Environmental Audit Committee - Minutes of EvidenceHC 202

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Oral Evidence

Taken before the Environmental Audit Committee

on Wednesday 6 March 2013

Members present:

Joan Walley (Chair)

Peter Aldous

Martin Caton

Katy Clark

Zac Goldsmith

Mark Lazarowicz

Caroline Nokes

Dr Matthew Offord

Mr Mark Spencer

Dr Alan Whitehead

Simon Wright

________________

Examination of Witnesses

Witnesses: Rt Hon Mr Owen Paterson MP, Secretary of State for Environment, Food and Rural Affairs, Rt Hon Mr Oliver Letwin MP, Minister for Government Policy, Cabinet Office, and Nigel Atkinson, Head of Sustainable Development, Department for Environment, Food and Rural Affairs, gave evidence.

Q41 Chair: First, a very warm welcome to you, Secretary of State. I believe it is your first appearance before the Environmental Audit Committee. We are very pleased indeed to welcome you here, together with your colleague, and also to welcome back, I think for the third time, the Cabinet Office minister. To give you some brief background, what we want to do-given that this is a cross-cutting Select Committee and we are looking at all Departments, but looking at the way in which Defra is the co-ordinator and the supremo on green issues-is try to get some grasp of the Prime Minister’s ambition of making this the greenest Government ever, and how that is being implemented on the ground through your work at Defra. We also want to consider the co-ordinating role that you have and the way in which that ties in with your colleagues through the Cabinet. We would like to give you an opportunity, first, to tell us how those green credentials are being played out in practice.

Mr Paterson: Thank you very much for inviting me along. May I introduce Nigel Atkinson, who is Head of Sustainable Development at Defra and does sterling work on this issue? I would love to give you a very quick run-through of where I think Defra is going and what we are doing. The first absolute basic idea I want to get across is that I am very clear that Defra’s two main priorities are to grow the rural economy and to improve the environment. Alongside that, which does not quite touch this Committee, our priority is to protect the country from animal disease and plant disease. I am absolutely clear that is where we should be going.

I used to travel a lot when I was in business and I have been to a large number of countries, and I was stunned by the experience of seeing absolutely wrecked environments at the back end of the Soviet Union. Going to somewhere like Albania shortly after Enver Hoxha had happily disappeared and seeing brooks, black with oil, running into rivers has seared itself on my memory. I am completely clear that we cannot improve the environment if we don’t grow the economy. It is only a growing and prosperous economy that can afford to spend proper money on its environment, and I think the two absolutely go together. Also-the other way round-you can’t grow the economy if you are not improving the environment.

There are a couple of brilliant examples from the first week I arrived at Defra. I went to Wallasea Island in Essex, where you had several conundra. First, miles away, there is a problem directly under our feet: Crossrail digging out 4.5 million tonnes of gravel and clay from the tunnels, which had to go somewhere. There you had a massive infrastructure project, probably the biggest infrastructure project in western Europe, delivering enormous economic and environmental gains, if you think of the convenience it will bring to millions of people, but a serious environmental problem with the 4.5 million tonnes. Some distance away, there was another problem in that the sea walls around Wallasea Island, which have been protecting about 100 acres of good agricultural land, had got to the state where they were going to cost too much to be repaired further. You had the sad prospect of losing the agricultural land but, much worse, losing the sea walls could have endangered the whole river system with very significant, not just environmental, but economic consequences.

What I saw was the most brilliant combination of everything. The 4.5 million tonnes is currently being taken down to Wallasea Island. Serious infrastructure has been put in-a special ship has been bought; a quay has been built at Wallasea. That clay and gravel is being used to shore up and create a sort of pillow effect to act as a barrier to the sea. The agricultural land, sadly, will be lost, but instead there will be the most enormous bird reserve built that, in a few years, we hope, with the full co-operation of the RSPB, which is busy on this, will bring in probably 100,000 visitors, so a whole new economic activity will emerge. They will not be growing wheat or sugar beet, but there will be a massive visitor attraction and an enormous enhancement of birdlife. I thought that was an interesting example of how you can combine the impact of a massive project designed to improve the economy, which has significant environmental impacts of its own, in an imaginative way.

A couple of days later, I went to Nottingham and met Chris Smith of the Environment Agency. There had been the completion of a £45 million flood defence scheme that had been beautifully designed-very good architecture, there is a First World War memorial, all the stonework, beautifully done-but, significantly, 16,000 houses protected. So there is a straight eight-to-one payoff on that. What nobody had told me until I got there was that, on the other side of the river, there is 500 acres of land that is currently blighted, which no one has invested in for decades and will now be freed up. Again, you see the balance of improving the environment and growing the economy. I see the two as inextricably mixed and not mutually exclusive. That is one of the key facts I would like to get across to the Committee. Sorry, I-

Chair: No, do carry on.

Mr Paterson: Before I finish I would love to run one idea past you. Yesterday I went to the most brilliant launch of the Ecosystem Task Force report. One of the ideas, which I would be very interested in the Committee’s reaction to, is for getting away from the sterile pillow fight between either developing a building or extending a farm or adding a bypass that might cause damage around a village and protecting an environmental asset-the word "newt" frequently appears, or bats, or it might be some wonderful trees or whatever. At the moment there is no way to let the steam out of the kettle. The development is often wanted and is key to local growth of the economy, but often local groups come in with very strong feelings to defend the environmental asset. You end up frequently going to court, there is a long and expensive sterile debate, and frequently what happens is there is damage to the environmental asset.

What I would like to run past you is the idea of offsetting so you get the best of both. First, you try to mitigate the environmental damage, but if you can’t-if there is only one route for the bypass or if the farmer’s dairy has to be extended into the pond-you say, "Well, the natural asset has a certain value. The newts have a certain value. The bats have a certain value. The trees have a certain value. We will replicate that. If we can’t mitigate the damage, we will replicate that somewhere nearby". I would like to see that added to an existing ecosystem. If it was a housing development, I would not want a little pond, because it tends to get filled up with supermarket trolleys. But I think that is something that is well worth looking at, because what was so fascinating was that here are some very senior businessmen let loose to look at trying to put a value on natural assets, and their first priority is to come up with offsetting, which is something I am keen to progress.

Q42 Chair: There are lots of areas where we want to drill down in detail and I also think that the suggestion or proposal that you have just shared with us is very much something that has been looked at in Europe in any case. But going back to this issue about the greenest Government ever and where the Government stands and where its vision is and how it implements it, I think there is a difference between doing something from an environmental starting point and then seeing how that can be worked through to business policies or Treasury policies or different policies that, on some occasions, seem to be going ahead without any recourse to environmental considerations. Given that you are the supremo inside Government for promoting all this, we would like to get an idea of where you stand on some of those issues.

I will give you one small example. Yesterday I understand that No. 10 Downing Street won an Ecobuild award for one of the most improved sustainable properties anywhere in the country, which is good news and congratulations to all involved, but one of the issues that follows on from that is the Government’s attitude and policy in respect of new-build homes. Take, for example, the Code for Sustainable Homes. One of the things where we are looking for a clear statement from the Government is that presumably there will be no watering down of that Code for Sustainable Homes. How do you, together with your Cabinet colleagues, together with DCLG, link in to make sure that, where we are going to be building new homes, we do not shore up problems for the future because of the lack of sustainable development standards in the construction of those homes? That is the kind of issue where we need to have a feel of how you, as Secretary of State, are taking that forward.

Mr Paterson: Planning obviously is DCLG, but there has been no dilution of the standard of home building at all.

Q43 Chair: No dilution of the Code for Sustainable Homes? Would you flag that if there were to be?

Mr Paterson: Yes. This has not been raised with me by anyone as an issue. We are clearly committed. I talk to Eric Pickles on a regular basis. I talked to Nick Boles yesterday about this. It is quite clear that we need to build houses, but we need to build them in a sustainable way, and that is where I get my offsetting idea. I think this is really valuable, because at the moment there is a fear of development because of the potential of not just economic but environmental damage, and I am keen to get this idea across. I do not see the two as being mutually exclusive; the two go together.

Q44 Chair: You would not see any watering down of that?

Mr Paterson: No. I think it is really important we create a system where you bring the two in parallel.

Q45 Chair: We would not be forgiven as a Select Committee if we did not ask you, Secretary of State, given the concerns that have been raised, about your views on renewable energy and climate change. I think this is your opportunity to perhaps put the record straight on your views on that.

Mr Paterson: I was absolutely delighted yesterday that the Ecosystem Task Force’s second recommendation was anaerobic digestion. It is their No. 2, "Closing the loop using farm waste". We throw away 15 million tonnes of food in this country. There are very significant tonnes of sewage that we could turn into energy. Following the Nitrates Directive, we have something like 8,000 slurry tanks that at the moment just collect rainwater, unhelpfully, and, equally unhelpfully, release methane. I have seen a brilliant example of that quite near me. You could put a cap on every slurry tank. You could keep the rain out, you could keep the methane in, you could generate energy and you could create a very good by-product, bagging it as fertiliser.

The direct answer to your question is that climate is changing the whole time. I am all in favour of renewables as long as they run with the flow of the local economy. In rural areas I am very enthusiastic about anaerobic digestion, which generates energy from waste and delivers power locally. One of the big problems we have with some projects is that the power lines cause very severe environmental damage. I am very keen on local power generation and I am particularly struck that the Markets Task Force came up with anaerobic digestion, which is something I am working on with DECC.

