Clause 16
Climate Change Bill [Lords]
5:30 pm
Gregory Barker (Shadow Minister, Environment, Food & Rural Affairs; Bexhill and Battle, Conservative)
I beg to move amendment No. 52, in clause 16, page 8, line 44, leave out ‘1%’ and insert ‘0.5%’.
This is a probing amendment. We propose to reduce the amount of carbon units that can be carried back from one budgetary period to the preceding budgetary period—the latter period would be reduced so the previous period could be increased. We propose to reduce the amount that we are allowed to borrow from the future from 1 per cent. to 0.5 per cent. Although we appreciate that external factors, such as the weather, might make this so-called banking and borrowing useful to a degree, we want to ensure that the budgets are robust and not pliable, especially under political pressure.
We are also concerned that too generous a carry-back period might allow any Government of the day to hide their failure to meet the budgets and allow them to pass the buck on to the next Administration. The issue of banking and borrowing is worth probing further, particularly in the light of our earlier discussion about indicative annual ranges. There is a clear link between the width of any indicative annual range and the corresponding width in the banking and borrowing between budgetary periods.
I have already argued that the indicative annual range must not be too broad. I understand that the 1 per cent. banking and borrowing provision under clause 16 only affects the five-year budgetary period. However, we still need further clarity on their relationship. For example, how would banked reductions at the end of a five-year budget affect the next year’s annual range? Would the Government be allowed to count their banked reductions towards meeting the first year’s annual range, or would they have to spread them out over the entire period? Conversely, if a budget period began with 1 per cent. already borrowed from it, would all the annual ranges for that period be adjusted to reflect that?
Spreading out the effect of banked or borrowed reductions across the entirety of the next budget seems to make sense. It might not be possible to recoup the entire borrowed 1 per cent. within the first year of the next budget. Similarly, it would not be appropriate to use banked reductions to make it seem like the annual range for the first year had been achieved when in fact the Government were relying on the success of the previous five-year period—much like the way in which the current Government rely on the success of the previous Administration to achieve their Kyoto target. My right hon. Friend the Member for Suffolk, Coastal played a heroic part in that success.
If the carry-back provision was narrower, that sort of thing would not cause the same problems in the calculations of indicative annual ranges.