Greenest government???

Last week the Prime Minister appeared in front of the Liaison Committee which is made up of the Chairs of Commons's Select Committees.

A part of his appearance was given over to the environment.  He didn't seem as at ease on this subject as he did on most others.  And both the questioning and the answering stuck quite closely to the climate issue and didn't go into much detail on biodiversity.  In fact nature and wildlife weren't actually mentioned (but biodiversity got a couple of mentions), whereas carbon gets 21 mentions and climate 11 mentions.  But who's counting anyway?  Actually, it does become somewhat addictive so economy a surprising (1), cuts (20), happy (5), sad (1), Clegg (0) and Cable (1) are other word counts!

The Chair is Sir Alan Beith; Joan Whalley is chair of the Environmental Audit Committee, Tim Yeo is chair of the Energy and Climate Change Committee and Anne McIntosh is chair of the Environment, Food and Rural Affairs Committee.  This transcript comes from the uncorrected version posted on the link above and should be checked for any changes.

Chair: The major part of our time has been devoted to the spending review, so I want to turn to some other issues. The first is the Government’s claim and aspiration to be the greenest Government ever.

Q76 Joan Walley: Prime Minister, you said that you want this to be the greenest Government ever and have given a great fanfare to that. Listening to the exchanges so far, it struck me that, on transport policy, you said that money is to be allocated properly on the basis of greatest economic return. Where is sustainable development in all of this? What are you doing to embed sustainable development, so that when decisions are being made, it is not just economic decisions, but environmental, social and right the way in this cross-cutting way?
The coalition Government have abolished the Sustainable Development Commission, so there is real concern about what will take its place, how sustainable development will be embedded and how it can be monitored. Will there be targets? How will we know that they have been the greenest Government ever?

Mr Cameron: Okay. You are quite right to pull me up on my answer on transport. All transport projects are looked at in terms of not only their economic benefit, but their environmental impact.

Q77 Joan Walley: How? That is the question.

Mr Cameron: By taking into account their impact on the environment, carbon and all those issues. In terms of the Sustainable Development Commission, what we have tried to do, in a difficult spending round, is to put money into things that will make a difference-like the green deal, like carbon capture and storage, and like a green investment bank, which will have real money to spend-rather than have quite so much monitoring and evaluation.
In terms of how we will know how we’re getting on, because of the last Government’s Climate Change Bill, which we supported and in many ways proposed, we have the carbon budgets so that we can see how we are making progress. Look, obviously, we made difficult decisions in the spending round, but I think, overall, when you look at what we managed to do on the green front in terms of CCS, feed-in tariffs, renewable heat incentive and the rest of it, I think it got a pretty warm welcome from green groups and I think deservedly so, because we took some difficult decisions to safeguard some important projects.

Q78 Joan Walley: I want to ask briefly about the proposals for the green investment bank and those measures that you have just described, but just before we leave this subject about embedding sustainable development, surely, it has to be done in a cross-cutting way. Is this something that you are going to give your own personal commitment to? Is there going to be a Cabinet cross-cutting committee? Because it is not just about how green are your Government estate policies; it is how you embed it into every piece of regional policy, transport and defence. I haven’t heard that mentioned at all just now.

Mr Cameron: That’s a very good point. What we’ve done across Government is have, for each Department, quite clear structural reform plans. So instead of setting targets, we’ve actually just set out what each Department is going to do in terms of the legislation it will pass, the appointments it will make and the regulations it will introduce-explaining what it will do to reach the outcomes we all want. Obviously, that begs a huge question: what about things that cut across Government? With carbon and greenery, we need to have a cross-cutting structural reform plan, which we will put in place. I think that you are completely right about that and perhaps I can write to you with some details about how that will work. There are some issues that cut right across Departments, and this is obviously the most important one.

Q79 Joan Walley: Just one quick question then: you employed Sir Philip Green to review Government efficiency and to look at the whole issue of procurement. Did his specification from you include what to look at in terms of sustainable procurement?