Q46 Chair: But anaerobic digestion is not the only form of renewable energy. There are wind turbines. Looking at one of the comments you have made in the past, I understand you said, "These wind turbines are being built because of subsidy and this is causing huge public consternation. They are inappropriate technology, which matured in the Middle Ages, they are inappropriate for many areas of inland Britain and they are doing real damage". I would like to ask whether you have sought to adjust Government policy on renewables given that comment, which I understand you made in December.

Mr Paterson: Yes, very much so. It is horses for courses. There are areas where it is totally inappropriate to build wind turbines, but I was in Northern Ireland for three years as the shadow Secretary of State and two as the Secretary of State. There is a very significant industry in Northern Ireland building wind turbines because of the very significant constant wind off the north-west coast of the island of Ireland, so the Republic is building a lot of wind farms too. But I think in some inland rural areas where there is not enough wind and the trees grow vertically, which is a pretty good indication that there is not enough wind, that is an inappropriate area to build a wind farm, and there is great local opposition. I think local people should be very much involved in this as well. That is why I particularly pick on anaerobic digestion, which is discreet, can work in rural areas and delivers power locally. The transmission is very important, not wasting power through long transmission lines that are immensely unpopular.

Q47 Chair: I understand, too, that you have said in the past, "I am very clear that GM food would be a good thing". Is that your view on GM food?

Mr Paterson: I think we very much have to look at GM. I said again last week at the NFU conference that the use of GM is increasing across the world. At the moment we have 17 million farmers cultivating 170 million hectares. That is 12% of the world’s arable land. That is seven times the geographical area of the United Kingdom. This is not some crazy, spooky new technology. This is well established in respectable countries-the States, Canada, South Africa, Australia-using this technology, and I think we would be foolish to allow ourselves certainly, and Europe, to slip behind.

I think there are major environmental advantages to this. I talked to the Brazilian Agriculture Minister in Berlin at the summit in January. 90% of Brazilian soya is GM, and he said, "It is very simple. There is a 30% cost advantage, because we don’t spray as much unpleasant pesticide". I think there are real environmental advantages and we should look at it, but obviously there is a big public debate to be had. There are major concerns, and those concerns have to be respected and we should go through all the right processes, but otherwise there is a real danger that we will fall behind and become an agricultural museum.

I don’t know if you heard Farming Today this morning. There was a poultry farmer on it. Non-GM food is now £100 a tonne more expensive. There is going to come a moment when there won’t be enough non-GM food, and I have said on the record it is virtually impossible to eat a piece of meat in London that has not been procured from an animal that was fed, at some stage in its career, a GM product. 85% of animal feed has GM product in it. I think we all look pretty healthy, looking around this room. We should not be frightened of it. We should respect the concerns, and I think we should look at it seriously.

Q48 Chair: Just while we have this opportunity to put your views on the record, could I ask you about shale gas?

Mr Paterson: Shale gas?

Chair: Yes. I believe you are a great supporter of shale gas.

Mr Paterson: I am most enthusiastic about prospecting for shale gas. The first week I was in I asked the Environment Agency to establish a one-stop shop, because there are about six permits required for those who want to prospect under EU legislation. There is one to drill and one to extract and one to use water and one to dispose of water and all that sort of thing. I wanted to make it easy for people to come to the UK and look for shale gas, because we have possibly extraordinarily large volumes of it. The Marcellus field in America has had dramatic impacts in the States. There has been a reduction of energy prices in America from about $12 a unit to $3. That has closed whole industries in China. There are industries coming back from China because they are no longer competitive with the States.

There are obviously environmental concerns, but I have asked people and there was not a single application to the EPA last year for a case of water pollution due to shale gas drilling. We have been prospecting in my part of the world, in Shropshire, for hydrocarbons for centuries and delivering very fine industrial products to the south, and I would like to carry on. I am very happy to have shale gas prospecting in my constituency.

Q49 Chair: We are going to have to move on and bring in the Cabinet Minister, but just finally from me, we did our wildlife crime report some considerable time back. Could tell us when we might be likely to have the Government’s response to it?

Mr Paterson: Soon. I will check that in detail with my officials and come back to you.

Q50 Caroline Nokes: Thank you, Secretary of State, and apologies. I have to do a DL this afternoon, so I am going to have to leave before you finish giving your evidence. I wanted to talk about the Government’s commitment to embedding sustainable development and where you feel that the Government has got to with that commitment and what more needs to be done.

Mr Letwin: This is a subject we have discussed in the past, and I am happy to say that I think we continue to make some significant progress on this. The question in the end is a cultural question inside Whitehall. What we are trying to do, when anybody is making a decision about anything significant that has long-term implications-I suppose with the exception of absolutely life-or-death emergency decisions of a military or civil defence kind-is get to the point where it is a completely normal thing that not just the Ministers but the officials ask themselves the question in a very rigorous way not only, "Will this achieve whatever particular effect we are trying to achieve with this particular measure?" but, "What other consequences will it have for future generations, economically, ecologically and socially?" That means bringing to each one of these discussions a framework of thought that looks at the effects of the measure on social capital, ecological outcomes, pensions and debt and so on; the long-term economics.

The next question, "How do you achieve that cultural change?" as I think I may have said to the Committee before, is the $64,000 question that Governments around the world have been wrestling with for a very long time. It is very difficult to take this great super-tanker and shift it so that it reaches Rio de Janeiro rather than New York, but we have developed a series of tools for making it more likely that the cultural shift will occur. The tools are not the end product. They are the means, but they are nevertheless important. One of them, which you may want to dwell on in more detail later in this discussion, is the sustainable development indicators because our experience-we will come on to those, yes.

In general, I should say then that our experience of Whitehall, and I think more or less the experience of Governments over a very long period, both in this country and elsewhere, is that what gets measured tends to have much more importance in people’s minds than what does not get measured. Perhaps it should not be so, but it is so. Therefore, having a series of indicators that are present in people’s minds, that are not just measures of GDP or today’s unemployment or whatever it may be, important as those are, is an important way of changing the culture. We will talk more about the detail of that later.

The second tool that we have been developing is the use of our business plans as a tool that is a valuable way of conveying this cultural message around Whitehall, because permanent secretaries and Secretaries of State spend a lot of time attending to the question of whether they are fulfilling the business plans they have agreed with the Cabinet Office and the Prime Minister and the Deputy Prime Minister. I am very happy to talk in more detail, too, if you would like to do that, about what we include in the business plans.

Q51 Chair: I think we are more concerned about the vision at this stage.

Caroline Nokes: The vision and I think particularly the indicators and how they are going.

Mr Letwin: On the indicators, the development of the indicators?

Caroline Nokes: Yes. How effective have they been? Are they working? Have they demonstrated to you yet that the approach that you are taking is measurable?

Mr Letwin: The stage we are at on the development indicators is that we have issued a consultative document about our proposed new set of slimmed-down and, we hope, much more perspicuous indicators. We have received a large number of responses to that. We are currently going through those responses and we intend to reach a conclusion and produce a set of indicators in the summer, and from that moment onwards, this will begin to feed through. They go alongside the business plan, and they also go alongside a third thing, which is the changes in the Treasury’s Green Book and in the impact assessment methodology, all of which sounds frightfully anoraky and boring, but is an important-

Q52 Chair: We will come on to that. I think what we simply want to know at this stage is how you know that what you are doing has been successful, how you are measuring it, and to get an understanding of how you are implementing the vision that there is.

Mr Letwin: I do not think anybody is in a position, unfortunately, to measure a cultural shift in Whitehall. I am more than open if the Committee has a bright idea about how to find out whether Whitehall is thinking in this way on every decision. My point is that if permanent secretaries are forced to go through a business plan that includes sustainable development, and-a specific translation to that-if they are forced to attend to sustainable development indicators that are perspicuous, and if every time they do an assessment of a particular project, they have to go through a rigmarole of working out its effect on sustainable development because of the way the Green Book and impact assessments are run, I think you can assume that, over time, that will begin to change the culture. That is what we are trying to do. We are trying to get to that stage.

Q53 Caroline Nokes: This may be an unfair question. Please tell me if it is. If you were to stick your finger in the air to see if you felt that the wind was blowing in the right direction, do you feel that you are making progress towards shifting that culture?

Mr Letwin: Yes, I do. This is not a partisan project after all. It is something that the previous Government and the current Government share as an ambition. But if you go back 10 or 15 years and ask yourself, when people were doing analyses of what they were trying to achieve inside Whitehall, was it a norm that they would quite automatically ask themselves about a project-a school or a road or a new policy about welfare-"What are its impacts on sustainable development?" no doubt it happened, but I think you would have found it a rare commodity. Today, partly because of the work done in the previous administration and partly because of the work we have been doing, and I hope this will intensify over succeeding years, you already get very much the sense-I do, talking widely around Whitehall to colleagues and to senior officials-that they have this in their minds, or are beginning to have this in their minds. If you are asking the question, "Do they have it sufficiently always at the forefront of their minds?" I think the honest answer is no. I think this is work in progress. We are making progress, but it is not all the way embedded yet.

The last thing I would say is part of what happens is not just a culture change on that side but the degree of attention that those of us at the centre pay to it. For example, when I see people about the business plans or when Danny Alexander and David Laws and I are discussing with a particular Secretary of State-not in Defra but in Departments that are much less environmentally focused by their designations-the fact that we are asking these kinds of questions regularly also begins to have an effect. There is both a cultural shift that we are trying to engender through a series of mechanics, which I think is beginning to change the way officials do business all around Whitehall, and there is a top-down thing, which means there is a sense that the centre cares about this. I think the combination of those is beginning to make a real difference, yes.

