House again in Committee.
Clause 1 [The target for 2050]:
4: Clause 1, page 1, line 5, leave out “Secretary of State” and insert “Prime Minister”
The noble Lord said: I shall speak to Amendments Nos. 19, 65, 79, 88 as well; each is substantially in the same spirit as Amendment No. 4. Many noble Lords have stated that the Bill is unique, and therefore sets a precedent. I am sure that the Minister will say that it is the convention that securing the target and being responsible for it being met is dealt with by the Secretary of State of whichever department is in charge of the target. However, as the Minister said on the previous group of amendments, the problem is that this issue touches every department. From Defra to the Ministry of Defence, there is not a department that will not have to deal with it in a ministerial capacity and, on an individual basis, each department will have to look carefully at how it deals with its carbon allocation and reduces it.
We are talking about a 60 per cent reduction at the moment; further amendments propose an 80 per cent reduction of carbon dioxins from the 1990 levels. We should not underestimate the complexity of reaching that level. It is a 60 or 80 per cent reduction not just in the generation of electricity but in the use of carbon for every one of us—individually and personally—every company in the country and every department. That will be extremely difficult, because it will cover everything—flights, transportation, heating, lighting, the way we build and manage our homes, and the type of food we eat and where it comes from.
The issue should not be looked at just in this country. The right reverend Prelate mentioned the first carbon war, in Darfur, although some other regions have been affected. John Howard might be the first prime ministerial casualty, as the election in Australia was fought on the basis of the drought. The fundamental underlying feature of that drought was climate change, which brought about its severity. Is it conceivable that a Secretary of State—at the moment, I believe that it is the Secretary of State from Defra, but the Minister can say whether it could move to another department—will have the clout and ability to impose incredibly strict and harsh limits and regimes on every aspect of government and individual life? That will not be the case. The buck has to stop with the Prime Minister.
It will not be too long before each Prime Minister who comes into office will be judged to a degree by a significant proportion of the electorate on their ability to reduce carbon and mitigate the effects of climate change, which will become all too apparent for every one of us. We only have to look at the summer, when the Environment Agency became the fifth emergency service, defending infrastructure such as electricity stations, to see how each department will have to come to the fore. Of course, we have just had a Statement on schooling. I was at a meeting last night discussing the Severn barrage with a large company that deals with large contracts. The point made clearly to me was that the worst culprit of any client in thinking about mitigating the amount of carbon in any project at the moment was the Government. The cultural change has to take place from top to bottom, and only the Prime Minister can achieve that aim.
The noble Lord, Lord Taylor, raised this issue at Second Reading as one of concern to the Conservative Benches. I very much hope that they will support the amendment, and that it will command consensus throughout the Committee. I beg to move.
I support the noble Lord, Lord Redesdale, on the amendment. I raised the point at Second Reading. There are a number of reasons why the Prime Minister ought to be the person responsible. The noble Lord said that the issue covered every department. Of course he is right, but the most recent figures—those of 2005—regarding the share of carbon emissions from each sector show that energy industries produced 37.4 per cent, road transport 21.6 per cent, other industries 17.8 per cent and residential 14.9 per cent. If a department is to be in charge of climate change, it ought to be the Department for Business, Enterprise and Regulatory Reform, not Defra.
There is another reason. We had a debate about agriculture last week, and I raised a couple of issues then. One is that Defra is still not trusted fully by the farming community. It has not got back to the level of trust and support that it had once. For that department to be put in charge of climate change is wrong. The second issue is the pressure that Defra is under. During the debate, I asked the Minister about the number of staff changes. I understand that there will be 300 redundancies; the best people are leaving Defra. I did not get a reply to any of my questions. Perhaps now would be a good chance for the Minister to tell us what the future of Defra is. How many staff will it lose? What incentives are there to retain the best people? How many people will be committed to the climate change division? What is the effect on other parts of his department?
That is a major thing. Perhaps Defra is capable, but if it is not and cannot give all the resources needed to make this Bill work, then it is far better that the Prime Minister takes the reins right at the beginning, and that we are absolutely clear about that.
Although I have already indicated why this is important, there is another feature worth consideration. Whenever I go into a school, issues about the future of the world are at the top of the agenda of the people who want to talk to me. It is not purely a local issue for them. If the Prime Minister were to acknowledge this and accept some responsibility publicly, he would score enormously highly with those teenagers who will have to live with the consequences of what we decide. They probably mind about it much more than any of the rest of us. They are invested in it in a remarkable way, both in intellectual appreciation of what must be done and their persistence in holding to account those whom they think might be able to do something about it. I am sorry that the noble Lord, Lord Adonis, is not in his place to hear me say this. It would be an enormously important signal to the young of the country if the Prime Minister were persuaded that this was an important part of what he should personally head up.
I am pleased to speak to the amendments. Once again, although there is some difference in detail, there is strong agreement upon them. Some are jointly tabled by the Liberal Democrats and ourselves, and the right reverend Prelate the Bishop of Salisbury has suggested that he has a similar approach.
I emphasise that we are not seeking to remove the responsibility of the Secretaries of State of Defra or any other government department. Amendments Nos. 65, 79 and 88, to which we have put our name, serve a specific purpose: to put the Prime Minister in pole position on particular issues. The first is for him to read the annual report of the Committee on Climate Change and present it to Parliament. Similarly, the final statement of the budgetary period should be presented to Parliament by the Prime Minister. The final 2050 statement should also be presented by the Prime Minister to Parliament for approval. The reason behind this, as has been said by other noble Lords, is that climate change is a cross-departmental issue. It must be considered where all policy decisions are being made, not just in Defra. The brief of the Secretary of State for Defra is simply not broad enough given the magnitude of the issue. The only person whose brief cuts across all departments of state is the Prime Minister. Ultimately, his Government implement this law.
To ensure that the Climate Change Bill will take all policy decisions into account, we must make sure that it has bite. The only penalty for missing targets in the Bill is political. Putting it centre-stage and having the Prime Minister making the reports ensures that the penalty, as it were, is identified with the Prime Minister of the Government, so that he cannot just blame a Secretary of State and send him out to this country’s political equivalent of some Siberian power station.
A number of noble Lords have known what it is like to be blamed for government decisions. They have found themselves on the Back Benches, although I am very pleased to see that one of them has returned to Front-Bench duties recently.
I believe that we are correct in making the Prime Minister responsible. It puts him or her centre-stage as regards responsibilities in this matter. I hope that the Minister will give a positive response, so that we are not forced to move an amendment on Report.
I draw the Committee’s attention to the speech of the Prime Minister on climate change at the Foreign Press Association on 27 November, when he said:
“Every new policy will be examined for its impact on carbon emissions—not just those which reduce emissions, but those which increase them. And where emissions rise in one sector, we will have to achieve corresponding falls in another”.
That was a clear recognition of the fact that there is an inter-sectoral trade-off at the very heart of this legislation. The relationship between one department and another is critical to the Bill on an agenda which will probably dominate the next 100 years. I would have thought that any British Prime Minister would want to take on overall responsibility for seeing through this agenda, knowing that it is only the Prime Minister who can manage an inter-sectoral role interdepartmentally and also as regards wider policy governing various sectors. That paragraph of the speech continues:
“The legislation will enact our target of achieving a reduction in carbon dioxide emissions of at least 60 per cent by 2050 through domestic and international action”.
Again, inherent in that is the proposition that many of the great decisions on these issues will be taken at international conferences—probably summits in the end—when we hit crises. I argue that it is only a prime minister with a central co-ordinating role—the important role of seeing through this policy—who would have day-to-day contact with this moving agenda and would be able to represent fully the interests of the United Kingdom in those conditions. With that in mind, I strongly support the amendment, although I understand it is unique.
I think this group of amendments is entirely misconceived. When I was a Minister, there were many occasions when I spoke to other Ministers in other departments—foreign affairs, environment and so on—and I do not think that anyone who had any experience of government would support this view. Here the Secretary of State speaks for the whole Government and inevitably, if the matter touched on the interests of another department, the Secretary of State would confer with that department’s Minister.
Of course, this issue is not entirely unprecedented, as I have already indicated. Quite often Bills or Acts ensure that one department is closely in touch with another. The Opposition—Liberal Democrats and Conservatives alike—are suggesting that the Prime Minister should be presidential. Fortunately, he is not.
As I have said before, this proposal is misconceived. Of course, the Prime Minister addresses this and many other things in his speeches; he has to, as he is presiding over the whole Government. It is inevitable that the Prime Minister should be associated with the success of each Secretary of State or Minister. I am bemused that this amendment is being considered. It is not worthy of the attention of anybody who has served in government. I thank heaven that we do not have a president at this stage.
I hesitate to contradict the noble Lord, Lord Clinton-Davis, because of his huge and unique experience. However, the difference in the tenor and nature of the challenge facing us means that we should, perhaps, cast off past practice and look at the challenge of the future. Delivering this process in the period between now and 2050 will be incredibly difficult.
Although I would not wish to undermine Defra—or the Minister, who will undoubtedly have to do the legwork on behalf of the whole Government to ensure that all departments are truly locked into what, if we are to succeed, will be a unique and unprecedented effort—it would, nevertheless, be a real sign to the whole nation and to all aspects of government if the Prime Minister were to commit to making the annual progress report to Parliament. That would put this issue, its unique nature and the difficulties of achieving it in its proper place.
I support this amendment, which came out of our Joint Committee. I will also take a minute to unbemuse my noble friend Lord Clinton-Davis. I understand the practicalities and I am sure the Minister will set them out when he answers, but I beg him to consider this: every Member of the Committee has had some personal experience of the dismal problems involved in trying to press a coherent policy across government. Every one of us has some scar across our backs from attempting to do that. It is not true to say that Government act in a coherent and sensible way—if only!
I suggest that this is a unique Bill with unique challenges. It requires a unique resolution, and I cannot see that anyone but the Prime Minister could press each department to do its job as defined by this legislation.
I support what the noble Lord, Lord Puttnam, has just said. I have never had the privilege of serving in government; I would like to have done that, but have not. Yet, given the pressures on each department in the current economic climate, the noble Lord, Lord Clinton-Davis, is certainly confident to think that all departments will work as one—and will have the finances to support something so hugely important in terms of what the Bill tries to deliver. That confidence is wishful thinking.
The noble Lord, Lord Puttnam, has put his finger on it; without doubt, the whole Committee wants the Bill to succeed. But who makes the ultimate decision? If a department is financially struck, which I am sure happens regularly—it did so in the day of the noble Lord, Lord Clinton-Davis, and it continues to do so—someone has to be overlooking the system and saying, “Look, this is what we must do. We must give priority to the aims and achievements within this Bill”. I certainly have reservations about one individual department, or the commission itself, once it is set up, being able to do that, which is why I particularly support these amendments.
