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The issues raise so many different considerations that people would expect noble Lords to ask most serious questions about the Government allowing something like this to go through at this time of night and saying, “In due course, these powers could be used”. I have one or two questions for the Minister. When Mr Miliband, who was Secretary of State, came before the committee, he went rather further than the noble Baroness, Lady Miller, said. I apologise, but I have forgotten my reading glasses, so I cannot read the text. My recollection is that when I pressed him, the Secretary of State said that he found it inconceivable that the powers in the Bill could be used to smuggle in something of the significance of personal carbon trading allowances. That is strong language.

Will the Minister confirm that that is the Government’s view? Do they regard it as inconceivable that you could smuggle in personal carbon trading allowances under the powers in the Bill? Is that because they want

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to keep the powers in the Bill but they would not do this at the moment, or because they do not think that it would ever be appropriate to use the powers even when the Bill becomes an Act? Will they consider going further than that and giving an assurance that they would not do so? Will they respond, in due course if appropriate, to a proposal that the Bill be amended so that personal carbon trading allowances could not be introduced in the Bill but would require separate legislation?

Lord Crickhowell: I will be very brief. The noble Lord, Lord Woolmer of Leeds, has rendered the Committee a very considerable service by drawing attention to this matter. I rather wish that the Government would try to smuggle in such a scheme before the next election. I think that it would have the same effects as some legislation that I recall when I was Minister had on the then Conservative Government. It would guarantee the election of an alternative Administration.

The noble Lord’s memory is perfectly correct about what Mr Miliband said. He said that he was an enthusiast for the idea of personal carbon allowances. He then went on:

He then went on to say that it was so inconceivable it was not worth excluding it. That was OTT, he said. I am not sure about that. If it is so inconceivable and if it has the implications spelt out by the noble Lord, Lord Woolmer, we should exclude it. It is not something that could possibly be introduced by order. Therefore, it would be much better to clarify the matter and make sure that no one was so foolish as to make the attempt in the future.

10.30 pm

Baroness Morgan of Drefelin: I was asked whether the Government was going to be brave. It would be a brave Whip in the House of Lords who sought to go further than the Secretary of State on this matter. I welcome the opportunity to respond to this short debate—bravely enough, I hope.

I want to make things clear to the noble Baroness, Lady Miller of Chilthorne Domer, who asked whether the Government ruled personal carbon trading out of the Bill. In response, I can say that we are ruling it out of this Bill now, but we are not ruling it out as an area of active research and active consideration. For my noble friend Lord Woolmer of Leeds, I would like to take some time to reiterate the comments made by my right honourable friend David Miliband to the Joint Committee, as the noble Lord, Lord Crickhowell, started to do. In particular, my right honourable friend said:

I know that the noble Lord, Lord Crickhowell, picked up on those points, but I want to put them on the record in order to take the discussions forward, as we go on to Report stage.

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I shall take a few minutes to respond to the questions asked by the noble Baroness, Lady Miller of Chilthorne Domer. Amendment No. 165 calls for explicit reference to be made to trading schemes that operate on a personal or community level. The noble Baroness is well aware that the Bill provides that a trading scheme may be established if it encourages,

Technically, as the noble Baroness knows well, that means that there is no restriction on where in the economy or at which level of society the schemes may be introduced. Bearing in mind my comments, she will know the context in which we are debating this.

During the pre-legislative scrutiny by the Joint Committee, the Secretary of State indicated that we did not envisage using the enabling powers to support the introduction of personal carbon trading schemes. I reiterate my noble friend’s point: any such scheme would require change of quite a different order of magnitude to that required for a scheme limited to a particular sector or group of sectors. By its very nature, it would have the potential to impact directly on individuals.

There is a link here to the separate question about the Government’s views on personal carbon trading, which are of great concern to the noble Baroness. We are certainly committed to exploring action to tackle emissions at individual and community level. However, there is still a lot of work ahead to explore whether or not—as the noble Baroness asked—personal trading is a realistic and workable policy option.

The Government are looking into the potential value of personal carbon trading, as just one of a number of potential long-term options being explored for making individuals better informed about, and involved in, tackling climate change. We expect to be able to make a decision on whether further analysis is necessary this year.

The noble Baroness asked what the Government are doing to promote further investigation of this concept. The Government are considering personal carbon trading on a number of levels. For example, a cross-departmental working group has been established to consider personal carbon trading in detail. This of course includes officials from Defra, as well as from BERR, the Department for Transport, the Department of Communities and Local Government and HM Treasury and the Sustainable Development Commission. The Government are keen to make progress, and a pre-feasibility study is being carried out to answer some of the key questions on personal carbon trading. The study, as the noble Baroness knows, is due to report this year.

Work in government on personal carbon trading is being supplemented by a significant amount of work, as the noble Baroness has suggested, in the academic community; Defra is contributing to its funding. A number of these relevant bodies are members of a wider—I cannot say “PCT” as that means “primary care trust”—personal carbon trading advisory board

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which has been established to consider the issue. We are interested in the idea of personal carbon trading. However, given its wider-reaching impact on society, it is right that any decision is based on a thoroughgoing exploration and well established evidence base.

The noble Baroness asked about piloting or a voluntary scheme. The scoping study produced by the Centre of Sustainable Energy recommended addressing the high-level questions surrounding personal carbon trading before considering a pilot or a trial scheme. Pilot systems would, as the noble Baroness is aware, inevitably be simpler, potentially fault ridden and less defined than any final system. They could lead to failure and subsequent public distrust if a pilot was not carefully thought through at the highest levels and in detail.

Additionally, it would be difficult, if not impossible, to pilot one of the most important factors behind the scheme: its compulsory and national nature. We do not, however, rule out exploring likely individual responses, perhaps by developing and testing simulation games or running some trials. However, while these could provide some valuable information, they could not and should not be seen as formal pilots for a national mandatory scheme.

The noble Baroness asked about ID cards. For the record, the report of the Centre for Sustainable Energy does not recommend this. While noting that some academics, such as those at the Tyndall Centre, have stated that such a link would provide maximum levels of protection against fraud, the report goes on to state that personal carbon trading could be integrated within the banking system—which is of course an alternative way of looking at it—and that no link with ID cards would be necessary. Finally, the noble Baroness asked about Defra’s financial commitment. Over the financial year 2007-08, Defra will have spent over £140,000 on external work to explore the details of personal carbon trading, backed by over £100,000 of internal staff resource. I hope that I have been able to pick up on questions raised by Members of the Committee in this short debate, and that, with that, the noble Baroness will consider withdrawing her amendment.

Baroness Miller of Chilthorne Domer: I am grateful to the Minister for giving a full reply, even at this time of night. It is an important issue, which I hope we will come back to—probably not during the passage of this Bill, but when the Defra feasibility study reports. I am grateful to Members of the Committee who have perhaps raised some of the downsides of the scheme, because it is important to go into this with open eyes. I hope that we can pursue it in the future.

Lord Rooker: For the convenience of the Committee and being conscious of the time, I revert back to our previous debate on Amendment No. 164A. There was a point I did not answer and I will use this extra time for clarification. If the devolved Administrations want to use and invent a trading scheme for their purposes, they can do so now without the powers in this Bill. The fact is, we would

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rather they used the powers in this Bill. Then, if they did that, the other parts of the UK could join with them. Without the powers in this Bill, that would not be allowed to happen. That is the point I did not make when we were having the previous debate.

Baroness Miller of Chilthorne Domer: I beg leave to withdraw the amendment.

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Amendment, by leave, withdrawn.

Lord Rooker: I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

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