Q54 Zac Goldsmith: Can you give us an update on the work of the Natural Capital Committee, which has been chaired by Dieter Helm? Specifically, has there been any progress in terms of including the Natural Capital Committee in the national books?

Mr Letwin: I think in a moment Owen should bring you up to date with Dieter specifically. Can I just say, before Owen launches into a direct answer to your question, I regard the work of the Natural Capital Committee as the sort of centrepiece of all this. The National Ecosystem Assessment is crucial, the SDIs are important, the Ecosystem Task Force work is of significance, but in the end what matters is whether we develop, as a country, a sense that, as well as economic capital and social capital, we are trying to develop natural capital. Unless that idea embeds itself not just in Whitehall but in the whole political debate, we will not achieve what we are collectively trying to achieve. I don’t regard Dieter’s work or the work of that committee as a sort of interesting technical add-on, which I fear it is still regarded as at the moment in most of the pages of most of the newspapers, but as an absolutely critical building block.

Mr Paterson: To bring you right up to date, I saw Dieter yesterday at this launch, and I am going to have a meeting with him and his committee soon. We launched this. I spoke at the Royal Society. I am very happy to send the speech to all members of the Committee. We are absolutely full-bore behind this because, if we are going to get on to this system of offsetting, we have to have some system of putting value on environmental assets. What he is doing is absolutely vital. Some of his committee have already been involved in some of this stuff before. I am going to go to Australia to see how offsetting has worked, but his basic work is to provide us with the building bricks of a system.

If we can stick a value on assets-and I think he is going to come up with a system of a cash valuation-we can then possibly get into a market of environmental assets. Going back to my idea of offsetting that I touched on earlier, what I would hope to see is you would have bidding. You would have the RSPB saying, "Great, they are going to build a bypass. This is our chance to enhance our bird reserve 10 miles down the road". You would have the local Woodland Trust saying, "Hang on, guys, no, no, no. We have a brilliant idea to put a new plantation in. We will bid for it as well". But you have to have a currency. Someone has to put a value on these assets so that you have a workable system.

Oliver is absolutely right. My frustration is how long this is going to take. We want to get on with this and fast, and Dieter has a lot of detailed work to do.

Q55 Zac Goldsmith: Is there a timescale on this?

Mr Paterson: Yes. I want to get moving on this. Months; we want to get moving.

Q56 Zac Goldsmith: How long does Dieter think it will take?

Mr Paterson: The trouble is I have loaded him with some other stuff as well and he has a day job; some months.

Q57 Zac Goldsmith: Do you mind if I carry on? I am butting in here.

Mr Paterson: Right. So, have you jumped the order?

Zac Goldsmith: We have. On the chain of command for Dieter, is he answering to you principally? Are you his main point of contact?

Mr Paterson: I want him to report back to me with-

Zac Goldsmith: But technically he-

Q58 Chair: You want him to, or he does do?

Mr Paterson: No, he will. I have asked him to do two things. There is the Natural Capital Committee, which is assessing the value of natural assets, but I have also asked him to work on offsetting as a parallel operation.

Q59 Zac Goldsmith: Formally, what is his relationship with the Treasury? I understood that his department belongs to the Treasury but then works informally with Defra. Is that correct? How does it work? What is the structure?

Mr Letwin: I can help on that. I am going to have to put this all very carefully, but it was crucial that we did not get into the position where the Treasury, which is an extraordinarily important Department, regarded Natural Capital and the evolution of currency for Natural Capital as a sort of foreign body that was to be rejected. It is very important that if we are going to achieve what we want to achieve, they have to regard this as somehow theirs. It was therefore very important that the person doing it carried confidence in the Treasury and the methods that were being arranged around that person carried confidence in the Treasury. Therefore, it was done under Treasury sponsorship. It is also, of course, crucial that it can do its work in a way that is absolutely linked in with Defra. It reports to Owen, but it is not a foreign Defra body. It is part and parcel of the Treasury development and George Osborne himself is very keen that Dieter should produce something that is usable and economically respectable and regarded that way by the Treasury.

Q60 Zac Goldsmith: In the unlikely event that he found obstacles in the Treasury, he would be able to rely on the Secretary of State for Defra to fight his corner?

Mr Letwin: But crucially he would also be able to rely on the Chancellor, the Chief Secretary and me. It is very important.

Q61 Zac Goldsmith: Is that what would happen in practice?

Mr Letwin: Yes.

Q62 Zac Goldsmith: There are no difficulties so far?

Mr Letwin: No. George, Danny and I have all been extraordinarily keen to see Dieter succeed. He has a very close personal working relationship with Owen as well. George and I have both known him for very many years. This is a person in whom we place some faith.

Zac Goldsmith: Thank you. Sorry.

Chair: No, that is fine. We have a series of very specific questions, so I will turn directly to Mr Caton.

Q63 Martin Caton: Secretary of State, you have inherited systems developed by your predecessor, things like the sustainable development reviews of departmental business plans. Do you find these systems are working well, or are you considering changes or additions?

Mr Paterson: This is the first year we have had reporting in annual accounts, and I think it has been a remarkable exercise. Obviously the system could be improved, and I would be very interested to hear your comments, but this was the first year it has ever happened, and I think a lot of very valuable information was revealed. It has been a worthwhile exercise, and we can learn from it. Obviously there will be certain areas we can improve on.

Chair: We are referring to the business plans, not the annual reports.

Mr Paterson: I am talking about the sustainability reporting.

Chair: The individual departmental business plans for all Departments.

Mr Letwin: If you are talking about that, may I answer it? It is the business plans you are asking about?

Martin Caton: We are talking about the business plans. But, as I understand it, the Secretary of State for Environment, Food and Rural Affairs has a responsibility to look at the sustainable development part of the business plans or to ensure that sustainable development is encompassed in the business plans.

Mr Letwin: Yes. The way it worked was that Caroline and I worked together to try to make sure that each Department included an appropriate set of objectives on sustainable development in its business plan. That is now embedded, and we can go through any number of them if you want. As those Departments now come back-and the reason I am answering is that they come back to me and to David Laws rather than to Owen-as we go through the measurement of whether they have lived up to those things, that is a discussion between the Cabinet Office and each Department.

If we find that there are issues about the sustainable development achievements of the Departments then obviously I will immediately go along to Owen and draw him in. His officials are working with our officials to make sure that there is a proper analysis of whether those things are being delivered as we go through. The policy is set, and, unless Owen tells us otherwise, I do not believe Defra is proposing to make any changes whatsoever in it. The challenge now is to make sure that it is delivered.

Q64 Martin Caton: Thank you, Minister. I think that does clarify things, but just to make sure that I understand, the Secretary of State for Environment, Food and Rural Affairs would not have a meeting with other Departments specifically to discuss sustainable development parts of the business plans?

Mr Letwin: Yes, not unless we alerted him to a problem that we had identified, or indeed that his officials alerted us to, and we had talked to the relevant Ministers and then come back to Owen and said, "There is a problem here". Then obviously he would get involved.

Q65 Martin Caton: Have any such problems been identified?

Mr Letwin: Not yet, but I do not discount the possibility that there may be.

Q66 Martin Caton: While we have you here, Minister, can I ask you a couple of questions related to this but about some other inquiries we are involved with? The first is we are about to undertake an inquiry into environmental protection in UK overseas territories. Are our overseas territories covered in any business plans, and, in particular, is sustainability covered in any departmental business plans?

Mr Letwin: That is a very considerable teaser. These are the business plans, and I don’t carry them entirely in my head, but I am not aware of any part of any of the business plans that makes a specific reference to an overseas territory, no. The business plans are largely about the domestic programme of the Government to reform public services, deal with the deficit, improve the economy and so on. The point of the sustainable development sections in all cases is to ensure that, in going about that business, Departments-coming back to our first set of discussions-bear at the front and centre of their minds the question of what are the impacts going to be on the sustainability of the ecology, the economy and society.

The FCO, which I guess would be the most obvious place to have such a thing, is not a Department that has a business plan, because it is not one of the domestic Departments that has a business plan in the ordinary sense. I would guess that the overseas territories, if there were any such plans, would be there. I will obviously ask officials to comb through and make sure that this is an accurate response, but, as far as I am aware, the answer is no.

Q67 Martin Caton: I look forward to hearing any further information you have, but, thinking about it now, do you think it is a gap?

Mr Letwin: No. It is important to understand each tool used for each purpose. The purpose of the business plans is simply to make sure that the Government is going about its domestic reform programme in an orderly fashion, achieving what it sets out to achieve and doing so in a way that bears in mind the social constraints, the environmental constraints, the legal constraints and so on. It is not there to determine our foreign policy or the way we act in relation to our overseas territories and all those things, which would be dealt with in the context of the National Security Council, where we do not have a business plan. We have a continuous weekly effort to deal with our foreign policy and its connections with our defence policy.

Q68 Martin Caton: Thanks for that. I am sorry to hop from thing to thing, but another inquiry that we are undertaking is about accessibility of public services through public transport. It appears to us that in this policy area, cross-Government responsibility is blurred and falls between Departments. Could the business plan review process be modified to ensure that transport accessibility is fully addressed across departmental business plans?

Mr Letwin: I think that is a very interesting suggestion that I would like to take away and think about. Whether it is done through the business plans or otherwise, I think there is a great deal to be said for trying to take a cross-Government view of the accessibility of transport. You are asking a very serious question that I have not previously thought about, but we should think about it, because I see immediately that there are at least three or four Departments that are relevant. I may be wrong, but I suspect at the moment that this is something that is very heavily concentrated in the Department for Transport and not as present as perhaps it should be in other Departments that are relevant. I will take that away and have a look at it.