I rise briefly to add my support. Whenever you have a precedent—I am not sure whether or not this is a precedent, but it is certainly unusual—there are always those who say, “This smacks of presidential government”, or some other obnoxious connotation. The real connotation is that the Bill deals with issues that transcend most of those with which Secretaries of State are expected to deal. We all recognise that for “Secretary of State” you can read “every government department”. That is not the issue. The issue is whether we wish to give a signal that this is an issue that has international leadership connotations as well those of leadership within our Government. To write the name of the Prime Minister into the Bill, as is suggested in the amendment, is an eminently sensible proposal.
I must say at the outset that we do not think that this is a very sensible idea. I take the point made by the noble Earl about sending a signal. I am not going to gloss over the Rolls-Royce efficiency of decision-making in government. As my noble friend Lord Puttnam said, sometimes when things happen you think, “Heaven above, we are the Government. We are supposed to be able to do things better than this”. It is not completely a Rolls-Royce machine, but we must be realistic.
I say to the Committee in all sincerity that of all the amendments that could conceivably be made to the Bill by your Lordships' House, this is the one above all others that I would have no difficulty whatever in advising the other place to chuck out. There would not be any difficulty about that. There are other amendments on which it would be very difficult for the majority party in the other place to go against your Lordships' House; on this one, there would be no difficulty.
This is not a challenge, I am not looking to extend this debate, but I also have to say if there were a succession of ex-Ministers from the Cross Benches, the Conservative Benches, the Liberal Democrat Benches and these Benches saying that this was a good practical idea, based on their experience and knowledge of Whitehall, I might take a different view. The fact is that the only ex-Minister who has spoken, my noble friend, said—I see the noble Lord, Lord Forsyth, nodding, but I will not put words into his mouth—that this is not a good practical idea.
No wonder. I cast no aspersions on the noble Earl; I had forgotten about that. There again, he went on about Defra more than anyone else. I will come to that point in a moment.
The amendment would not be sending a signal. If we transfer the powers in the Bill from the Secretary of State to the Prime Minister, he would be required to deal with meeting the 2050 target, with setting and meeting the budgets and with laying the emissions statement for each budgetary period and for the year 2050 before Parliament. The practical effect of the amendment is, frankly, difficult to define. In reality, the Prime Minister could delegate the duty to deal with all those things to departments, led by Defra but along with others. The whole thing is preposterous, given the staff numbers in No. 10. There is not the capacity there. No. 10 might be very large compared to previous Governments, but it is nowhere near as large as the secretariat of most departments. It is simply not resourced to carry out those matters. Therefore, it would fall to the Secretaries of State in the various departments. There is a real problem.
I understand the point about sending a signal. I thought that my noble friend Lord Campbell-Savours was going to come to the exact opposite conclusion to the one that he reached. He made the point that the Prime Minister is taking the lead on this issue. He cited the 27 November speech. Anyone who reads the 19 November speech on the calls for changes relating to climate change covering the whole gamut of international and domestic policy in terms of targets and how the Government are operating under his leadership will see that he is taking a lead on this crucial issue.
Therefore, we do not accept the unusuality, if I can use that word, of putting that in the legislation. There are bits of legislation where the Prime Minister is mentioned in making various appointments and in questions of national security. He cannot meaningfully take on the detailed responsibility, which is what is implied in the amendment. He would end up delegating it.
The amendments to which we have put our name limit the responsibility of the Prime Minister to the particular element that we think is important: to present the report to Parliament, so that he is accountable before Parliament. It is well understood that it is not for him to be setting the strategy or anything else, but the strategy must be accounted for to Parliament by the Prime Minister. I do not think that that is placing an overwhelming burden on his time. It just puts the responsibility where it belongs, across departments and in the hands of the Prime Minister of the country.
I fully accept that point. I have no knowledge of future plans, but I suspect that, given the nature and detail of the strategic speeches that the Prime Minister is making on the issue outside Parliament, from time to time he may deliver statements inside Parliament. To put a statutory duty on him, with all the detail implied, would be a big mistake. I am not arguing from a presentational point of view about sending signals. I freely admit that there are parts of the Bill where we might be able to look at ways of demonstrating that the Government as a whole are committed on this issue. That is the central point: there is a fear that “Secretary of State” means one department working in a silo. Cabinet government—as people understand the Cabinet sub-committees—will give instructions to Secretaries of State across the whole of Whitehall. That is usually done behind closed doors, which I fully accept does not send a signal outside. However, we are happy to look at where that can be done to show that the Government as a whole have a grip on this, as I implied when answering the intervention of the right reverend Prelate on the earlier amendment. All the departments in the whole of Whitehall—I do not know a department that is not—are involved in working on the Bill. It has to come together.
Your Lordships’ House prides itself that, at Question Time, the Questions are to the Government, not to departments. That causes considerable difficulty with many Questions, simply because they cross more than one department. There is mayhem in Whitehall when two or three departments have to agree an answer—compared to the other place, that is the reality, as those who have answered Questions in this place would find out. One Minister has to answer. If Ministers sometimes start talking about their department, they are corrected by your Lordships: “You are answering for the Government, not the department”. That is exactly my position presently. Although I am from Defra, which is the lead department on the issue, I am answering for all departments. That is the same for the Prime Minister.
Could I point my noble friend to the issue of national security? We have defence, foreign affairs and the Home Department all accountable, as I understand it, through the Prime Minister to Parliament. It is the Prime Minister who signs off reports from the Intelligence and Security Committee—it is not the Home Secretary or the Secretary of State for Defence.
As I said a few minutes ago, there are areas of legislation where the Prime Minister is referred to. The Prime Minister is responsible, because of accidents of history, for some odd appointments—I hope that noble Lords know what I mean by that. In other words, we are not saying that the Prime Minister is not referred to in legislation. We are not saying that, because that would be wrong— there are many such occasions. The nature of this is that we are quite happy to look at whether we can modify the Bill so that, from a presentational point of view, it clearly signals to everyone that the Government are responsible and that we have a plan. That plan will also be approved by Parliament so, in that sense, we are all in this together, across the generations and across the Floor. However, putting the onus on the Prime Minister in this clause is a big mistake. We are quite happy to look at the presentational aspects in other parts of the Bill, but not to put detailed, onerous requirements on the Prime Minister, which he would only farm out to the civil servants of other departments. There is nothing to stop him taking a lead and, in both those speeches that he made outside the House, he was taking a lead on this issue. In fact, he has been criticised, I understand, for making it clear that there have to be options for power generation, simply because of climate change. What do some of the NGOs do? They go to the lawyers to say that he has pre-empted a consultation. He is giving a lead on the issue. He is doing that now. Modifying the Bill is not required for that to continue.
There is a slight issue here. The fundamental point was not to raise the issue of the Prime Minister being a figurehead for the Government. The nature of the amendments that we tabled—there are obviously certain differences with the other amendments—is that this is not just a presentational issue but one that comes to the heart of what the Bill is about. We cannot pretend that the Prime Minister will not be seen by the country as being responsible for meeting the targets. We cannot then pass it off to a Secretary of State. The Minister has said that of course the Prime Minister will not do the work himself. I quite agree. However, we have the major problem of different departments with different objectives. A classic example was the decision for the third runway at Heathrow: DBERR—or DEBRIS—made one decision, about the economic impact, while Defra would make another, about whether we should build a third runway at Heathrow. There are going to be major issues throughout government, between departments.
On the transport issue, I was talking to a transport expert, who said, “The definition of a necessary journey is one that I take; the definition of an unnecessary journey is one you take”. The big problem is that each of the departments is going to have major difficulties. We already see this in the ETS—the aviation industry is interested in signing up because it can buy credits from other industries. The problem, taking that to its logical conclusion, is that the aviation industry would take up all the carbon units for every industry if it carried on buying up those credits. Therefore, there would be none left for power generation or for other industries. The issue is not just presentational. If individuals write their manifestos about how they are going to run the Government in the future, they will have to make sure that every single one of the policies that they sign their parties up to meets those objectives. Otherwise, we are greenwashing in this Bill. That point has been made about the Bill.
I would have been absolutely amazed if the Minister had said that he would wholeheartedly accept the amendment, but he has said that there are some areas that he would like to discuss. I would like to talk to him and to his department and officials, perhaps with the Conservative Opposition, because if they put their name to the Bill, we might look forward to an amendment that will meet some of the provisions we have set out. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5: Clause 1, page 1, line 5, leave out “ensure” and insert “develop policies and take measures, including the setting of five year targets and budgets, with the object of ensuring”
The noble Earl said: The amendment stands in my name and that of my noble friend Lord Crickhowell. My first duty is to send the apologies of my noble friend to the Committee—he is in Moscow with Sub-Committee C and not even he, in his brilliance, can be in two places at once.
We come to an important part of the Bill, the first clause. Clause 1(1) reads:
“It is the duty of the Secretary of State to ensure that the net UK carbon account for the year 2050 is at least 60% lower than the 1990 baseline”.
The word that we wish to delete is “ensure”, replacing it with the words on the Marshalled List.
The Joint Committee took evidence on this issue—our comments are in paragraphs 104 to 117 of our report. As said on many occasions and by the noble Lord, Lord Puttnam, who chaired the committee, this is a unique Bill. When we questioned those who gave evidence on Wednesday 16 May about this duty “to ensure”, we found that it is a unique clause, which has never been used in a Bill before. Mr Wilson, who is a director of Cambrensis and a barrister at its environmental law unit, told us that, in his opinion, the clause might add a little to public pressure and organise public opinion, but he went on to say that:
“it is difficult to enforce it in a conventional way”.
Professor Forsyth said that he was unaware of any other example of a Bill,
“concerned with the setting of targets”.
In considering our conclusions, the members of the committee discussed how we should try to strengthen the Bill and how we should impose a duty on the Secretary of State or the Prime Minister—it is still the Secretary of State now—in a way that is enforceable in law. In his evidence, my noble friend Lord Norton of Louth put it very well. He said:
“The problem is not one of target setting, nor of embodying a target in statute, but rather the imposition of a duty to meet a target, the fulfilment of which relies on circumstances beyond the control of the body vested with that duty”.
That is the nub of the problem.
We have a duty that binds the Secretary of State and future Secretaries of State, yet it is practically unenforceable. That is why my noble friend Lord Crickhowell and I have proposed our wording—in order to put some meat on this important bone. We do not want to dilute the importance of this clause or the importance of the Bill. We want wording that is equally as strong as the word “ensure” but which also enables the Secretary of State to be held to account in a proper way, rather than through just public opinion or, as the Minister said, in a way that puts pressure on the civil servants through the Ministerial Code and the Civil Service Code. I beg to move.