Mr Cameron: His commission was really to look at cost saving. It wasn’t part of a green agenda; it was really: let’s just get someone from the outside to come and look at things such as procurement, IT and some of things that Government do centrally. I think he produced a report-it goes back to Margaret’s question, really-can we have some confidence that we can actually remove some of these back-office costs without cutting the front line? That is more what it was about.

Q80 Joan Walley: But isn’t the danger, before you have a look at your briefing there, that that will set the whole ship of Government in one direction and not look at embedding sustainable development and actual green procurement, which could do huge amounts to improve local economies and, at the same time, reduce emissions right the way across the board?

Mr Cameron: I don’t think it will embed that thinking because we are providing transparent information on environmental performance-and transparency is the best thing you can do on this front-and we are going to be publishing the carbon footprint of our supply chain. Those things are embedded, but the specific purpose of Sir Philip Green was to just look broadly across Government at cost-saving measures and what they could achieve. Certainly, because we have carbon budgets through the Bill, because we have this approach on transparent information and the carbon footprinting of our procurement, I think all those things will be-I’m going to sound like a jargon king-hardwired into our approach. There we are-I’ll try not to roll out any more pilot schemes in the next 10 minutes.

Q81 Joan Walley: Finally, on the green investment bank, which I think everybody agrees is going to be so important, is it really, truly going to be a bank, or is it going to be a fund? Is there likely to be a dispute between the Treasury and the BIS Department, and might you be taking as keen an interest in this at Cabinet level, as you did in the comprehensive spending review that we have just heard about?

Mr Cameron: Yes, yes, yes and yes to all of those questions.

Q82 Mr Yeo: Prime Minister, there is no more ardent supporter of your aim to lead the greenest Government ever than myself, though another policy I am equally enthusiastic about is that for fixed-term, five-year Parliaments. Now we know that the next general election is in 2015, can you tell us what criteria you will use to judge the success or failure of your Government as the greenest Government ever?

Mr Cameron: When we produce the structural reform plan that goes across Government for carbon and greenery, we will be giving you the weapons, as it were, to beat us if we don’t fulfil all the things that we said we would do. These structural reform plans are not a thrilling read, I have to accept, but they are very clear. In the one for Chris Huhne’s Department, it says: set up a green investment bank, deliver the carbon capture and storage pilot, establish the green deal with all sorts of benchmarks about when it needs to be done, introduce the renewable heat initiative by a certain date. I don’t just want to wait for five years to see whether we’ve been any good at this stuff. I want to give you the tools, so that when I come back here-whenever it is-you can say, "Your structural reform plan said you were going to have done X by now. Why haven’t you done it?"
It is not targets, because what tended to happen in the past is that we set targets for things, missed them and then said, "Well, shucks, that’s life." This is actually setting the actual act that you’ve got to take, and then you can see whether you’ve taken it or not. I think we’ve got a good list of things in this area, such as introducing feed-in tariffs. I have mentioned the renewable heat initiative and CCS. There is electricity market reform and the 10% cuts for Government Departments by the end of the first year. There is a pretty good set of things that I think you’ll be able to judge us against-all within the carbon budgets that were set out by the previous Government.

Q83 Mr Yeo: There will be some quantifiable measurements. You may not want to call them targets, but we will know how many million homes have availed themselves of the green deal and how many renewable, low-carbon energy projects, which have got planning consent and have been funded, are in the pipeline. So we’ll know what we’ll have by 2020. We’ll know how much money the green investment bank has lent or invested. Those will actually all be measurable.

Mr Cameron: Absolutely. The proof, as it were, is that Cabinet Ministers are already complaining that they’ve had to put things into their structural reform plans that they may not be able to meet, and it’ll make life very awkward in front a Committee like this or the House of Commons. That is part of the point in a way, which is to try to have a set of plans that are quite measurable and verifiable and that are not all in far-off target land. They are on actual concrete things that you do on the ground. So I hope that we’ll be able to chart the progress as we go along.