Martin Caton: Thank you.

Q69 Chair: Minister, it would be very helpful on that, given that we are currently carrying out that inquiry, to have your comments even before we send our comments to the Government for its response back again.

Mr Letwin: Fine. We will arrange to write to you about it. Yes.

Chair: That would be very helpful.

Mr Letwin: I don’t guarantee to come to a conclusion, which I can’t come to individually. I have to talk to colleagues.

Chair: It might be part of shaping the policy.

Mr Letwin: We will definitely revert to you.

Q70 Chair: Thank you. Before I move on to sustainability reporting, Secretary of State it has come to our attention that in the business plan that you have for Defra, there is no dedicated resource for officers to be involved with Defra’s responsibilities in respect of overseas territories. Is that a deliberate omission, or is that something that has come on your radar so far?

Mr Paterson: I think that is an interesting question, and I think I will take it away, as my colleague Mr Letwin has agreed to do.

Chair: Okay, I look forward to the response.

Mr Paterson: It has not been raised with me before. It is a perfectly pertinent question that we should look into.

Chair: It raises the question of how can Defra cover its responsibilities if there is no dedicated resource and it is not open for review and scrutiny in its business plan.

Mr Paterson: I will check that.

Q71 Katy Clark: From 2011-12 I understand Departments were required to report on their sustainability performance in annual reports and accounts. I wonder if you have had the opportunity to go through that. I understand the National Audit Office analysis of the Departments’ annual reports found that only six out of the 15 Departments have reported on how sustainable development is embedded into policy development. Is that something that you have focused on? What are you doing to ensure that there is better performance for the future?

Mr Paterson: This was a very interesting exercise. It was the first year, and I slightly jumped the gun answering the question earlier. There are lots of lessons to be learned from this, and I think Departments themselves will learn and see how they can improve their performance next time. But I think a lot of very valuable information has been published. It is an unprecedented exercise, and I think this was a modest success, but there are obviously all sorts of ways we can improve in the following year. Some Departments did not come up with the right information, some of them found it difficult, but I thought also what was quite interesting in the reports is that some Departments found that the whole exercise was valuable in its own right.

Q72 Katy Clark: But do you think it is appropriate that you give them a nudge where they have maybe not complied with what is expected of them?

Mr Paterson: There is a tricky balance. We in Defra can’t nanny every other Department. They are responsible. There is a commitment that they should report this information, and it is incumbent on each Department to be responsible for its own reporting. There is a delicate balance between how we can help and nudge, but I do believe firmly that Departments are ultimately responsible for their own reports.

Q73 Katy Clark: But if it was the case that there wasn’t full compliance in the future, would that be something that you would feel it was appropriate for you to get very actively involved with?

Mr Paterson: It is a question of balance. I think the Departments are ultimately responsible and I generally do not see it is Defra’s role to be the policeman going around the whole of Whitehall on this. We can set the standards, but it is up to them to deliver. Obviously we will read these reports with interest, and there is a Cabinet Office role as well.

Q74 Katy Clark: One of the specific concerns the National Audit Office highlight is that Departments were least compliant in reporting on waste management. Is that not something that perhaps you think you should be focusing on to improve performance in that area?

Mr Paterson: Very much so. Waste is obviously a major interest for Defra, but there are some areas where we have been very active, such as the waste-paper project where I have been working with the Cabinet Office. I had a meeting with Francis Maude about it very recently. That is absolutely tremendous if we can get that off the ground.

Q75 Katy Clark: But to be effective you have to have a cross-governmental approach, haven’t you? You talked about that in your answer to the last question. Don’t you think that you are central in terms of-

Mr Paterson: Well, take the waste paper. I was going to mention this a little bit later, but I will talk about it now. The closed-loop project I think is tremendous. There is probably 70,000 tonnes of paper required to justify putting up a self-sustainable plant in the UK processing paper. If we can pull this off, that will happen, and we are well down the track on that. I have worked closely with Francis on this, and all the Defra organisations are now involved. There are some other Departments that have been a little slower. I am working closely with him to encourage that. This is slightly jumping ahead, because this is really procurement, but I think that is a case where Defra has taken a direct interest. I have worked closely with the relevant Minister, Francis Maude, and the savings are absolutely phenomenal if we can get this thing moving. It is a really positive project, and it is what we are all about. This is proper sustainable government. Co-ordinating all the waste paper across all Departments and, instead of shunting it off to Germany for export at considerable cost, reprocessing it here for domestic use I would have thought is an absolute model of what we are trying to do as a sustainable Government. It is a really good example. That is something where Defra has been directly involved.

Q76 Katy Clark: You will probably get these questions again if there is not a significant improvement.

Mr Paterson: I am very happy to return.

Chair: We do intend to return and return to issues.

Mr Paterson: I am genuinely interested in your ideas of how we do this. There is a limit to how much Defra can be the busybody chasing all other Departments. They all have their own responsibilities and we haven’t exactly been quiet for the last few months since I have been around. There have been quite a lot of other things going on at Defra. I would be very interested in your idea of the balance of who should be chasing. Your Committee has a very interesting role itself.

Q77 Chair: I think that raises, in a way, the problem that is at the core of all this. When the Government got rid of the Sustainable Development Commission, it put a series of alternative arrangements in place, which were very much introduced by Caroline Spelman with a whole set of very complex arrangements, but we were assured that there was a system whereby-and you mentioned the policeman down Whitehall; that might be a dangerous comparison to use. But whether it is by nudging or by nannying, whatever term you wish to use, the proposal, as we understood it, was that Government was going to take responsibility for overseeing and making sure that the whole vision was connected to the implementation of policy. There was this very complicated set of Cabinet Office and Sub-Committees and departmental business plans, but it was Defra and your position as Secretary of State that had the overall responsibility for this.

It is how all this gets done. Obviously, we have the National Audit Office, but it works to Parliament and scrutinises policy that has already been committed. It does not help with the formulation of policy, it does not help with setting agendas, and what our Committee wishes to do is make sure that sustainable development is embedded. Maybe not now, but there is perhaps a need for further detailed work to be done, because what you have said suggests that it is perhaps not quite working the way it previously was intended to.

Mr Paterson: I think that is a bit unfair. This is the first year this has ever been done, and a very large amount of information has come out of various Departments. Some have been more successful in publishing information than others and we can obviously learn from it, and each Department is committed to this. I think it is a bit unfair on the Government. This has never been done before. It is a remarkable exercise.

Mr Letwin: Can I add something that may help?

Chair: Of course you may.

Mr Letwin: Part of the point of what Caroline established was, as the Committee is very aware, an effort to put all this into the mainstream-not just to have it as something that a particular Department, Defra, was concerned with, but something with which the whole Government was concerned. One of the tools for doing that was this financial-reporting requirement. The financial-reporting requirement is part of the Treasury’s rules about how Departments report. The Treasury is quite a powerful Department, for obvious reasons. The National Audit Office has inspected the performance of Departments, and it has obviously, as you rightly say, Chair, reported to Parliament, because that is its job, but the Treasury also reads the NAO’s reports, and so does the Cabinet Office.

For that reason, I have had conversations in the past few weeks with Danny Alexander about all this, and I can assure you-and you are most welcome to interview the Chief Secretary and verify this for yourselves-that he and his officials are now on to the job of trying to make sure that where, as you say-and although actually the compliance in many cases is pretty high-on emissions, for example, 93% of organisations met the requirement for reporting-on waste, as you rightly say, it was relatively poor. The total was 89%, but the waste incinerator and energy from waste was only 64%, for example. So this was not complete compliance or near it, and that is for the Treasury to pursue.

I do not think it would be reasonable or sensible to ask Defra to start pursuing Departments about whether they are complying with the Treasury’s rules about how they are meant to report financially at the end of each year, which now includes this. It is better that it be mainstreamed and that the Treasury pursue it.

Q78 Chair: I am mindful of time constraints. I think that we have highlighted here an issue where a lot of further clarification is needed. Of course I accept that this is the first year, and you have only recently been in the position as Secretary of State. What I would say from the point of view of this Committee is it would be very interesting-I am sure I speak on behalf of the Committee here-to explore, perhaps in a private session, jointly with the Treasury, the National Audit Office and yourselves, how we can all share and assist with taking this forward, but what I am going to do now is-

Mr Letwin: Just before you go on, may I say, first, that I would welcome that. We would both welcome that, but, in addition, what Owen was suggesting, I think, is quite a powerful point. It would be gross impertinence for us to suggest to the Committee what the Committee needs to do, but we would welcome, if you were willing, your fulfilling an important role here that, as far as I am aware at the moment, through all its years, the Committee has not done, which is hauling individual Departments in front of it to explain how they are complying with all these things, because that would be an additional pressure. The Treasury is a very important lever, the Cabinet Office and Defra can do some work here, but if the Committee hauled people in front of it and said to them, "Why haven’t you complied with the waste reporting?" that would help.

Chair: It might be helpful for you to know that we have already decided that we are doing that, with the support of the NAO, and we are using, as a pilot project in the first instance, BIS-

Mr Letwin: Terrific. Right, I shall warn BIS of this fact.

Chair: -which seemed to be a useful Department to start with. I will come back to this issue about reporting in the private sector, but before I do, I know that our colleague Peter Aldous has to get away for important business, and I want to bring him in on policy appraisal and the Green Book, given that we were on the Treasury just now.