I support this amendment. I have talked to my noble friend Lord Crickhowell who asked me to enter my tuppence-ha’pennyworth. The Secretary of State is Mr Hilary Benn. His grandfather was, I believe, Secretary of State for India in 1927. His father was a distinguished Minister in the Labour Government in the 1960s. There is an element of the fact that the Benn family are becoming hereditary Members of the House of Commons, which has an element of irony about it. I believe that Hilary Benn’s son also is standing as a Member of the House of Commons, so the tradition continues.
I suppose that it is possible that a Mr Benn—or perhaps a right honourable Lord Stansgate KCMG or something—will be Prime Minister at the time that this duty is imposed on the Secretary of State. Those are probably the unique circumstances in which someone could be held responsible in 2050 for actions taken by others between now and then. For the sake of argument, let us assume that this passion for wind power turns out to be what a lot of the wind power sceptics say that it will be in not reducing CO2 emissions. I believe that there is recent evidence of that in Denmark. We know that wind power cannot be used all the time because either the wind is too strong or too weak. Consequently, it has to be backed up with other forms of electricity generation.
If the policies adopted by the present Mr Benn as Secretary of State are the wrong policies and they do not affect CO2 in the way which we all wish and all know to be quintessentially essential, how can Mr Benn junior—probably the present Mr Benn’s great-grandson—or whoever is Secretary of State in 2050 be held responsible? Of course, we should have something of planning in the Bill. This goes a long way towards it. Perhaps it would be better to have a declaratory clause. I know that modern legislators do not like them, but they have been present in other legislation. I have been trying to show the difficulty and illogicality of putting this wording in the Bill. I therefore support this amendment completely.
I, too, support the amendment. We probably devoted more time to this matter in the Joint Committee than to any other single issue. We certainly took more expert evidence on it. I started as a sceptic, but I became increasingly convinced that the noble Lord, Lord Crickhowell, and the noble Earl, Lord Caithness, were correct in their position. Common sense tells me that the words,
“with the object of ensuring”,
are far more sensible than the claim to ensure something which in reality it is impossible to ensure. I urge the Government to take this amendment very seriously.
I, too, support the amendment. As my noble friend Lord Puttnam has said, we spent hours deliberating this issue, which was at the heart of much of our debate. This amendment strengthens the purpose and the objectives behind the Bill, which will be better for it.
In the debate on the previous amendment, the Minister said that he was putting words into my mouth when I nodded in agreement about the foolishness of replacing the words “Secretary of State” with “Prime Minister”. I was nodding in agreement because we have collective government in this country: we have Cabinet government. The Bill states:
“It is the duty of the Secretary of State to ensure that the net UK carbon account for the year 2050 is at least 60% lower than the 1990 baseline”.
That drives a coach and horses through our whole constitutional approach. No Government can bind their successors. A Secretary of State may be a member of an Administration that has a target to reduce,
“the net UK carbon account for the year 2050”,
so that it is 60 per cent lower. But, as the Bill is worded, the Secretary of State is put in an impossible position. He or she will not know what their successors will do. Far from offering any radical change to the nature of the Bill, the amendment puts into common sense the position of a Minister, as my noble friend has argued.
I also worry a little about the use of legislation to make declaratory stands on policy. In the other place, I was involved, as I am sure was the noble Lord, in taking tours around the Aye and No Lobbies. In one of the Lobbies one can see the legislation that has been passed. I was always rather embarrassed that there were far more shelves for the period when we were in office, never mind for the modern period, than for the previous 150 years. I repudiate the idea of using legislation to make a point, to highlight an issue or to set a target. I worry that this no doubt well intended Bill is being used for this purpose, which does not seem to me to be a proper purpose. The first line of the Bill falls down in that respect and the amendment does much to improve it.
I do not seek in any egocentric way to interpolate a personal note, but it follows on the speech by my noble friend Lord Onslow. The building of the British Library took only 20 years and not the 43 years for which we are legislating. But there were a number of Secretaries of State during the building of the British Library and I was one of them. In 1994, when it had been 16 years in the building, I was summoned before Mr Kaufman’s Select Committee. About two-thirds of the way through the committee, after a great deal of evidence had been considered, Mr Kaufman said, “Now, Secretary of State, we really must come to a conclusion. This is a very bad business. Who is responsible?”. I knew perfectly well that if I said anything other than, “Mr Kaufman, you know perfectly well where the responsibility lies: the Secretary of State is responsible and, therefore, I am”, the hearing would go on for at least another three-quarters of an hour beyond the time that was set for us to finish it. It was therefore much simpler to say, “Mr Kaufman, you know perfectly well who is responsible, and that is myself”.
Three or four years later I came across a paragraph in a history of the Labour Government of 1974 to 1979 written by the noble Lord, Lord Barnett, in which he described the efforts of the Treasury to so hold down the detail of the building of the British Library that, as he said in his concluding sentence, given what had been achieved in terms of controlling expenditure on this item, if there had been the slightest economic quiver in the next 20 years, it would have been a miracle if the British Library had been concluded before the end of the century. I say to my noble friend Lord Onslow that the consequence of that particular remark was that, when Her Majesty the Queen opened the British Library in 1998, we had achieved it before the end of the century and I was in the happy but wholly accidental position of taking the credit for achieving what was in fact a miracle. The fact remains that although I said what I did in 1994, it is difficult to see how the Secretary of State at a particular moment is responsible for the whole 20-year span of the business. The Minister would be doing your Lordships’ House a service if he gave full consideration to this amendment which would to make the situation slightly less redolent of Alice in Wonderland than its present wording.
I presume from the intervention of the noble Lord, Lord Puttnam, that the debate that took place in the Joint Committee—I do not know as I was not on it—was about the words,
“setting of five-year targets and budgets”,
and not about the words,
“develop policies and take measures”.
I see no difficulty with the words,
“develop policies and take measures”,
but I do see some difficulty with the words,
“setting of five-year targets and budgets”.
What is the position then if they have to be amended in some way? The words,
“setting of five-year targets and budgets”
are locked into the Bill.
Perhaps if my noble friend is minded to accept this amendment or consider it for Report he might have in mind my comments on the setting of five-year targets and budgets and the problems that might arise.
My noble friend has done a great service by raising this topic and we have benefited from the wisdom of quite a few Members and their experience in Government. The amendment helps to focus on what the duties of the Secretary of State might amount to; it will be interesting to see whether it is possible to tempt the Minister to tell us the Government’s view of what the Secretary of State’s duty might amount to.
People have been looking at what problems might face a future Minister—Prime Minister Benn or otherwise—but the plight one should be thinking of is that of a Secretary of State who is in office in 2045. If there has been slippage in the previous five-year plans, he may be faced with a policy to reduce emissions dramatically to still meet the targets we are setting for 2050. He might have to close down whole sectors of industry. There will have to be fairly rigorous enforcement of each of the five-year plans proposed. The brief that we received from the CBI mentions a survey by McKinsey saying it will be quite difficult to meet the interim target of 26 per cent by 2020. In the natural progression of things, trying to serve at the front end is the easiest bit. We are relying on major scientific breakthroughs if we are expecting to save very much in the later stages.
We have, of course, set an even higher challenge by suggesting that the Secretary of State will have to try and ameliorate the average global temperature. The Secretary of State may not be able to give up his efforts even if he hits the target of 60 per cent as laid down in the Bill if other emerging economies do not also make an effort. There would have to be something more than the present participation of emerging economies such as India and China under the Kyoto treaty joint initiative. That has already achieved considerable savings but considerably more will be needed if the Secretary of State is to be able to give up even on these targets.
I hope what I have to say will be accepted as positive. This issue was raised at Second Reading, and I fully accept that I am not familiar with all the detail raised in the Joint Committee, but I am not sure whether it has helped us for the next stage. It seems to have been thought that the intention of the amendment was to address the perceived lack of enforceability of this requirement or duty to meet the targets and budgets in the Bill. It was not drafted for that purpose, as I said, probably inadequately, on Second Reading, and as was alluded to by the noble Earl—although I thought as he sat down that he was making the opposite point from the same information.
The intention was to attempt to change the infrastructure culture in Government, which is quite important if one is to transcend departments and Governments, as long as there is an acceptance that we are legislating for decades. Governments come and go and each is sovereign. We were trying to find a way to achieve behavioural change in Whitehall, in the Civil Service as much as among Ministers. That is crucial. I cannot say that I agree with them but examples were given of different departments’ attitudes to energy generation and transport, as though the departments were fiefdoms in their own right, quite independent of Government and with their own messages. That may have been case in the past and there may still be elements of that but we are attempting to use the law to change the institutional behaviour in Whitehall through the Civil Service Code and the Ministerial Code.
The dilemma would be if two or three departments worked on an issue, each with a substantially different attitude. The requirement of the law is pretty important as far the Civil Service and our system of government are concerned. If they ignore the law, or worse still, if they go in the opposite direction to the law as set out by this clause, there would be major problems and judicial review could follow. So the intention is to give a constitutional significance and to permeate the attitude in Whitehall that there is a duty to ensure the outcome. We believe—and I stand to be corrected on this by lawyers—that the amendment would in practice weaken the duty on the Secretary of State. If you focus on the process, it would be possible to do your best, stay within the budget and end up complying with the duty because you thought it was the right policy. In the words of the amendment, you tried,
“to develop policies and take measures … with the object of ensuring”.
So you could satisfy the requirements of the law and completely fail. It comes down to intention and lack of enforceability. I fully admit, as I said at Second Reading, that the purpose of putting this in the Bill was to change the behaviour of the Civil Service in Whitehall and, through that, to change the behaviour of Ministers. That is the central objective.
Perhaps I can help the Minister with an analogy. When we were in government, we had an objective to reduce the proportion of the GDP that was taken in taxation. We were not particularly successful, but it was an objective. Had we passed a law that said that it was the duty of the Chancellor of the Exchequer to reduce the amount taken by the state in taxation, I doubt very much that it would have influenced future Governments. This is declaratory legislation, and placing such a duty on a Secretary of State or a Chancellor, who might be faced by a change in economic conditions or a shock, might put him in conflict with his other duties and it may be impossible for him to achieve it. In this case, he would not know whether he had achieved it until 2050, so why will it change the culture? There is always a reason for people to make a different case.
