon: That is one of the reasons we have to be slightly careful about just thinking that as of a certain date we are just going to say, "No". There are some people who have advised me that we should have a horizon of just a year or two, and it is up to the industry to step in, but we could not possibly have done that. The technology of recycling and the creation of other growing media are moving very rapidly and I am quite convinced that business will cope with it. We have to set realistic timetables; we think we have. They are too long for some and too short for others, but what we want is an effective ending of the use of peat. That is why we have given these three timelines on it, balancing that, of course, with the need for food security as well as the environment.

Chair: Minister, you have been most generous, and Mr Cooper, with your time and we thank you very much indeed for participating. We will end the formal session. We are expecting a vote, but if colleagues could stay we will carry on with our normal business, if we may. Thank you very much indeed, Minister.

Richard Benyon: Thank you.

Prepared 25th April 2012