Q79 Peter Aldous: My apologies if I depart straight after I have asked my question. In our session last July we discussed the development of the Green Book and the impact assessment system to make policy design better reflect environmental and sustainability issues. Mr Atkinson, you told us, I think, that later in 2012 you were going to produce a baseline evaluation of the extent to which impact assessments were following the new environmental guidance and identifying the gaps in compliance in Departments. Have you done that baseline evaluation yet?

Nigel Atkinson: Yes, I did. I did indeed, and that work is underway. It will complete in about July of this year, but we do have some interim findings that I can tell you about today. If you will recall, the purpose of that work, the reason for commissioning it, was partly prompted by yourselves because you asked us, given that we had revised the guidance on impact assessments to better integrate the treatment of sustainable development impacts, how we knew that that guidance was being taken up and being effective and making a difference.

That seemed to us to be a very good question, so we commissioned a piece of work that will have the objective of comparing how sustainable development has been addressed in impact assessments since that guidance was introduced, with a baseline period of how they were treated in impact assessments before the guidance was amended. As I say, that work is still underway, but we have completed almost half of it. We started with the more current period, so the period since the guidance has been produced, because we thought that would be of more interest. Of course, it doesn’t tell us anything very much until we have also completed the work on the baseline against which we can compare it.

The researchers looked at something like 400 impact assessments that have been undertaken across Government since August 2011, which is just about when the guidance was amended. They weren’t able to look at all of those in detail. That was simply a huge task. What they did was identify about a third of them that they considered were ones where you would expect to see the fullest and most rigorous, explicit addressing of sustainable development impacts. As I say, although they have not completed that work yet, it looks so far as though the results are showing something like this: about half of those show a good treatment of sustainable development impacts, about a quarter show a treatment of the right range of impacts but perhaps there could be some more rigour in the way they were addressed, and the other quarter are ones where there is clearly some room for improvement and where not all the impacts have been addressed.

We will have to see. Those numbers may change a bit as the work completes by the summer, and, as I say, we do not know what we are comparing against yet, but I think it is probably fair to say that that indicates whether there has been an improvement or not since the guidance was introduced that there is still some room for improvement. One of the things that we have asked the researchers to do also is come up with some suggestions of what we might do differently to engineer the improvement that is necessary, based upon their analysis of what it looks like is going wrong or not working properly.

Q80 Peter Aldous: I appreciate that it is work ongoing and these are only interim findings, but are there any star performers, or perhaps laggers, in terms of Departments or perhaps policies where things may be being done well or not so well?

Nigel Atkinson: I hope we will have some indication of that by July when the work finishes, but I can’t say we have that at the moment.

Q81 Peter Aldous: Will the full results be published in July?

Nigel Atkinson: We will publish the results, yes.

Chair: Thank you very much. Zac, did you want to come in on the Treasury issue?

Q82 Zac Goldsmith: I can do that, but I just have a quick question that I was hoping either of you could respond to. There was a piece in the Financial Times on 3 March, a couple of days ago, and it says, "The Treasury has thwarted an attempt by senior economists across Whitehall to set up a review of resource depletion, climate change and growth to address the concerns of both industry and environmentalists". I do not know whether you saw the piece, but I am sure you are aware of it.

Mr Letwin: To thwart what, sorry?

Mr Paterson: I haven’t seen this.

Zac Goldsmith: "Has thwarted an attempt by senior economists across Whitehall to set up a review of resource depletion, climate change and growth to address the concerns of both industry and environmentalists." I don’t know a great deal about what that review would have entailed or who was leading it, but is this something you can comment on?

Mr Paterson: We are not aware of the review.

Mr Letwin: I have to say that not only am I not aware of the thwarting of this review, I was not aware of the idea of this review, which sounds awfully like a combination of the National Ecosystem Assessment and the Natural Capital Committee’s work.

Q83 Zac Goldsmith: This is particularly a review on resource depletion and the pressure that will apply to businesses. I am probably, like you, cynical about what I read in the newspapers. However, it is the FT, and they seem to have given this a great deal of attention. This is in response to concern by industry, a review of 80% of respondents, businesses, citing resource depletion as a very major concern going forward. But you are not aware of the review?

Mr Letwin: No. That does not prove anything, in my case anyway. I just have never heard of this.

Zac Goldsmith: This is not part of the format today, but I will send it to you and you can have a look at it.

Mr Letwin: Thank you.

Q84 Simon Wright: My question regards sustainability reporting requirements on the private sector. I know Defra have just had a consultation exercise on exactly what companies will be expected to report. Perhaps the Secretary of State can answer this. Why are you proposing to leave it to companies themselves to decide how to measure their emissions and how to calculate an intensity ratio for those emissions?

Mr Paterson: On emissions reporting, it is quite clear. We are going to have a regulation coming into force on 1 October that will require listed companies to publish their emissions. That is done.

Q85 Simon Wright: But why is it being left to private companies themselves to determine the process under which they measure those emissions?

Mr Paterson: I think they are the appropriate agencies to monitor their own activity.

Q86 Simon Wright: Even the process itself and how they go about calculating the ratio?

Mr Paterson: A private company is responsible for its accounts. On the same basis, it should publish its report on its emissions.

Q87 Simon Wright: On accounts, obviously this process is not going to be audited. Why is that, and is that going to lead to questions over the reliability of the data that is actually published?

Mr Letwin: I don’t think that is accurate. This would be part of the annual report and accounts of each company. The annual report and accounts are mandated by the Companies Act-2006 it says here, but the Companies Act at any given time-and the job of an auditor is to ensure compliance with the legal requirements for reports and accounts.

Simon Wright: Including the emissions?

Mr Letwin: Yes. Of course, as in the compilation of stock figures or any other figures, the company may choose any number of respectable methods of calculation, but they would have to satisfy their auditors that it is a respectable method of calculation. This assumes that the auditors are doing their job, but it is on that that we rely for every kind of accuracy in reports and accounts. I do not think there is anything different here from any other reports and accounts.

Q88 Simon Wright: The reporting on the private sector will be specifically on emissions, whereas for Departments, as we have discussed, it covers waste and water usage; sustainable procurement. Are there any plans to examine the scope for including some of those more extensive reporting requirements in the private sector?

Mr Paterson: We have no plans.

Mr Letwin: The Government as a whole certainly does not have a policy of doing so at the moment. I think it is a very interesting question, what further kinds of transparency about the effect, which can be considerable, that companies have on sustainable development and its components should look like. I would certainly welcome the opening up of the debate by the Committee and others. One has to be careful, obviously, because if you ask people to report on everything, you have no effect on anything because you have vast volumes and nobody knows how to deal with it. On the other hand, emissions is not the only critical item, and, as you have seen, in our own SDIs and in own Greening Government commitments we have not just focused on emissions. I think there is some scope for widening the end scope.

I think the experience of corporates-and perhaps this is something that it is more appropriate to ask the Business Secretary than us-so far has been that in general where they do engage in transparency-now mandatory on emissions, before in many cases it was voluntary-that has often focused the board’s mind on something that also turned out to be financially advantageous for them. Saving emissions often means being more energy-efficient. Being energy-efficient often means reducing costs for the same product. Likewise, if you focus corporate minds on the question of, "Are we wasteful on items other than energy?" it may well be a helpful synergy between what is environmentally useful and what is corporately useful in terms of generating profit. My sense is that there is scope for expanding this idea of transparency quite far in order to get the kind of symbiosis that Owen was talking about between economic advantage and environmental advantage.

Q89 Simon Wright: Can I pick up on a point that has been raised by Carbon Tracker, who I know have responded to the consultation? They favour companies having to disclose the emissions implicit in any fossil fuel reserves that they own. Is that something that you are looking at and that might be adopted?

Mr Paterson: I think that really is a step too far. Let’s see how we go with the existing proposals that will happen this year. I thought the proposal was really going to be quite difficult. I could not quite see how you would get an absolute handle on what Carbon Tracker really wanted, whereas the emissions are quite clear. They are definable and can be audited, whereas I thought that Carbon Tracker were rather too nebulous in their demands.

Q90 Simon Wright: Have you been actively exploring this? I know that they put the suggestions to Sir Mervyn King as well, but have you been working with others to look at how it might be progressed, even though you say it is a step too far at the moment?

Mr Paterson: There has been quite a lot of work getting the emissions through, and that is now going to happen in next year’s accounts. That has taken a large amount of Government time, right across Government. I have not been heavily involved in the issue of the Carbon Tracker, because I think what they are asking for is too nebulous. I think it was more valuable to get the previous step, which we have just discussed, through, which is now going to be law and is going to happen. That will provide some valuable data.

Q91 Mr Spencer: Presumably the whole concept of sustainability reporting is to make private companies more sustainable. I wondered how you squared that circle with the extra bureaucracy and red tape that will inevitably come with that private system. Would the Government be better spending its money on education and using other levers to drive companies in the private sector down that sustainability route?

Mr Letwin: I think that comes out of the previous discussion. Our idea has been-and this doesn’t just apply in this area but in a wide range of areas across Government and across the whole of our society-that by mandating transparency and then allowing companies, and indeed social enterprises, local governments and so on, to decide for themselves how to bring that transparency about and how to respond to the results that become transparent, we nudge them in the right direction without creating vast new bureaucracies. I don’t believe that it will be significantly burdensome for companies to report in a sensible and respectable way in their reports and accounts on their emissions. I think that when they do so and they have to meet their auditors and show that it is well done, properly done, that will focus the mind of the finance director, who is a very important part of a board, and hence of the board as a whole on the question, "Are we being emission efficient?". I think that will lead to savings and the net effect on the economics of those companies in almost all cases will be positive not negative.