I fully accept that, and I am grateful for the noble Lord’s practical examples. I am not saying that this is perfect. It is open to a future Government to tell Parliament that they want to change this requirement and to give reasons that explain the weakening of the situation. It would be up to another Government to do that. However, the Committee on Climate Change, if set up under the Bill when it becomes an Act, will be an important body that, from the point of view of public accountability and the court of public opinion, will have a role in, and an attitude towards, this. People would see what was happening, so there would be pressure. No one is going to say that one policy over a period of years may be seen to be more practical than others.
One thing is seriously worrying me. What happens in, say, 2035 when there has been a major slippage in target achievement? How will the law be enforced? That is what we would all like to know. How can you enforce this? What happens if you go to court? That, I think, is what none of us understands.
As I said, this is part of how we will ensure that the targets are met. This is an incredibly difficult issue, as we explained on Second Reading. There is no perfect answer. It is not pie in the sky to say that we want to ensure that the policies are taking place or that we want the Secretary of State to ensure that at least 60 per cent is achieved. In the pre-legislative scrutiny of the draft Bill, the Select Committee in the other place stated:
“By institutionalising the targets, the political pressure to achieve them will be increased”.
The Government of the day will be open to public scrutiny because of that. That is not a penalty in the sense that you break the speed limit and you get a fine, but that aspect is crucial. We do not rest our whole case on that, but it is part of building the pressure on Governments and Secretaries of State to deliver.
We are trying to introduce a clause that is totally unenforceable, but there is another major factor. We are setting up the whole Bill as an exemplar to the rest of the world of how to try to reduce carbon output. There is nothing wrong with that, but after we have done this for a decade or so, and the British public have got fed up wearing the economic hair shirt that will be put on them, see the rest of the world producing massive quantities of carbon, and see our efforts making no impression at all on the global climate and very little impression as an example, they will not want to wear this hair shirt for long. A Secretary of State, far from being under pressure to tighten the targets, is much more likely to be under pressure to loosen them. That is a very important element.
I remember the noble Lord’s contribution on Second Reading. I was constrained from commenting on everyone’s speech at the time, but I thought that his speech was a little more revolutionary than he actually thought. He gave some examples, which I thought were quite practical, of what would happen in the future and he talked about the need for change. He approached the matter from a different direction, but I respected the point. I was going to say that I was stuck for time and I did not want to accuse him of being a revolutionary, but he made some quite revolutionary points on Second Reading. He is absolutely right: if that situation arose, one can imagine the debates that would arise in the country, as well as in both Houses of Parliament, and the pressure on various Secretaries of State to make a policy change; in other words, to make change through legislation. It would be quite substantial if we got to that point. I am not saying that that will not happen; I am saying that we are setting out with the best intentions to give a lead and to be the first nation to put such detail into our legal framework. I think that one other country has partial legal requirements, but not to the extent that we have here.
As I said, we believe that that aspect of what the EFRA Committee said in the other place is quite crucial, but we can see no other way in which to achieve that cultural change within our system of government than by putting the duties into law. That is the reality. You cannot get the equivalent effect without using the law. Civil servants, advisers to government and Ministers have to be reminded from time to time, as we all are, that you cannot do something, or that you cannot not do something, because you are going outside the law. We know the consequences of that, and I doubt that there has ever been a Minister in office who has not been reminded that they are expected to follow the law. There are degrees of discretion, but this must be looked at in the constitutional sense rather than in the sense that you have gone over the traffic lights and there is a fine. The objective of putting this into legislation in this way is to make that cultural and behavioural change in the Civil Service and consequently in government. I have no doubt that we will come back to this; as my noble friend Lord Campbell-Savours says, there is more than one way in which to do this.
The choice of words in the amendment to replace two words makes the amendment rather long, although, as I said, I am not saying that everything is perfect. The Committee knows what the Government’s intention is, and was when we drafted the legislation. We may not have interpreted the purpose of the amendment in the way in which many noble Lords who have spoken tonight have done, but we will reflect on it in due course.
If the Minister is the Secretary of State and the Bill has been passed and has become law, what does he have to do in the next five years to fulfil that duty? Is it a matter of taking the timescale and dividing it in a linear way? How would he determine whether he was complying with the clause? He has not answered my noble friend’s question about what would happen to him if he did not. I am more concerned about how a Secretary of State actually organises himself to comply with the duty and to be seen to comply with it. That is a very difficult duty to have thrust on you.
Yes, it is. I fully appreciate that. To comply with the duty, the Secretary of State must first inaugurate with his colleagues across government a range of policies—there is no single policy initiative, and I do not think that anyone is claiming that there is—that lead to achieving the target of at least 60 per cent, as in the current legislation. Those policies must be tested independently by the Committee on Climate Change and the court of public opinion, and the Secretary of State must make the necessary changes. We did say on Second Reading that the consequences of climate change, and the consequences of the Bill, will change how society operates and how we live. They will affect everyone in the country. As Stern said, the earlier we do this, the less the disruption and the cost will be. The later we do this, the greater the disruption and the cost will be.
A thought has just crossed my mind. Presumably, the Secretary of State would be open to judicial review. Someone could take him to court if they thought that he was not doing what the Act tells him to do. Is that a satisfactory answer? We are all on the same side as the Government on this, but I simply do not understand the clause, which seems to be a terrible muddle. That is all. I know what the Minister is trying to do.
I may be explaining it inadequately. The answer is probably yes, depending on the policies that are being proposed. As I say, this is not a question of going over a red light or the speed limit and getting a fine. That is not the kind of penalty that is implied. The penalty is, if you like, parliamentary opinion, the court of public opinion, and the opinion of business. There has to be a degree of certainty about the policies.
This is not just about individuals: businesses will have to change. A lot of businesses will grow. Businesses that do not exist at the moment will make a lot of money and there will be more investment because of the changes that will happen. There has to be a degree of certainty and confidence. That will only be tested by the operation of the individual policies. From time to time, governments are open to judicial review, but the case would have to be made.
We recognise that this is a difficult issue. There is no perfect answer, but I hope I have explained why we drafted the Bill in this way. We are quite happy to see whether there is another form of words that satisfies the opinions of the Committee and the Joint Committee, and describes what we want to do, which is to get that change inside government—that is what this is about. This is not necessarily a change for Ministers. It is about the advice that Ministers receive and the way they operate on it, bearing in mind that they are required to stay within the law. That is the fundamental point: if there were no requirement to stay within the law it would not be so meaningful. The advice that they receive is pretty important in that respect.
I am extremely grateful to all Committee Members who have taken part in this debate from all sides of the Chamber. I believe that we are all pushing on the same door: it is a question of getting that door open in the right way to make sense of the Bill. The Minister gave a very full reply and I was particularly grateful for his penultimate sentence when he said he would look again to see whether there were better wording.
I want to press him on an earlier point. He said that if a department went against the wording of the Bill as amended there would be major problems. Could he identify what those major problems are and what are the solutions, because that might help us? He also said that the amendment would weaken the Bill as drafted. Yes, I admitted that right at the beginning. It was one of the problems that the committee toyed with. We could not get the right wording because we felt that whatever we came up weakened the Bill. But we also wanted—and this is clear in our recommendations—to make this enforceable. If we use the word “ensure” when Britain will be the lead country in the world, any country can turn round and say, “You can’t ensure it. This is all just a pretence, spin, a sham”. That is what is wrong with the word “ensure”. It cannot be enforced. It sets a very bad example both nationally and internationally.
We need to give a lead. We need to be able to set an example that others can follow. If we are to do that, we have to get this part of the Bill absolutely right. The wording is crucial. I know that the Minister listened to everybody in the Committee and there is a common theme here that this part of the Bill needs to be looked at. Has the Minister any further points he would like to make on the major problems? Could he come back to me at another stage?
Perhaps the Minister might write to me about the major problems and put a copy of his letter in the Library of the House because that would help us. Again, I thank all Members of the Committee and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6: Clause 1, page 1, line 5, leave out “net UK carbon account” and insert “quantity of UK greenhouse gas emissions released to the atmosphere”
The noble Lord said: The Minister might be slightly relieved to hear that this is a probing amendment. We move from what I would call the hard intricacies of the practice of government in this country to the more ephemeral subject of leadership, to which the Government have pretensions on a global scale, which the right reverend Prelate the Bishop of Salisbury has already mentioned.
The Government wish to lead the world in the control of carbon emissions in order to limit global warming. That is certainly an ambition that we would all support, but in the first line we have yet another set of words that, in my view, are far weaker than they either should be or need to be. I read the “net UK carbon account”, not with despair but with horror.
First, we should go through the background a little. We certainly do not lead the world at the present time. Other European countries are ahead of us in some regards. France is a unique country, curiously enough. In some ways it is fortunate for the whole world that its nuclear programme in the 1970s and 1980s is outwith the timing for Kyoto, which begins in 1990. France is unique because it is the only developed country in the world that I have seen that actually has a reduction plotted on a graph of its national carbon dioxide emissions. It is possible to go on to the internet and pull down the carbon performance of practically every economy in the world, and they are all plotted in graphs, which rise consistently, with the exception of France. With its nuclear programme in the 1970s the 1980s, France’s carbon dioxide emissions diminished.
One other country has a similar reduction—Russia. But Russia achieved it through total economic collapse, which I do not think any of us would accept as a practical or sensible policy. Germany is way ahead of us in the field of microgeneration, because it has very effective lead-in prices. One could go on.
This legislation is significant if we are to get the initiative into this country, but we have to walk the walk and not talk the talk, hence this particular wording—the first line in the Bill, about which we keep arguing. Why do we have “net UK carbon account”? I accept that it is a commonly used phrase and it is easy to slip past it, but the implication is that we can offset some of our emissions by actions that we take in third-party countries. We can continue with carbon emissions by aiding others. Again, that is all very worthy, but it is shilly-shallying. In effect, wealthy countries can purchase the right to continue doing what we do by aiding other countries. In a global sense, I accept that that will reduce carbon dioxide emissions, but if we want to lead, we actually have to reduce our emissions ourselves. We have to get our emissions all the way down, so I object to that particular wording.
I then looked to see what the Bill actually had to say about those words. It is worth doing that. If Committee Members look at Clause 70 on page 29, there is a list of defined expressions in the Bill—definitions. On page 30, line 20 directs us to Clause 22 (1), which states:
“Net UK carbon account
(1) In this Part the ‘net UK carbon account’ for a period means the amount of net UK emissions of targeted greenhouse gases for the period—
(a) reduced by the amount of carbon units credited to the net UK carbon account for the period in accordance with regulations under this section, and
(b) increased by the amount of carbon units that in accordance with such regulations are to be debited from the net UK carbon account for the period.