Q84 Mr Yeo: Do you accept the suggestion from the Climate Change Committee that electricity generation should be substantially decarbonised by 2030? Just to put that into context, it would mean an 80% reduction in emissions per unit generated by 2030.

Mr Cameron: Basically, yes, for the reason that people are only just waking up to, which is that if we are going to move to a world of electric cars and more ground-source heat pumps and, effectively, electricity-backed heating in our homes, we are going to see a potentially massive increase in electricity demand. If we don’t decarbonise electricity, we’ve got no hope of meeting all the targets that we’re all committed to. There are intensive discussions in Government right now about how we best reform the electricity market to make that happen-to what extent do we need all the different tools to make this happen and what sort of energy mix is likely to result in terms of nuclear, gas, wind and other renewables? So, yes, I do accept the basic proposition, and a huge amount of work is being done, and I think the DECC is doing it very well.

Q85 Mr Yeo: You have mentioned carbon capture and storage, and the first competition is funded-it was announced in the CSR at £1 billion. Have you decided how to fund the remaining three competitions to which the Government are committed?

Mr Cameron: No, we haven’t yet. We are committed to them, as you said. It was important to have that £1 billion-it is quite difficult to hold on to £1 billion in a tough spending round-for the first carbon capture and storage project. It will put Britain a long way ahead of other countries, but, obviously, we couldn’t do everything we wanted to.

Q86 Mr Yeo: Do you accept that, if we are going to achieve these goals of decarbonising electricity, which in turn will enable us to achieve the carbon budgets that the Climate Change Committee is setting out-another one is coming next month-the inevitable consequence of that, coupled with our concerns about security of energy supplies, is significantly higher electricity prices?

Mr Cameron: I think that electricity prices were going to rise anyway-if I can put it that way-because so much of our electricity infrastructure is out of date and because so much of our nuclear industry is about to come to the end of its life. There was an increase in electricity prices built in anyway.
The debate that we’re having at the moment is on what sort of model our electricity market should be going forward. Do we want to go on with this quite market-based model and to just have targets for carbon reduction and allow the market to deliver that carbon reduction? Or do we want to take the slightly more planned view that we want to try and effectively shield the public from excessive further rises in electricity prices by having some quite long-term guaranteed feed-in prices. There is a proper debate going on around the table, as with the other areas of Government, about what sort of model will deliver what I think we all want, which is decarbonised electricity, good security of supply and some certainty about pricing.
You are quite right, however, that prices are on an upward trajectory. They would have been anyway, but if we go for a slightly more planned approach we may be able to protect people from very big oscillations in prices. Frankly, no one knows what will happen to oil and gas prices, particularly with the discovery of so much shale gas. Is that a real game changer in energy prices? I don’t think we know that yet, and I don’t think we should take a risk on that basis.

Q87 Chair: When do you expect a conclusion of this debate? We are just entering winter, when people are going to be worrying about energy prices.

Mr Cameron: This debate doesn’t really affect the current year; it is more about looking ahead at how we will structure the electricity market. With all these subjects on which the coalition hasn’t yet completed its work-whether that’s immigration, control orders or this issue of energy policy-so far, I would argue, we have gone through difficult subjects such as higher education, the comprehensive spending review and defence and we have come up with good, well-thought-through answers. We will do the same on this, but it will take a little bit of time.

Q88 Miss McIntosh: Prime Minister, you have described DEFRA as the "fourth emergency service". It is responsible for two of the greatest risks that the country might face; first, as in Cornwall at the moment, the risk of flooding and, secondly, the risk of animal disease outbreak. Why did you impose the second largest budget cut on the green Department?

Mr Cameron: Describing these cuts as imposed is a slightly pejorative way of putting it. We had to find reductions across Government, and the Departments that were not protected had to find some quite big reductions. What we have done in DEFRA is to preserve the important areas of spending. On flooding, for instance, we will be spending £2.1 billion on flood and coastal defences over the next four years, which is broadly the same as the amount we spent over the past four years. We can actually add to the Pitt review, because it should be possible for local areas to top up grants that are given to them for flood defences.
In terms of animal health, we are spending £356 million a year on this, and it is only fair that we ask the agricultural industry to share some of this cost. Obviously, it should be able to share some of the decision making about how the money is spent.