If, by contrast, we had come down in a heavy-handed way with a great new regulatory scheme for every firm in Britain and said, "Your emissions quotient in the next year will be such and such, and we will produce an army of inspectors to come and work out and moreover they will tell you how to achieve this in every case", of course we would have a nightmare of bureaucracy and enforcement and everything else. That is what we have not done. What we have done instead is rely on transparency to lead to results we think will bring a combination of environmental and economic advantage. That is why I say that we can now think about the possibility of carrying this further into other forms of transparency. We will see, of course. It may be that there are some problems in emissions reporting once it becomes the norm, but I think we will find that it will go smoothly and therefore industry will be more than willing to consider more transparency.

Q92 Mr Spencer: It is a question, I suppose, of how effective those reports are going to be. Sorry to digress a little bit, Chairman, but if you take soil assessment plans for UK agriculture or manure plans for UK agriculture, I do not think I am breaking any confidences by saying that most farmers tick those reports and put them back on the shelf once a year when it comes to their cost compliance plan and they continue working to manage the soil in the correct way, because that is something they have done forever. We are almost introducing a layer of bureaucracy to report that fact when, through their own education and their own management, they deliver that anyway.

Mr Letwin: I agree with what you say, but I think you are picking an unusual example. If you are running a retail chain or a commercial clearing bank or any other major enterprise that is not in agriculture and is not in manufacturing-and there are obviously many that fall into those categories-it is all too easy for a sort of machismo to set in of thinking that all this stuff about sustainability is for the sandals brigade and not of any interest to us on this board. Whereas, in fact, the experience of some of the major retailers, for example, who have heavily invested in transparency and in energy efficiency, for example, emissions efficiency and waste efficiency, is that this is a major boon economically as well as for society as a whole and the environment. This is Owen’s terrain rather than mine, but certainly in my constituency my experience is that farmers are people who day in and day out are engaged with the environment. That is much less true in some other domains, and attending to these things, therefore, or being forced to attend to them without a heavy-handed regulation is quite a powerful tool and may prove to be quite a useful tool.

Q93 Dr Offord: You recently published the Greening Government Commitments. Do you have any concerns with any particular Departments and in particular their performance?

Mr Letwin: Yes. The Committee will have seen the 2011-12 report, as we promised at the last meeting, and will have seen a significant discrepancy between the performance of some Departments and others. It is not uniform. Some Departments have done well on some measures, less well on others, and vice versa. In some cases, the figures are spurious. For example, in the greenhouse gas emissions field, which is obviously one of the most important of the measures, BIS outstandingly comes out in the figures in 2011-12 as having done much worse than any other Department. It increased by 23% ostensibly, whereas others all decreased and many by quite considerable quantities. We immediately started investigating that. It turns out that this is attributable to the fact that in the baseline year, which from memory is 2009-10, the year of the General Election, as it happens, the UK Atomic Energy Agency research programme was not active. That is part of the BIS family and therefore goes into the BIS emissions figures. It was active in the 2011-12 figures, so there was an inevitable increase. We are currently working to try to disaggregate that effect and get clarity about exactly what was going on.

In some of the other fields, however, several Departments gave cause for concern, and several are explicable by things that we think are going to cure themselves, but some are not. For example, if I take the case of domestic flights where the overall performance was outstandingly good across Government, there is a 36% reduction compared with the target we are meant to reach by 2014-15 of 20%. Within that, some Departments showed magnificent reductions: DFE reduced by 62%; DCLG by 87%. I don’t mean to pick on BIS, but BIS increased by 29%, DCMS by 43% and UK Export Finance by 53%. UK Export Finance I don’t worry about because it is 15 or 20 flights we are talking about-it is a tiny number, just a large percentage-but the other ones are very important figures. On investigation, I think DCMS is not a guilty party. It is just that it was conducting the Olympics and inevitably had a high rise. I will know the answer, of course, in 2013-14 when they will not have been conducting the Olympics at all, and I suspect that we will see a marked drop by the time we get to 2013-14, a huge drop. However, we don’t have a good explanation of the BIS increase, and we have gone back to them about that and they have now instituted a new internal process where, as I understand it, all internal flights of less than 250 miles have to be authorised specifically and individually by a Director General signing off on a piece of paper or on a computer. It is that sort of attention to detail that is necessary if the figures are going wrong in a particular Department.

Q94 Chair: Is it part of the job specification of the Director General to do that?

Mr Letwin: That is a very interesting question to which I don’t know the answer, but we can investigate that.

Chair: Add that to the list.

Mr Letwin: It probably would be a good thing if it were. On waste, the performance is very mixed. Overall across Government there was a 5% reduction, which is encouraging, but within that there are many Departments that have decreased their waste very significantly, some Departments that have decreased their waste a very little bit and some Departments that have significantly increased their waste. In some of these cases there is a ready explanation. In the case of the MoD, they have been massively rationalising their estate, and one or two other Departments have been massively reducing their estate. It took me some while to get to grips with this, but I think once I say it, it will be as obvious to you as it eventually was to me, although not at the beginning. If you have a very large building and you downsize, what happens is you throw away a lot of stuff. There is nothing you can do about it. You will generate a large volume of waste. The proof of the pudding, of course, is that when you then move into the smaller place with less stuff, you should significantly reduce waste for the next year, so we will have a test. In the case of DfE, for example, which has massively downsized, the FCO, the Law Officers Departments, and indeed Export Finance, I think that is the major explanation. I am hopeful that there is not any structural problem in any of the Departments on waste and that when that effect is allowed for right across the board, waste will be moving in the right direction throughout.

The performance for paper across Government as a whole is outstanding, with a 24% reduction. It is part of my personal crusade in Government to reduce paper in every sense. We need shorter documents, fewer pieces of paper flying around, not just for environmental purposes but for intellectual purposes, clarity and sanity. I am glad to say that process is underway on a pretty major scale across Government. Mercifully, no Department has increased its paper use. There are some that have reduced by much less than others. The Ministry of Justice is one, and a great deal of effort is now being put into the question of the structuring of the criminal justice system to try to reduce, for all sorts of reasons, the positively humungous amount of paper that is involved in it. That is part of a much larger set of changes to try to engineer much better electronic communications between the various parts of the criminal justice system that will reduce paper use altogether, with much more efficiency for claimants or appellants, a much more straightforward time for witnesses and victims, and, indeed, an easier time for those conducting cases on behalf of the accused, but also with good effect here. So I am hopeful that that, which is outstandingly the largest issue on that list, will be resolved over coming years, although I don’t think that will happen immediately and in the meanwhile the performance is good.

As Owen said, he and Francis are also promoting this Government closed-loop paper system so that we recycle the whole caboodle. This is a very exciting development that would, of course, be a quantum shift beyond all of this. We are both trying to reduce at source and just do much better with all the Government paper.

Q95 Dr Offord: It is useful to hear you talk about specific Departments and specific lines within this. One question I have is what do you do to challenge poor performance in particular Departments? What sanctions do you have?

Mr Letwin: I can tell you exactly what we do, because I have been doing it in the last few weeks. We have a Cabinet Sub-Committee, which I chair and of which Norman Baker, who is a terrier on these matters, is the co-chair. We go through the figures item by item, Department by Department, and, where people do not come up with good explanations, Norman and I have split the task. I can’t remember which I am doing and which he is doing, but over the next few weeks we are going to be having a series of more or less pleasant interviews with specific permanent secretaries and specific Ministers about why things are not going in the right direction in some places in some domains. In parallel with that, Jeremy Heywood and Bob Kerslake, the Cabinet Secretary and the Head of the Civil Service, have written to permanent secretaries and have raised this subject also at the permanent secretaries’ meeting to make clear that this is not an optional extra. This is not a bolt-on; this is something the Government is committed to. It comes back to what we were talking about earlier. It is clearly advantageous in terms of addressing the deficit as well. All these things have a big financial effect, but it is also an environmental commitment, and it has to be fulfilled. We are acting from the centre, and I remain entirely confident that we will reach our targets.

Q96 Dr Offord: How would you counter an assertion that these targets only cover a small part of the Government’s estate? For example, they don’t cover things like NHS trusts, the Armed Forces, education establishments, devolved administrations and other public administration.

Mr Letwin: What I would say is that you have to start somewhere. They cover everything that we can control. For example, the defence estate is all included, but there is just no way we can control the amount of waste that goes on in a war. It would cast the rest of our efforts into disrepute across Whitehall if we tried to include it, because we wouldn’t control it. It would just be there in the figures in a sort of volatile way. Similarly, the NHS is composed of a huge range of autonomous entities and we simply do not have the means to control it. That does not mean that we can’t think of ways of giving incentives to those entities to improve on this performance, and that is something we are currently thinking about. The same is true of local government. For those things that are devolved away from central control you will always have the option of creating a structure of incentives or a structure of transparency, or both. What we can’t do is the pulling of levers that we can do in central Government, and what this does is say there is this enormously large set-but I accept not complete-of activities where we are actually directly in control of them and we can make decisions and get the thing right, and that is what we are determined to do.

Q97 Dr Offord: Thank you. The data shows us that some Departments have already achieved the results that you want by 2015, and you mentioned flights particularly, waste, water, paper, that kind of thing. How are you going to see continuous improvement in those Departments, rather than them just saying, "We have achieved it. We are not going to do any more"?