(2) The Secretary of State must make provision by regulations about—
(a) the circumstances in which carbon units may be credited … [or] debited …
(3) The regulations must contain provision for ensuring that carbon units that are credited to the net UK carbon account for a period cease to be available to offset other greenhouse gas emissions”.
and so on and so forth. I am afraid that, first of all, a rather shocking image came to mind: that of the Queen of Hearts in Alice’s Adventures in Wonderland, playing a rather politically incorrect game of croquet. I think she said at one stage during that game, “When I use a word, it means what I want it to mean”. The net UK carbon account, bearing in mind all this regulatory process to define it, comes into that category.
Then I thought that perhaps I was being a little harsh, so I thought of a more appropriate metaphor. We are appointing a whole lot of people, all of whom are going to be involved in a marathon. The Government, and particularly the Climate Change Committee, are leading us to the start line, or whatever we finally call it when we get to that. Having got us more or less to the start line, the Government then appear to say that they have not quite decided where the finishing line is yet; that will be done by regulations at some point. That weakens the whole first line of the Bill.
This first line of the Bill is going to be the one line that most people read, so we need it to be absolutely clear. Therefore, I have suggested that we use the greenhouse gas emissions wording of my amendment to improve clarity and, more importantly, for a psychological improvement in leadership. Of course it will, technically, be a slightly more difficult target to meet, but in the mysterious psychology of the world of leadership—if that is what the Government aspire to—it will mean a great deal more for this country abroad than the present wording, however much that may be common practice in the relation to emissions and global warming. I beg to move.
This amendment, which I like very much in principle, highlights one of the main dilemmas of this Bill: are we talking about de-carbonising the UK economy, or about doing some of that and then helping the rest of the world, which we count to our own benefit at the end of the day? Amendment No. 8, tabled by my noble friend Lady Miller of Chilthorne Domer, looks at a similar issue. I shall reserve my longer remarks for that. In terms of leadership and our global position in negotiations, it is very important, as the noble Lord, Lord Dixon-Smith, has said, that it is seen as certain that we are looking to take the major hit in our own carbon emissions, rather than helping to stop others, noble cause though that may be. From these Benches we very much support the principle of this. We believe that there should be an ability to trade on the way towards these targets, but by 2050 we need to have met this as an economy ourselves, whatever route we take.
I support this amendment and I am minded to do so because of a remark made by the noble Lord, Lord Rooker, when summing up on the previous amendment. He said that several companies would make a lot of money out of this. If these harsh duties—I use the word advisedly—are imposed on industry, society and government, which is what the Bill will do, somebody will come along and say that they can sell us a widget for one and sixpence—or £20, or whatever the sum may be—to help us do this. There is going to be an immense incentive for companies to invest in things that will help us. That is how we are going to conquer this problem. We will conquer it more by investment and intelligent science than by exhortation. We must create the right climate for investment and intelligent science. That is why I support what my noble friend has proposed.
We had some sympathy with this amendment, but it is a bit of a curate’s egg; it is good only in parts. I had thought that my noble friend Lord Dixon-Smith was trying to include all the greenhouse gases in the target figure in line 1. I thought that was good. If the goal is to stop global warming, all contributions to the problem should be taken into account. The very first page of the Climate Change Bill says that it is a Bill to set a target for 2050 to reduce targeted greenhouse gas emissions. That is what I thought my noble friend meant. Having heard him, the bad part of the curate’s egg is the whole bit about not netting off the emissions. I know that overseas carbon credits and what the right emissions netting-off ought to be will be discussed later. There is room for some sort of overseas carbon credits and, of course, carbon trading to be taken into account. I do not think we support that, because my noble friend does not include the word net. We think it should be in there, so that overseas carbon credits and carbon trading are taken into account.
I speak along the same lines as the noble Lord on the Opposition Front Bench. This would strike at the very heart of the idea of getting emissions reductions where they are most effective and most cost-effective, driving a cart and horses through the whole idea of trading and lease cost. I am presuming what the outcome is, effectively, for example, in the EU Emissions Trading Scheme. It would mean that every country in Europe would have to achieve the same level of reduction, even if that is nonsense—as it is indeed, even though the noble Lord shakes his head. If everybody in Europe agreed, there would be no net trading between the member states. Regardless of the position and circumstances of each country, they would all have to achieve the same reduction. That simply cannot make sense. It will, over time, be clear that some countries, some parts of countries and some industries will be able to secure improvements in reductions better than others.
I sympathise with the noble Lord. There are two separate points here: one concerns measurement and the other concerns trading. The two are related but are not the same thing. I will come on to this point on Amendment No. 8, but the whole point is that trading systems allow that great efficiency for which we all wish. At the end of the day, how you measure a country’s performance can be separate from that. It does not in any way stop trading taking place.
This goes to the heart of one of the problems in taking a series of amendments in isolation from the others. Amendments have been tabled that propose that the target should be 80 per cent. This amendment says that these must be actual reductions in the UK without allowing for net trading to improve that. Another amendment proposes that there must be a defined limit to the amount of trading there can be. If you put all those together, and if that was the position that we wanted to advocate to every other country in the world to get support in international agreements, I have to tell the Committee that we would not get international agreement on any of those things. If you take one proposal in isolation, that is not too bad, but if you add up the thrust of the amendments from the Liberal Democrat side, there would be a very high reduction from the UK and you could have very little net trading at all. Then you would get a very tough regime, which would mean effectively that every country would adopt a stand-alone position. I suggest that is not a position that lends itself to getting international agreement.
My noble friend Lord Woolmer almost stole my central point, but it is a good point to make. The amendment would end our participation in the EU Emissions Trading Scheme straight away, leaving aside everything else. The noble Lord, Lord Teverson, shakes his head but the fact is that that is what it would mean. Amendment No. 6, as drafted, would be incredibly restrictive on our capacity to take action.
In its report, the Joint Committee noted the concept of the “net UK carbon account”, and stated that therefore,
“the draft Bill represents an important development in the nature of UK targets for carbon reduction”.
Deleting the concept of the net UK carbon account would mean that emissions reductions supported by UK companies or the Government which took place outside the UK could not be counted towards our 2050 target. It is as simple as that. This would be the case regardless of whether these carbon units represented low-carbon investment in developing countries through the UN’s Clean Development Mechanism, or whether they represented the efforts of UK companies to meet their targets under the EU Emissions Trading Scheme by trading with other companies elsewhere in the EU—as they are allowed to do under EU law.
Amendment No. 6 would therefore significantly increase the cost of meeting the 2050 target. Unless I have read my notes wrong—and I would be happy to take advice on that—and I know that we are in 2007, and 2050 is 43 years away, but I have a figure in front of me of £5 billion more that would be needed to meet our target than would otherwise be the case. That is a lot of money in anyone’s book. I understand the approach that was pleaded for at Second Reading, that we might start off being able to purchase and offset abroad but that we would gradually move away from that over a period of years. However, this amendment would not do that; far from it, it would go straight in. So it would straight away undermine the international approach to tackling climate change. That would not help anybody. It would not help the UK give a lead to other countries and the planet. We will meet our targets and we will ensure—if I can use that word—that the Secretary of State operates to meet them through both action to reduce UK emissions and action to support other countries in reducing their emissions. We need to do this in line with our EU and international obligations. That is by far the best way of doing it. We are strongly committed to the international principle set out in the Kyoto Protocol that the use of the international mechanisms should be “supplemental” to domestic action set out in the Kyoto Protocol.
The concept of the “net UK carbon account” recognises that our targets can be met through both action at home and action overseas. We shall have other debates on this aspect but the narrowness, harshness and simplicity almost of the approach of the noble Lord, Lord Dixon-Smith, is such that it is completely impractical and outwith what we seek to do. It constitutes a costly approach that would completely ruin all the arrangements that are in place, and will be put in place, for trading by UK companies to help us achieve this target. That is not in anybody’s interests and I do not think that is what the noble Lord wants at the end of the day anyway.
The Minister is quite right but I wanted to have this discussion. As regards leadership pretensions, the Bill will be thoroughly dissected by other countries and we need to be absolutely certain about which bit of ground we are standing on. To some people the relevant phrase will look like weakness, and we have to recognise that. I accept the practical realities of the situation. The noble Lord, Lord Woolmer, is quite right; we certainly do not want to become isolated on this issue, and I had no intention that we should. But the other way of looking at this—if we qualified it a bit—is that it would set a rather more severe and challenging 2050 target. One could perhaps come back with an amended amendment that would do that. However, it was important to have this discussion and I do not apologise for having it. Too many aspects of trading in carbon swaps and carbon offsets have, frankly, verged on the fraudulent. Even with the United Nations clean climate initiative, there are still large question marks over much of the trade that goes on because it is not a universally accepted standard and so there are very real difficulties with it.
There was even a report in the Financial Times some months ago that the Chinese were thinking of bringing in a tax on the payments that investors in carbon saving technology were receiving because for some Chinese firms their income from these carbon offsets was greater than their income from anything else. I did not like the idea that we should make that sort of fiscal contribution to the Chinese Government. So the question of this international trade in carbon certificates needs very strong and internationally agreed controls. It does not yet have that. For so long as that is the situation we shall have trouble in this area.
This has been an extremely useful discussion. I am very grateful to those Members of the Committee who took part in it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7: Clause 1, page 1, line 6, leave out “60%” and insert “80%”
The noble Lord said: We come to targets. The Joint Committee on the draft Bill was aware that the important thing at the end of the day is not to meet a 50, 60, 80 or 100 per cent carbon reduction by 2050 but to address the issue of all the tonnes of carbon that will be put into the atmosphere between now and 2050. That is what affects the climate, not meeting a 60 or 80 per cent carbon reduction by 2050. Although that issue is included in the Bill in terms of carbon budgets, it is very difficult to refer to thousands of tonnes of carbon being put into the atmosphere as a target within the Bill’s objective.
We agree that there should be targets but it is important that they should be realistic and that they fulfil the objectives of the legislation. I believe that the 60 per cent target was set by a Royal Commission some years ago. We are all aware that the climate change science and our understanding of how global warming works have progressed hugely since then, and, indeed, since the draft Bill was published earlier this year. The IPCC itself has said that to keep within the limit of 2 degrees centigrade on a global basis we shall probably have to reduce carbon emissions across all nations by some 50 per cent by 2050. We believe that to achieve a fair and equitable solution for developed nations that figure needs to be something in the order of 80 per cent.
There are three ways of approaching the 60 per cent target in the Bill. Either we can decide to take out the target altogether and do what the Government suggest later in the Bill, which is to ask the committee to come back in a few months—I cannot remember the timescale—to give us a scientific, authoritative, well considered litmus test, as it were, of what we believe the target should be, so that we can agree to that target in due course. Alternatively, we can stay with 60 per cent. Frankly, that is the worst option. Putting in what everyone accepts is the wrong figure would be wrong not only for the United Kingdom but also for our position globally. The third option is for us to put in the figure that we feel is, given that this is not an exact science, most realistic and most likely.