Q89 Miss McIntosh: I’d be interested to know how you think the local areas are going to top up, when we are already topping up through levies to the flood defence committees. In your debate in May 2008 after the flooding in Witney, you were very concerned about the level of funding of the Environment Agency. The rural communities were not benefiting quite so much and there was a severe shortage of flood engineers. We know what is in the comprehensive spending review regarding flood defences, but we are not aware of how the cuts to local authorities will impact on flood defence spending when they take over the role for flood risk management schemes from 1 April.

Mr Cameron: That is an extremely good point. I would say that the Government have their responsibility to fund flood defences properly, which I think we are doing. I have found in my constituency that, yes, there is a concern that rural areas get left out, because you can never find the same number of houses at risk as you can in large urban areas, but I also find a frustration that, sometimes, just because you don’t make the mark for what the EA would fund, you tend to get nothing rather than everything. The idea that Sir Michael Pitt looked at, which we support and will be making some announcements about, is that it should be possible for local areas and communities to say, "Even if we can just get a little bit of funding for that project, we can add to it ourselves." At the moment, there is quite a lot of all or nothing in the way it works.

Q90 Miss McIntosh: We know that you like trees; are the Government still committed to their tree-planting programme? Can you give an assurance today that in the sell-off of any part of the Forestry Commission estate, elevated projects such as the one in North Yorkshire at the moment-where trees are being planted and peatlands are being created; it has biodiversity and flood defence issues-will not be jeopardised in any way?

Mr Cameron: I think I can give that assurance. We need to have a good tree-planting programme in this country, but in terms of the Forestry Commission I don’t think it is absolutely vital who owns a piece of forest. The question is whether there is good access to it, whether it is well kept, and whether it supports biodiversity. Those are the questions that matter.
Almost 70% of England’s forests are owned by private companies or individuals. There is an idea that a forest is only worth while and benefiting the nation and the public if it is publicly owned. We don’t apply that idea to other areas, and I am not sure that we need to apply it to forestry. We want it to be properly regulated, and we want the Forestry Commission to do its job, but I think that people shouldn’t be worried about the innovative financing that we are looking at.

Q91 Miss McIntosh: Finally, are you aware that one of the perverse consequences of the Fixed-Term Parliaments Bill and the fact that there won’t be a Queen’s Speech until November 2012 is that there will be a delay to the Water Bill, which is meant to be a flagship policy?

Mr Cameron: I am not aware of that. I don’t necessarily see why it should cause a delay, because the reason for this long Session is to get in sync with Queen’s Speeches in the spring/summer, when the election would be, which is a logical move. That doesn’t stop us introducing legislation before the next Queen’s Speech. That might just be an excuse that you’re being given. I will go away and see if I can find out. Perhaps they haven’t finished drafting it, or something, rather than that.

Chair: A very quick word from Mr Clifton-Brown.

Q92 Geoffrey Clifton-Brown: Sorry, Prime Minister, but I want to go back. In terms of decarbonising the electricity sector, do you accept that in the future we will need a substantial nuclear power-generating capacity? If you do, do you accept that urgent decisions are needed, so that we get new nuclear power stations built in time for when the existing ones are decommissioned?

Mr Cameron: I do think that nuclear is likely to play a good part in the new mix of electricity. I think that it should be done on the basis of no specific nuclear subsidy. I hold to that, and I think that it’s right. We shouldn’t be giving guarantees to businesses on clean-up costs for which they are not prepared to take responsibility. I am encouraged, and I have had meetings with EDF, which is going ahead with building nuclear power stations in this country. I think that EDF is confident that the decisions that need to be made are being made to give it the certainty to make the investment. It seems to me that we’re cracking on with the decisions that are necessary to give that certainty.