Mr Letwin: That is a very interesting point. I have been giving some thought to that, as has Norman and, indeed, the Committee. I don’t have here reputable, auditable and hence publishable figures for the first half of this year compared with the first half of last year, but I do have unauditable, disreputable first approximations to those figures, because we have been asking ourselves the question for those Departments that have, as you say, in some cases already hit or exceeded their targets, "What is going on?" The answer is that in at least some cases, very pleasingly, there continues to be a significant apparent improvement. I am very cautious about saying any more than that and I certainly would not say anything specific about particular Departments, because these unaudited figures are not anything like good enough to rely on, but they give you a hint of what we are likely to discover at the year-end.

I think we are going to have to look at the situation at the year end when we have robust figures across the piece. Where we have measures where large numbers of Departments have met their targets, I think we are going to have to consider whether to ratchet up the target. Where we have cases where some Departments have exceeded and others not, we will have to think very carefully about how to handle that. I don’t want to either dispirit those who are plodding their way towards the achievement that they were originally asked to achieve, and at the same time I don’t want to reward good behaviour with poor outcomes by imposing extra burdens on those who have already achieved much. We clearly want the system as a whole to continue making progress, so we are going to have to find some clever solution for the areas in which some people are exceeding targets and others not yet.

Q98 Dr Offord: Just to expand on that and my final point. As you say, some Departments are obviously doing very well. Do you advise Departments on best practice, for example, or do you just leave it to them to determine how they achieve the results that you want?

Mr Letwin: Neither. Advice from me on best practice in this domain would be absurd, because I am not a technician and I don’t know the answer. But there are people who are engaged in best practice, and you can see them from the figures. What we are arranging is for those Departments that have achieved enormous amounts in a particular domain to make presentations to other Departments about how they have done it. If they do that with a certain brio and charm, as opposed to a "Look, aren’t I clever?", tone, I suspect that the other Departments will take that message away and get to work and try to emulate. I think that could be quite a powerful tool.

Q99 Chair: I am conscious that we said we would be meeting until 3.00pm. The way we are running we are probably going to be eight or 10 minutes over that time. Can I just check that is convenient?

Witnesses: Take your time.

Q100 Zac Goldsmith: I want to talk about sustainable procurement, which, as a responsibility, has moved around a lot in the last couple of years. The Centre of Expertise in Sustainable Procurement was moved from the Treasury to the Cabinet Office. It was then renamed the Green Government Unit before finally being abolished, all within the space of 18 months. Do you think that that uncertainty and the fact that it has been so frequently shifted as a responsibility is a reason why the NAO has determined that it has not delivered? I think they described it as the Cinderella of the sustainable development changes introduced since 2010. Is that fair, and do you think it is because it has been moved from Department to Department?

Mr Paterson: I think that is unfair. It is a bit like the previous discussion. Progress has been made but more can be done. That is what I think the NAO report concluded.

Q101 Zac Goldsmith: I want to come to a particular discussion we had on the floor of the House in the context of the debate on horsemeat. I asked you about what more we could do to make use of the £2 billion or so we spend each year on food for schools and hospitals and so on, and why we are not making enough progress on using that money to support our own domestic sustainable producers. You gave a very enthusiastic and positive response. It was only a few weeks ago, so I do not expect a vast number of things to have happened since then, but it would be useful to have a more detailed answer from you now. Is that an area where you think we can make genuine progress and, if so, using what levers? What realistically can we expect over the next couple of years?

Mr Paterson: I am as enthusiastic as you are for promoting greater purchasing by Government agencies of produce grown in this country. But, as you noted in those debates, this is a European competence, so we are bound by certain rules. Within those constraints, we have gone a long way. We have set standards, and we put these around to all the purchasing Departments, giving a very clear steer of the direction we would like them to take. We are ultimately bound by the rules of the European Union on trading.

Q102 Zac Goldsmith: I take your point, and on the surface there is no doubt that that is correct, but there are other European countries that have a much more progressive view on this than we do. In Italy you are much more likely to be eating Italian grown food in a school than you would, for example, in a British school; likewise in France. I don’t know whether this is because those countries are more relaxed when it comes to negotiating EU law and negotiating ways around EU law. The legal advice that the Conservative Party received in opposition, when it was looking very seriously at these issues, was that there are ways around the European restrictions and that it is possible, if a country takes a more proactive view, to have perhaps not a pro-domestic or pro-national bias in their procurement policy, but certainly a pro-local view, taking into account food miles, seasonality and so on.

Mr Paterson: I think we have set a standard that we have encouraged purchasing agencies to follow. We can’t order them, but we can set a high standard and make them aware of what we would like them to do. If you have evidence that there is some school in Italy that is getting around the rules, send it on to me, and I will take it up.

Q103 Zac Goldsmith: I certainly would not want to shop them, but I love what they are doing, and I would like our schools to be more willing to disregard these nonsense regulations themselves. But I will do. There is a report that was prepared for the party in opposition, which was received well, but in the course of the chaos of the elections it has been dropped. I will bring that to you, and we will have a separate discussion about that.

Mr Paterson: The drama we have had over recent weeks has really brought into focus what are called supply chains. They are not chains. They are extraordinarily complex international networks of food material-I think would be the expression-in various states of semi-preparedness being transferred all around the continent. I think there is now real interest in shorter supply chains and authenticity and traceability. Of course in this country, after all the difficulties we have had in recent years with various animal diseases, we have extraordinarily tight traceability systems. We start off with a good raw material, and we have very rigorous production systems, so I do see an opportunity coming out of this. Going to the NFU conference was quite an eye-opener. I thought there might be a lot of worries, but they really had their dander up because they saw a real opportunity to get out there and promote British materials. In fairness to Peter Kendall, when the whole crisis blew up, he was out there on the television upfront, pretty well alone on some days, promoting British produce, and quite rightly.

Q104 Zac Goldsmith: It is very rare to see a platform shared by the Soil Association and the National Farmers Union and have total unanimity. The report that was prepared for the party in opposition was co-signed by both those organisations and many others besides. I think there is a general and widespread consensus that this is something that we can and ought to do. I would love to have that discussion, but on that point I think one of the reasons why we have not seen enough progress in terms of procurement is that people often mistake value for money for upfront, immediate cost. I know that Chloe Smith wrote to Departments at the end of last year telling them to focus procurement on value for money. I suppose my question to you is, has that had a negative impact in terms of sustainable procurement, not just in relation to food but across the board? Value for money can be in any number of different things, clearly, and you can stretch and define it in any number of ways, but has that instruction had an impact?

Mr Paterson: We will just stick to the food issue first. If you have stuff you want to send to me, or you want to have a meeting outside, I am very happy to go through this with you. I am as enthusiastic as anyone to get public agencies buying locally produced food.

Q105 Chair: Can I just interject on that? As it happens, I did have a private Member’s Bill-

Zac Goldsmith: Which I supported.

Chair: -to introduce sustainable standards for nutritious food in schools, which Defra did not support under any circumstances. I think this is an ongoing issue, but I just make a personal intervention there. I couldn’t resist it.

Mr Paterson: Clearly that was before my time, but I am generally enthusiastic about this. The figures are very simple. 22% of the food eaten in this country is imported but could be produced here. We can’t grow mangoes, we can’t grow bananas, but we have very good yoghurt, cheese, for instance, dairy, but we have a £1.2 billion deficit in dairy products. So there is a real opportunity here. Coming out of the straightforward criminal fraud-and don’t forget that this is what this was; this issue of passing off traces in some cases, but in other products, significant volumes of horsemeat as processed beef, was a fraud. I think it is going to turn out to be a serious criminal fraud on an international scale. I talked to the Irish Foreign Minister late this morning. There are 23 countries involved in this now.

The key point you make is on price. It is completely unacceptable to defraud the public, regardless of the price. If they go in and buy a modestly priced product, they should get what it says on the label. It is absolutely wrong that there should be any concept that if it is cheap it can be something else; absolutely not. What is on the label should be what is in the packet. The responsibility for this, of course, does rest with the food producers. They are responsible under European law. It is the food business operators, to use the exact technical word. I really refute this idea that if something is cheap it is not what it says it is.

Q106 Zac Goldsmith: I don’t want to hijack this on food procurement, but I think it is such an obvious issue and such an easy thing, theoretically, for the Government to do, and I would have thought practically as well. I think it is also the case that wherever this has been undertaken by local authorities or institutions like hospitals-the Royal Cornwall Hospital Trust and many other examples-they have not only done the right thing, they are saving money as well and you see increased uptake of the food, whether it is hospitals or schools. So even on basic, crude cost grounds it makes sense, but in terms of value for money it makes even more sense because you are delivering so many other goods. I really look forward to that conversation.

Mr Paterson: At the moment I owe you a letter. That is exactly where we stand. So I will fill you in with where we are on the standards that we have set, and if you think we can improve on that, I am very happy to listen.

Q107 Chair: I think the issue is in terms of the direction or guidance that went down from the then Secretary to the Treasury, Chloe Smith, about how much this whole impetus of value for money is at variance and opposed to trying to get the environmental standards and sustainability standards in. For this Committee, that is the issue really.

Mr Letwin: I don’t think it is at variance. I think it is perfectly possible to do what Mr Goldsmith was talking about, which is to find the means of getting good value for money, indeed the best value for money, in ways that are highly sustainable. Very often it is a question of having enough imagination about how to do it to achieve that. There may be some cases in which there are conflicts, but very often it can be done at exactly the same time as, and by the same means as, achieving sustainable procurement goals.

Q108 Mr Spencer: Do you recognise that animal welfare is part of that sustainability agenda and measurement, or is that a separate issue?