We believe that 80 per cent is the right figure to put in the Bill. To back up my arguments, I quote two prominent Labour Party members. The first is the Prime Minister, who said in his 19 November speech that,
“the evidence now suggests that, as part of an international agreement, developed countries may have to reduce their emissions by up to 80 per cent”.
The other is the Mayor of London, who,
“supports an amendment to the Bill to reflect the 80 per cent 2050 target at the very outset”.
We believe that it is important to have a target. That target needs to be realistic and the best understanding at this time is that 80 per cent is such a target.
The other concern—this is a correct theme of the Government—is that the business community, which has to deliver a huge proportion of this commitment, has to have a degree of certainty. However, there is almost a guarantee of uncertainty in the 60 per cent target. Keeping a target until the Committee on Climate Change has been appointed, considered the evidence and come back within the time constraints would actually delay a decision. There is much greater certainty if we go for a realistic and a best figure now. Again, I applaud the Government’s wish to lead globally on the targets, but that lead can be preserved only if we have a target of 80 per cent in the Bill now. I beg to move.
Much hangs on targets, but we do not see this amendment as relevant to the Bill’s intended operation. Our position is that the Committee on Climate Change, not the politicians, should set the targets. We see the committee as being science-based; it should bring its scientific expertise to the task. The Bill, as the Minister emphasised, refers to a target of at least 60 per cent lower. We believe that the reduction may well prove to be higher than 60 per cent. We are all talking in this manner, but we are all aware that many NGOs are talking of an 80 per cent target. The Minister has told us that setting this target is an early task for the Committee on Climate Change. We believe that that target is best determined by the committee on the basis of the evidence and with its scientific evaluation. Our approach will lead to a more authoritative outcome, acceptable to Parliament and to the people of this country.
I was involved in quite an interesting debate on these matters yesterday evening with a number of colleagues. I left the meeting in the belief that we should set an 80 per cent target in the Bill, but I am now not altogether convinced that that is the right way to proceed. My view is that we should not refer to 60 per cent. It is a dangerous figure to put in the Bill. It would undermine the credibility of a Labour Government and it would send out the wrong message to NGOs. We have two options: either we put nothing in the Bill and leave it to the committee, or we put in a target of 80 per cent.
I have consulted people in the trade unions on these matters. As my noble friend will know, the general view in the unions—particularly Unison, with which I have talked at length—is that a target of 80 per cent should be set. However, it might well be best—I take the view of the opposition Front Bench on this—to say nothing at this stage and leave it to the committee to decide. At the heart of my case is the belief that there should be no reference to 60 per cent. That figure is dangerous for our credibility.
At the end of discussions in the Joint Committee, my view was that it was right to have a figure of at least 60 per cent in the Bill. However, I have come to the conclusion that circumstances have changed sufficiently, even since last summer, to make it right to include 80 per cent. As the noble Lord, Lord Teverson said, the Prime Minister has already spoken of recognising that up to 80 per cent is likely to be the amount of reductions needed. We know that other countries are moving in that direction, too. France is considering legislation that would provide for emissions reductions of 75 to 80 per cent by 2050. The German Government have announced a legislative package incorporating cuts of 80 per cent by 2050. In the United States, two of the leading contenders for the presidential nomination, Senators Clinton and Obama, are talking in the same kind of figures.
By sticking to 60 per cent, we will be behind what science—and, indeed, politics—in this country sees as necessary and we will lack that degree of leadership that the Government have rightly taken in the past few years and which they rightly see this Bill as demonstrating again. Eighty per cent is a very ambitious figure, but ambition is what is needed, as we have seen recently in the science.
There seem to be two options: leaving this to the committee to consider or writing 80 per cent into the Bill. If there were genuine uncertainty, there would be a strong case for leaving the matter for the committee to consider, as the noble Lord, Lord Taylor, suggested. However, it seems to me, as I say, that there has been a sufficient movement in both the science and the politics since June for it to be right now to replace the 60 per cent target with an 80 per cent target, both to achieve the goal of the emissions reductions that we need and to continue to show the leadership that the Government have commendably taken up to now and which, I hope, they will continue to take. I support this amendment.
I oppose the amendment. The Bill provides for the Secretary of State to amend the figure. It provides that, when he does so, he must consider the scientific evidence and take the advice of the Committee on Climate Change. It does not provide that the committee should determine the figure. That is no doubt something that we will discuss later and noble Lords will not be surprised if I have a view about it.
We are talking about deciding now that 80 per cent is the figure, when the target of at least 60 per cent was firmly based some years ago. Subsequent evidence should be carefully weighed up. The Bill makes provision for that to be done. In fact, it is an obligation on the Secretary of State to do so and to take the early advice of the independent committee. When all the stakeholders who are subsequently affected ask, “Why is it 80 per cent and not 60 per cent?”, the Secretary of State will be able to provide a coherent argument based on scientific evidence and the view of the independent committee. Then the stakeholders, whose behaviour has to change radically, will have the confidence and security that the basis is one that they can buy into. If the answer is that Parliament, having the Bill in front of it, said, “We think 80 per cent is better; we will take a judgment by a vote on scientific evidence”, that does not seem to me to be the way to get stakeholders to buy into and undertake the necessary change.
I am confident that the way in which the Bill is framed is intended to allow the Government of the day to amend upwards, as it refers to “at least” 60 per cent. That can be done in the light of evidence, so that the stakeholders—who initially will largely be industry and, through that, consumers, although they may eventually, through personal allowances, be people more directly—will be able to feel that this was not about votes by different people about whether it should be 60 per cent or 80 per cent. That is not the basis on which to take people with us. Rather, people should feel that due process has been followed. I would be surprised if the figure is not revised upwards. This contribution is not intended to challenge or question that, but to ask how we get there and how we take people with us.
I rise to follow precisely what the noble Lord, Lord Taylor, and my noble friend Lord Woolmer said. Reluctantly, I oppose the amendment, but not because I do not think that this time next year the 80 per cent figure will have established itself as the norm. There is an additional argument in favour of keeping the Bill as it is. The most important thing that we focused on in the Joint Committee was the credibility of the Committee on Climate Change. It was absolutely fundamental to us that it should be independent, credible and listened to. I can think of no better way of achieving that than through the urgent first job of the committee being to review the process, review the figure, recommend 80 per cent and have 80 per cent accepted by the Government. That would establish that the Government, the Secretary of State and the committee were in lockstep, and it would establish the credibility of the committee. We would earn a lot more brownie points that way than we would by jumping on the bandwagon of 80 per cent, a figure with which I happen to have great sympathy.
I fully understand what the noble Lord, Lord Puttnam, says, but if the figure of 60 per cent goes on being around and in the Bill, that opportunity will not be signalled in the way that it would be if no figures were to go in. I do not know what the Minister is going to say in response to this amendment. He may want to resist it, as he wants to resist most things that are tried at this stage.
The suggestion that we might do better not to have a figure at all puts the onus on the committee more forcefully than having a figure that I have not heard anyone defend. We should not be putting into the Bill at the next stage a figure that none of us thinks is realistic or wants to defend, just because it happens to be there. I hope that the Minister, in responding to the amendment, will say that he will take the figure out. If we just left it there, the signal that we would give to people who read the Bill as it goes through its processes here would be that we are not serious about attempting to up this percentage.
I would very much regret it if we lost any reference to a percentage target from the Bill. If the first clause read, “It is the duty of the Secretary of State to ensure that the net UK carbon account for the year 2050 is at least lower”, it would be a pretty limp beginning to a pretty important Bill. Let us not lose a target. I personally accord with the noble Lords, Lord Puttnam and Lord Woolmer, about the need to get that extra bit of work done to validate an increase in the target. A Bill that says that the carbon account should be at least 60 per cent lower gives us a backstop beyond which we cannot slide and sets us up well for a higher target, whatever that higher target is ultimately to be.
I agree with the nature of the persuasive argument put forward by the noble Lord, Lord Puttnam, that the committee can get credibility by winning a victory that we know in advance it is going to have. Anyone who reads Hansard is not going to spot that this was set up in the first place—
The problem that I have in one respect, following on from the noble Baroness, Lady Young, is that I believe that we should have targets, because that is what the Bill is about. We are saying categorically that we are reducing carbon by the amount that we have to come forward with. It is not a question of greenwashing. This is the purpose of the Bill and what everyone understands it to be. I would support the 80 per cent target because it is the figure that is generally accepted in the scientific community.
If we are not as parliamentarians prepared to make the political decision that that is the way in which we are going to go, with the subsequent costs that there will be on industry, on individual freedoms and on the right to take a £5 flight to Bucharest for a stag weekend, or for any other reason, we are missing an opportunity to make a direct contribution of saying that this is the political will behind the Government. This is a brave Bill, and it says that we are looking towards that.
In a phrase used at Second Reading, I am slightly worried that by saying that we will have the 60 per cent but will move on to the 80 per cent—I do not believe that anyone is really considering taking percentages out of the Bill—we will transfer what should be a political decision on to a committee to make as a scientific decision. Everyone who has read the briefings will realise that 80 per cent is the scientific view. The Prime Minister mentioned in a speech that the Government are seriously considering taking 80 per cent as the baseline target. I very much hope that the Government will decide to do so, because it has been raised by the Prime Minister in a speech; obviously he has not said that it is a policy statement, but it is an aspirational target. As we all have come to agree that that is the very least that we can look at if we are to meet the objectives of the Bill, to pass it on to the committee would be an abdication of our responsibilities.
The problem with the science, if you believe what has been said over the past few years, is that the scientific community might come up with a higher figure than 80 per cent. I do not have a science degree; I have only a degree in archaeology. I personally think—well, I studied prehistoric Europe, and that tells us that within a few decades the land bridge between Britain and France was broken by water. If London happened to be in that area that was flooded, in the space of decades, we would have quite a lot to say about the increase in a couple of degrees or percentage targets. It is very easy to talk about this as if it does not have a great deal of meaning and will not have a great deal of effect within a few decades, but obviously it will.
The noble Lord, Lord Redesdale, partly gave the game away by saying what he personally thought and then going into the science. He said that he was not a scientist, but his personal view was that 80 per cent was involved and he was relying on the science. Around the Chamber, others have been wary of politicians making the change, because we need the scientists to do it. As I said earlier, we do not have the committee, but we will have.
Opening the debate, the noble Lord, Lord Teverson, quoted Prime Minister, who said:
“But the evidence now suggests that as part of an international agreement developed countries may have to reduce their emissions by up to 80%”.
The noble Lord stopped there, but the quote continues:
“So we will put this evidence to the committee on climate change and ask it to advise us, as it begins to consider the first three five-year budgets, on whether our own domestic target should be tightened up to 80%”.
At the time I read that as the Prime Minister giving a lead and as being as near to extending an invitation by the new committee to make the adjustment as you could possible get, without saying that the personal view of a non-scientist is involved. It is best left to the committee—noble Lords have put the case for that. We admit that the 60 per cent target is an old one; it is seven years old. It is consistent with the European Council conclusions in March 2007, which called on developing countries to reduce their emissions by 60 to 80 per cent. The Bill says, “at least 60%” by 2050. The view of Stern was that developing countries needed to cut their greenhouse gas emissions by 60 to 80 per cent. There have been significant advances in science since the 60 per cent target was set—everyone admits that; the Government admit that, and the Prime Minister could not have been be clearer in his speech. We should wait for the Committee on Climate Change before deciding the appropriate target. We want a considered view, based on the best evidence, of the cost of changing from 60 to another figure—I do not say 80 per cent, just another figure.
There will be environmental, economic and social implications of changing the target and operating it. The implications need to be understood before a decision is taken; that is the role of the Climate Change Committee. There is no doubt that there will be economic costs. Stern says that the earlier these things are done, the cheaper it will be. We need to look at the effect of the rest of the world taking meaningful action on climate change; the Committee on Climate Change can do that. On the other hand, what would be the implications of including other greenhouse gases, if the UK was going it alone? We are dealing only with some of the greenhouse gases here. They are all defined in the Bill; we will come to them later on. Before we take a decision of this magnitude, it is important that we have a clear understanding. That view is shared by the two Front Benchers and, probably, the majority of those who have spoken. If there was a quick vote on “Yes or no; what would you prefer?”, the overwhelming majority would be clear: the figure would change. I say that as a non-scientist; our view is to wait for the committee to be set up on the basis of what the Prime Minister said.
Using the legislation and a committee of international repute, we want to send the right signal to other countries about the way that we go about setting our targets. We are entitled as the legislature to do it, but we have to face the consequences. We should do it on the basis of a considered scientific view and come to Parliament on the basis of the best science, not on the basis of an amendment during the Bill’s passage through Parliament. I am not knocking that, but we need a good science base, and an understanding of the economic and environmental considerations and consequences.
Can the Minister clarify whether the Government will take the 60 per cent out of the Bill and leave that for the Climate Change Committee, which is in the Bill anyway, to consider? Or will the 60 per cent figure be kept in? I understand why the Minister is saying that he does not want to go to 80, but is he saying that the figure is going to come out altogether or will it stay at 60?
I think that I am listening to what I said; that is the last thing that I am saying. I was not saying that we will take the 60 per cent figure out. At least 60 per cent has the scientific validity of a seven year-old target—an aspiration—from the Royal Commission on Environmental Pollution. There is a good scientific base for that view. Work has been done, in some respects, into the economic and social consequences of that, which probably have not yet fully dawned on everybody, and we need to pursue that. I am not standing here, on behalf of the Government, accepting the suggestion from my noble friend that we take out any target and leave it all to the Climate Change Committee. Based on the evidence, that would be wrong; the target of 60 per cent is the absolute rock-bottom minimum.
We would lose a lot of credibility. My noble friend will be very isolated outside the House if he said that we should have no target and no figure. We have the scientific evidence for at least 60 per cent, although the evidence is seven years old and science has moved on since then. We have a procedure for changing the figure; that is, through the Climate Change Committee and the relevant legislative framework in the Bill. We would lose an awful lot if we took it out of the Bill, and we would send the wrong signals to other countries. It would be completely misunderstood if we did that and it would undermine the efforts being made in Bali as we speak. We want our targets to carry weight internationally. Obviously, we are likely to get that by using the best and most up-to-date science and the best cost-benefit analysis, so that we do not misunderstand the economics.
There is widespread agreement across society that the changes are necessary and desirable. If the committee comes back with 80 per cent, we have to explain that the consequence is not just changing a figure from 60 to 80—if that is the figure that it chooses. The economic and other consequences have to be sold to the wider society. There is no question that there would be substantial changes.
My noble friend talked about losing credibility internationally. The international community knows the figures. It knows that the 2 per cent figure does not stack up with 60. It will say that the Brits have got their figures wrong because the figures do not add up properly. How will we answer that in terms of credibility internationally?
I am sorry, I did not quite follow what my noble friend said. If we take the figure out we have no figure; we currently have a figure of at least 60 per cent. It is known publicly and internationally that the Prime Minister—the leader of the Government—has already said that the new Committee on Climate Change will be asked, as its first operational task, along with setting the first budget, to see whether the figure should be changed in view of the scientific justification and the economic consequences that would result. It could not be clearer internationally that the Brits are on the move. That is the signal that will be sent. If we took the figure out, it would be sent the opposite way; we would be moving backwards. You would need a lot of spin to explain that one, and I am not good at spin. We agree with the Joint Committee that a credible way forward is to ask the Committee on Climate Change to look at all the evidence and come up with the right level for the 2050 target. The committee will have the independence and resources, the economic and scientific knowledge expertise to review it, and it will be asked to do so at the first available opportunity.
When is that first opportunity likely to be? Given that other states with which we want to maintain credibility are moving rather more quickly towards an 80 per cent figure, does the Minister not think that, unless we have an 80 per cent figure one way or another, there is a risk that we will be catching up with them rather than leading them?
I understand that we shall have a debate on that very point after the dinner break. I can pontificate because I roughly know the planned timetable for the Bill—to get Royal Assent in the spring. That is the objective; it has to go through the other House, of course. Before then, the climate change committee will be set up in shadow form—the chair and the members—but until the Bill gets Royal Assent, it will not have authority to start the operation. The secretariat has already been set up to serve the climate change committee, but we shall probably have a bit more detail on that on Amendment No. 10.
Given what we have said about the committee and the way in which it will be put together—its independence, and the fact that whatever it comes forward with will have economic and social consequences and a science base—it would be a rash Government who dismissed any of its suggestions out of hand.
I thank every noble Lord who has contributed to the debate; I found it most useful. The Minister said something towards the end that could be slightly dangerous, although he did not mean it that way. It was the idea that the Prime Minister had suggested 80 per cent, so there could be no greater indication to the climate change committee of what the figure need be. In a way, that is then almost the last number that we want the climate change committee to come up with, because its independence in the future would be seen as nothing. We might hope that it comes up with 81.75 per cent as the right number.
More seriously, I made it clear when I moved the amendment that I was not saying that there was a perfect answer to deal with the issue in the Bill. The absolutely logical way was suggested by the noble Lord, Lord Puttnam: that we take everything out, let the experts pontificate—although we understand that this is an inexact science, let alone the subject of the UK’s obligation within a broader, global analysis—the committee comes back and makes a technical recommendation, and the Government make a political decision on that technical evidence. As the Minister said, however, that takes the stuffing out of the Bill; it would look a weak Bill and would have to be changed in several areas.
There has to be a number in the Bill. From these Benches, we are saying that rather than going with what is clearly a wrong number, we should note the scientific consensus—if ever there were one—that the nearest round number is probably 80 per cent. That is why we suggested it. We do not say that it is perfect; we wish to find a way forward. Liberal Democrats would say that we should have a carbon-neutral economy by 2050, but we are trying to get consensus in the Committee on something that will work. We look forward to debates on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8: Clause 1, page 1, line 8, at end insert—
“(3) The 2050 target must be met by emissions reductions achieved within the UK.”
The noble Baroness said: The amendment returns us slightly to the subject raised by the noble Lord, Lord Dixon-Smith, in his Amendment No. 6, but I am glad that we can have this debate again because we have just had a debate on the target. The point of my amendment is to flush out exactly how wobbly the target is, whether it is 60 or 80 per cent, given the amount of international credits that can be used when it comes to the UK’s own emissions reduction. The draft regulatory impact assessment suggested that the UK’s emissions might be reduced by just 40 per cent by 2050, given the use of all the international credits.
Part of the point of the Bill, besides setting the targets, is to create two things. The first is certainty for business. How much can it invest? Are we driving Britain towards a low-carbon economy, and if so how fast? The second is the seriousness with which we will take behaviour change. Those two things are the key to the success of the Bill. If we aimed to achieve most of the target within the UK, that would be a clear signal to industry that emitting carbon would become increasingly expensive, because the Government will have to introduce extremely harsh policies to reduce emissions or they will miss the target. As the Bill is drafted, the unlimited potential for the use of carbon credits undermines both objectives of investment and behaviour change. I am looking, in the Minister’s reply, for how he will create the atmosphere of certainty while allowing so much flexibility within the international trading scheme.
I would not want to overplay the down side, however. In allowing emissions to be offset by carbon credits, the carbon price will be substantially reduced. In some ways, that is not a bad thing. The theory of emissions trading emphasises that a reduction of 1 tonne of greenhouse gases is equal anywhere in the world; we all accept that. We have already heard today the argument that, instead of pursuing expensive reductions at home, it is cheaper—I think that the Minister said £3 billion cheaper—for the Government to invest in projects that will reduce emissions abroad. Of course, on that side of the argument he did not state that, by creating a really low-carbon economy here and leading the technology, you are likely to arrive at a far higher figure in terms of net income to the UK, because we will be leading an economy that the world will be hungry for. He should balance his arguments in that way.
We have talked about the principles of supplementarity, and I am sure that we shall return to those issues as we go through the Bill. The principles of supplementarity and differentiated responsibilities are enshrined in the UK commitments under the UN Framework Convention on Climate Change. Those principles emphasise that developed countries are high emitters, historically, and that developing countries have a right to sustainable development. The developed world must take the lead by demonstrating that it can reduce emissions at home. There should be strong statements in the Bill. I have tabled amendments to make sure that the monitoring and assessing of how much of the target is met by foreign trading will be clear. As the Bill is drafted, it can be left opaque, which would be disgraceful. Unless we are clear on those issues, that will undermine two of the fundamental purposes of the Bill. I beg to move.
I would genuinely have liked to have supported the noble Baroness, Lady Miller, on her amendment, particularly if it had been grouped with Amendments Nos. 25, 27 and 111. On its own, I find it impossible. If it had included “principally” or some other form of words, perhaps I could have supported it. However, I support the principle of what she said—that when we get to Amendments Nos. 25 and 27, that is the core of the credibility of the Bill. However, placed where it is, the amendment does not achieve its laudable aims.