Mr Paterson: Very much so. In opposition when the enriched cages directive came in, I was chasing the then Government to make sure that as of 1 January last year other countries were conforming, and they were not, and this year-as you are fully aware from your background-we are miles ahead of the game on sow stalls. A number of countries knew perfectly well that this was coming down the tracks on 1 January this year. I raised it with Commissioner Borg when he came over here in January; I raised it at the next Agriculture Council; I raised it last week in another meeting with Commissioner Borg. I said it is completely unacceptable that some of these countries are still non-compliant when our pig farmers have been carrying this burden for years now. He promised me that he was taking up the issue and had already written to the offending countries and was taking the necessary measures to make them conform. I have taken this really seriously. You are absolutely right: it is very much part of the quality of what we are offering in this country. It is quite wrong that if we have welfare standards that conform, our farmers should be expected to compete with others who don’t.

Q109 Mark Lazarowicz: On compliance with European regulations, the sense I get from what you are saying is that the problem is not that we are being asked to do things that are wrong but other countries are not doing things they ought to be doing that are right. I wonder, therefore, why it was that the environment was one of those areas singled out by the Prime Minister as one where perhaps European regulation had become-I can’t remember exactly his words-unbalanced. Is that a fair reflection of the situation with regard to European regulation?

Mr Paterson: I think it is probably touching on what Zac was saying. There is this idea that some countries are more zealous at imposing regulation than others. But on animal welfare, we are absolutely clear we adhere to the highest standards. We have taken a lead so we know that our egg farmers were well down the road, as I have just said, on the enriched cages. We were miles ahead on sow stalls, and I think we are absolutely right to take the steps that I have taken. I have had two meetings with Commissioner Borg about this; I have raised it at the European Council; I have written letters chasing and demanding action against offending countries that do not conform. It is simply not fair on our farmers.

Q110 Mark Lazarowicz: Absolutely. I think Zac’s point was probably more in relation to European procurement than environmental legislation in terms of how procurement affects environmental matters. Are there any areas where you consider that European legislation has actually been damaging British interests? Sorry; on the environment, not generally, obviously.

Mr Paterson: That is a very interesting question. I think one of the problems is this pan-European environment policy that is possibly emerging from the CAP. It is very interesting seeing what is going to emerge in the CAP negotiations, because it is morphing in agonisingly staggered stages. From a food procurement policy it is morphing into elements of it being a pan-European environment policy. With the concept of greening where 30% of pillar 1 has to depend on three elements, some of them simply cannot be translated to some parts of Europe. I have talked to the Swedish Minister. Only one pine tree would manage to survive in northern Sweden, or you look at Andalucía where, talking to the Spanish Minister, there was mainly olives. It is very hard to impose a one size fits all environment policy to catch greening. We are in the middle of some very interesting negotiations on this.

My position on it is absolutely clear. I want to see the progression started by MacSharry and Fischler carry on. It is quite obvious we are not going to get to my ideal destination in this round, but I do believe there is a role. I would like to see decisions on food production left to the market, so whatever crops farmers grow, what animals they raise is left to the demands of the food market. But there is a very clear role in this for taxpayers’ money to be spent compensating land owners and farmers for the environmental work they do that delivers a public good, for which there is no obvious market mechanism. We are having quite a battle on this in our negotiations. You have seen some of the horrendous amendments going down in the European Parliament. Going back to subsidising tobacco production is completely barmy. Having taxpayers’ money subsidising a product that we then advertise by telling people not to smoke, and we then spend money on repairing people who have smoked it, is not a sensible way to run the sweet shop. We are having quite a battle with some of our members and colleagues on the Agriculture Council on these issues.

I am very clear on your environmental question. I think there is a very clear role, particularly in this country where there are areas of the country-the hills, Lake District possibly, High-Peak areas-where you can’t sustain a living just on food production alone, but you do very valuable work maintaining the environment, on the top of which rides a huge tourism industry. Rural tourism is worth about £32 billion. So, I think there is a logic to what we are doing, but that fits our environment and the difficulty we have with the one size fits all greening proposal of 30% is that it is trying to impose a simple solution right across Europe, which I don’t think is going to work as it is currently drafted.

Q111 Mr Spencer: Turning briefly to sustainable development indicators, I know Defra consulted on a new set of SDIs, and I think we are going to have those results in April. When we, as a Committee, looked at the SDIs we called for the Office for National Statistics Measuring National Well-being initiative to be merged with those SDIs from Defra. Is that something that is likely to happen?

Mr Letwin: This is a topic on which, perhaps, if you want we could have a much longer conversation at a subsequent meeting, because it is both wide and deep. I would distinguish between two propositions. Proposition A, the definitional characteristics and the statistical series that are used for various different purposes-well-being, strict economic measures, SDI, new measures and so on-should be consistent. In that sense, I welcome the Committee’s attention to the comparisons and overlaps between these different items. While the institutional structure behind the SDIs is not yet in any way finally resolved, personally I think there is at least a good argument for considering the possibility of moving responsibility for them after the summer out of Defra-this is not something I have even consulted the Secretary of State, sitting next to me, about-and into the ONS, if the ONS were willing to accept it. I have not talked to the ONS either, so there is a lot of discussion to be had here, and it may be that we will find some other solution. I can see an argument for trying to make sure that there is a consistent oversight, consistent data and consistent indices.

Having said that, there is proposition B, which is much cruder, that well-being is the same as sustainable development and you should therefore just have one index or one set of indices. I do not accept this at all. From my point of view, and indeed from the Government’s, we are engaged here in something that is of very great significance for the future of our country over the next 10, 20, 50, 100 years, maybe longer, because the political debate of this country, in common with much of the rest of the liberal democracies of the world, has been dominated by GDP and some of the other strictly economic indicators that surround it. It matters a lot whether that debate over the coming years, while continuing to be focused heavily on GDP and its concomitants, also focuses on two quite separate things. First, how does the current generation feel about life? Are people today happy? That is what the effort to develop a sophisticated, robust and internationally accepted measure of well-being is about. Trying to grasp the point that being richer, while very important, is not the whole of life and feeling happy about life, while not something ultimately sustainable if you are getting poorer, nevertheless is a very important thing in its own right.

But there is a different question, which is not how rich are we today or how rich are we getting tomorrow or how happy do people feel today or did they feel yesterday, but rather what is going to happen to our children, our grandchildren and their grandchildren, and are we storing up terrible trouble for them or are we leaving them with a world that will be also one in which they can be both prosperous and happy? That is the question of sustainable development. That is about intergenerational fairness, and it is about trying to recognise our role as stewards rather than just as exploiters of resources. There will be overlaps, but it requires a different set of measures and ultimately a different single index, if we can get there. As I see it, the end-point is not to amalgamate these three things but to be very clear about the differences between them and yet to make sure that, to take an example, the GDP indicator that is used in GDP is the same as the GDP indicator that is used-if it is-as part of well-being, which is the same as the GDP indicator that is used as part of sustainable development, so you don’t get the absurdity of different measures in different places that conflict and you don’t know where you are. It requires consistent oversight plus clarity about three different things we are measuring, each of which is important.

Q112 Mr Spencer: Presumably the good thing about GDP is you can set a hard target, you can measure it. We would like to see hard targets for those SDIs. Is that something that you are looking at?

Mr Letwin: Yes, I am a measurement fanatic, not because I care in the end about the exact figure or because I really believe in the exact accuracy of any set of statistics. I have dealt with the details of GDP calculations for too many years now to believe that they tell you the whole truth about anything, even the whole truth about GDP. Nevertheless, my experience is that where things are measured, the newspapers, the TV and the radio, and hence the politicians, focus. Where things are not measured, they don’t. I want to get to the position where we are measuring not just GDP and its concomitants but well-being and sustainable development in a way that can get on the front page of a tabloid newspaper and cause as much trouble if it is going down as it causes when GDP is going down and as much rejoicing if it is going up as GDP going up causes.

Q113 Chair: Finally, Secretary of State, you have inherited a whole range of sustainable development policies, but, given that alarm bells were ringing about various comments that were coming out of the Treasury about the Government’s commitment to different energy policies and so on, do you think that it is time-in view of what has just been said and said by Mr Letwin as well-for the Government to look at a new sustainable development strategy that sets out the Government’s position? Is that something we might look forward to?

Mr Paterson: I think we have a very clear position on where we are going, and I think these reports are the first ones to show significant progress. I think the discussion we have had for the last hour and a half or so shows there are all sorts of ways we can improve but we are on the right course. I am not sure we need to tear the whole thing up and make another great change and enlist a whole lot more people, I think we have to make this work. I very much look forward to your comments on how we can improve-Oliver has brought up various bits in the targets-but I think we have made some major progress. Some of the things we have mentioned such as the closed-loop idea on using all Government paper and reprocessing it-if we can get to the magic figure of 70,000 tonnes, we would have a brand new plant built in Essex and we would save huge transport costs-would be a massively beneficial project.

We have not touched on energy. I talked to Francis Maude at my last meeting with him. He is looking to a massive project where possibly half the energy purchased by the Government could be booked-effectively like hedging-on a very long-term sustainable contract from renewable and baseline costs with huge savings for the country. We are doing this. I think it would be a mistake suddenly to uproot all this, because I think we are showing that we are making progress.

Chair: I think that the area where our Committee has a concern is not just with what Departments are doing in respect of their procurement but over the wider strategic direction that the Government is going in and how sustainable development then gets embedded.

It has been a lengthy and thought-provoking session, and all three of you have been very generous with your time. I am sure it has been appreciated by members of the Environmental Audit Committee. We look forward to following through. Thank you very much.