I support the amendment. I want to be clear about what it does. It does not stop carbon trading from happening during that period at all; we will come to how much that should or should not happen later in the Bill. The amendment says that by the time you get to 31 December 2050 you must not only admit your carbon budgets but have bitten the bullet as an economy and decarbonised yourself, so that in that last spilt second—as it could be under the amendment—you have reached a 60 per cent, or whatever, carbon reduction in the economy. You have not only gone through the carbon account process but have avoided hypocrisy, done the business and, at the end of the day, have actually delivered that percentage reduction yourself.
The noble Lord, Lord Woolmer of Leeds, earlier raised whether that stops carbon trading. Of course it does not. I have gone through this several times in my own mind. It is a bit like measuring hospitals on outputs. You might measure surgeons’ success rates or turnover of hospital bed usage, but that does not mean that you stop the hospitals doing all the other things they must do. It is just that you measure particular things because that is what you are trying to do. While you might be moving towards an actual 60 or 80 per cent decarbonised economy, on the way you have the EU ETS, for which I am a strong missionary. All that still goes on, because individual businesses are trading under a cap-and-trade system, so that cap is coming down. All the advantages that we know of in trading systems, such as exiting the most costly areas first and making the best, least cost, benefits first, still happen. All of that economy still goes on; the amendment does not preclude it.
What the amendment does so well is say that, at the end of the day, the UK economy itself must be decarbonised. The trajectory of getting to that can happen through trading. Even between now and 2050, you can still have trading which counts towards targets. At the end of the process, however, you must get to that saving. That is why the amendment is particularly strong.
I can see that I am losing the attention of the Committee, so I shall sit down.
I take up the noble Lord’s point. I am pleased that he is supportive of carbon trading until 2050. It is absolutely certain that if the amendment is passed, in 2050 it will be killed stone dead. Buying carbon credits would have no value whatever to a UK business because it would not offset anything. That is exactly what would happen.
If all the European Union and major industrialised countries were persuaded of that, India, China and other countries, having got a lot of benefit from investment in helping them to reduce emissions, would suddenly find that, by law, companies in this country would have no incentive to invest in carbon emissions reductions there. The noble Lord says in support of the proposal that he is in favour of emissions trading now, but there will on balance come a time where that will not be of any value. Carbon trading, after all, takes place only because it has value. Under this proposal, in 2050, it would have no value to a business in this country. We have made a great point about this being a leader in helping international negotiations but we will be giving a message to the countries that might need investment that, come 2050, it will stop.
The noble Baroness made a point about the impact assessment. I have had a note to that effect. I will obviously do as much as I can to assist in the next stage anyway, so if issues arise I will do my best to answer them. But the impact assessment did not say that we would reduce UK emissions only by 40 per cent. It simply looked at the cost of preventing the use of international credits. As an illustration, it estimated that allowing some international trading could significantly reduce the costs of meeting the target. These were indicative estimates, not a statement of government policy.
I am now bewildered because, for all practical purposes, the responses I have for Amendments Nos. 6 and 8 are the same. Contrary to what the noble Lord, Lord Teverson, has just said, the practical effect of the amendments would be so significant that it would remove our ability to count the purchase of carbon units, whether through the emissions trading system or Kyoto Protocol, towards the 2050 target. So it would mean vastly increasing the cost of meeting that target.
The idea that we carry on as we are and stop trading in 2050 is not practical. I am prepared to have the lawyers look at this, but I am talking about the effect of the amendment. I know that we are in Committee and one wants to probe the issue, but it would kill trading stone dead. That is the issue, and it would not wait until 2050 to happen. It would increase the cost of meeting the target by removing the option to trade. As we have already announced, the Committee on Climate Change is going to review that target, so we would prevent the UK from using any international credits and make that target more costly, which would be a real problem. As I have said before, our objective is to meet the targets under the Bill through both the action to reduce the UK emissions and supporting other countries in reducing theirs. We want that commitment of international supplementarity to be a reality.
This is not a get out. I know that it has been said before, but it is worth making the point: environmentally, it does not matter where on the planet the reductions take place, so long as they are proper reductions—that goes without saying. International reductions must be quite legitimate. It does not matter where they are, because a tonne of CO2 emitted anywhere is still going to be damaging. Emissions trading will work by allowing emissions to be reduced in the most cost-effective way. As I have said, our analysis of the costs of meeting the 2050 target concluded that emissions trading would allow us to meet our targets, and with the same environmental benefit, for £5 billion—not £3 billion—less than otherwise. The analysis published by the European Commission on meeting Kyoto targets confirmed this, finding that the costs could be reduced by a third through emissions trading.
Done properly, emissions trading is of course an important source of income for developing countries. That is internationally accepted and I have other figures that support that case. If the idea is to stop anything that does not work in the UK—and that rules out the European Union as well—then we must clearly say so in the amendment. If it is thought morally wrong to go trading, then it must be dealt with in another way altogether rather than making a case, as the noble Baroness did, of which the practical consequences are to rule out emissions trading full stop. That effect would not wait until 2050; that is my point and the advice I have got. It may be looked at again in later stages of the Bill, but that is the practical consequence of the amendment, or anything similar to it, being carried.
I have obviously been utterly ineffective in explaining this. One decides what to measure and businesses or industry—not governments—make decisions about whether to trade under an ETS. Governments set the cap through the Commission, through national allocation plans, and trading takes place. That can continue ad infinitum, whether this amendment has been accepted or not. The amendment determines what you count. The Government already have a purely UK emissions target without any trading and they will probably miss it. I think the target is 20 per cent carbon reduction by 2010. There is no difference between that being a target or that being law, but having that target does not stop the EU ETS happening now any more than the amendment would stop that happening in the future. It concerns what you measure, not what you have to do. Clearly, the EU ETS will continue and we hope it will be very successful in making carbon economies throughout Europe far more efficient, but it will not stop because you measure something that is different, just as the purely UK targets for carbon reductions, which allow no buying-in or buying-out, do not affect it either. They are exactly the same.
I am far from expert on this. On emissions trading, what does not count towards our UK target? The UK target is in place—whether it is 60 per cent or 80 per cent does not matter. The Secretary of State is duty bound to ensure that that takes place. So any business that wants to trade—whatever the costs, whatever the effect—would ensure that the trading would not count towards the UK targets.
I shall give way when I have finished this point otherwise I will lose my train of thought. I am happy to give way, but I do not have to give way the instant the noble Baroness, or anyone else, stands. I shall finish the sentence then I will be happy to give way. I have no problem with that. Now I have lost my train of thought.
I wanted to help the Minister to understand. I accept that he has parliamentary counsel and that the wording of my amendment might be slightly wrong so that it means something slightly different from what I want it to mean. However, rather than the Minister spending time splitting hairs over the exact meaning of the amendment, I would rather he answered the substantive point about the investment certainty for UK low-carbon technologies and behaviour change, which I hope were the substantive points I made in speaking to the amendment.
The amendment would cause disruption to the pattern of business and investment. Their offsets from trading would not count towards the UK target. I emphasise the phrase “the practical effect”, which I have in front of me—I am not splitting hairs over this—as the practical effect would be to stop trading straight away. The consequences of stopping would probably have a major impact on investments relating to creating a low-carbon economy—the very point that the noble Baroness and I agree on. The point I made to the noble Earl, Lord Onslow, was that new, successful businesses, new investments, new assets and new resources will be created in this country as a result of these targets and that that would be put severely at risk because of the disruption of the practical effect of the amendment. That is the simple answer.
We are having this argument a second time. I find it slightly difficult to understand why there should be one rule for one amendment and a different rule for a different amendment, according to some minds. We need to recognise what the Minister is postulating as an end game when we get to 2050. As far as I can see there is no such thing as a completely carbon-neutral economy. Certain industries will still require fossil fuels to operate. The obvious category is the smelting industry, which reduces metal ores to basic metal. Coal is used there not as a fuel to produce heat but to produce a chemical reaction. The cement industry has the same problem. Those industries will continue to use coal whatever happens if we are to have a supply of the raw materials that we shall continue to need and, more importantly, the raw materials that will be needed on an ever-greater scale globally for population reasons, as mentioned by the noble Lord, Lord Stoddart of Swindon. We may well find that, because of fuel density, aviation has to continue to use fossil fuels, and shipping may have to for similar reasons.
We cannot conceive of being without any of those industries in a modern society if development is to move forward. There will be a base line requirement to use fossil fuels, about which we can do nothing, but that does not mean—this is where the Minister’s argument fascinates me—that we should not have trading. It might mean that our target should be more than 100 per cent. I think that is where the logic will take us in the end. Not only will we require to use fossil fuels but so will every other country. The developed world can gain a very real benefit through the trading scheme in investing in other countries so that their benefit in carbon-free development helps us to continue with these fundamental industries about which we will probably be able to do nothing. That is where we are heading. Those industries will be required in third-world countries which at present probably do not have them, or they may not have the raw materials. We could be looking at that end game and it could be that the 80 per cent target beyond 2050 will have to be stronger than that; it may finally become greater than 100 per cent for economies such as ours. That will not matter if one accepts that 20 or 30 per cent of what actually happens is as a result of trading. That is perfectly acceptable.
While the noble Lord was speaking I could not remember whether I had sat down or whether that was an intervention. I think I had sat down, but the noble Lord has invited me to answer. I am not qualified to postulate on the issues that he has raised. People may challenge what he says about the long-term reliance on fossil fuels. It is right that those industries need to survive, but the fuelling system may change. Fossil fuels may not be needed for aviation or for smelting operations. Some people may challenge that in the long term—in 43 years. I am not qualified to respond to what the noble Lord has just said.
I am grateful to the noble Lord, Lord Puttnam, for his support at least for the spirit of the amendment. My noble friend Lord Teverson had the idea better than the Minister that this is a snapshot of where we should be by 2050. I say to the noble Lord, Lord Woolmer of Leeds, that if we still have a really healthy carbon trade in 2050, we shall have failed worldwide because we do not want that much carbon to be traded. Internationally, we must have low-carbon economies. Although I completely accept that some things will still be carbon-hungry, we will also have developed such things as carbon sinks and some of the exciting things that were expounded such as carbon-eating life forms.
There is much to think about. The Minister said that the RIA was only an indicative estimate. I am not sure of the difference between an indicative estimate and actual figures. I was working from the best figures which were an indicative estimate. I hope that by Report we will be much clearer about what we mean by the UK target and how much of that will be achieved within the UK. The purpose of the amendment was to explore those very difficult issues. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 9 had been withdrawn from the Marshalled List.]
Clause 1 agreed to.