New Clause 1 - Carbon emissions in local authority areas

Energy Bill [Lords] – in a Public Bill Committee on 21st June 2011.

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‘(1) The Committee on Climate Change shall advise the Secretary of State about the contribution to emissions reduction needed in local authority areas to meet each national carbon budget.

(2) The advice given under subsection (1) should include but not be limited to—

(a) carbon emissions from a local authority’s own buildings and operations;

(b) carbon emissions from the local area;

(c) local renewable energy generation;

(d) national carbon reduction initiatives delivered at the local level.

(3) The Committee on Climate Change may advise the Secretary of State on local level adaptation to climate change.

(4) The Secretary of State must lay before Parliament a response to the advice given by the Committee on Climate Change under subsection (1) or (2), within six months of receiving the advice.

(5) For the purposes of this section—

(a) “budgetary period”, “carbon budget” and “national authorities” have the same meaning as in Part 1 of the Climate Change Act 2008;

(b) “local authority” means a county council or district Council in England, or a London Borough Council, or the Council of the Isles of Scilly.’.—(Luciana Berger.)

Brought up, read the First time, and Question proposed (this day), That the clause be read a Second time.

Question again proposed.

Photo of David Crausby David Crausby Labour, Bolton North East

I remind the Committee that with this we are discussing the following:

New clause 2—Climate change strategy for local authority areas—

‘(1) Local authorities must develop and promote a climate change strategy for their local area.

(2) In preparing the strategy, local authorities must take into account any advice given by the Committee on Climate Change on local action to meet carbon budgets.

(3) In preparing the strategy, local authorities must consult with local residents, businesses, social enterprises and co-operatives and other institutions.

(4) Local authorities must publish and promote their local climate change strategy, publish an annual report on progress towards carrying out the strategy and engage with local citizens and community groups.

(5) The Secretary of State must work with local authorities and the Local Government Association (LGA) to assist them in producing and implementing their climate change strategies, taking into account any relevant advice from the Committee on Climate Change.’.

New clause 28—Sustainable energy plans—

‘(1) A local authority must consider whether the drawing up and publishing of a sustainable energy plan would have either of the following effects, namely to—

(a) increase its efficiency regarding; or

(b) in any other way assist with the discharge of its functions.

(2) If in the opinion of a local authority the drawing up and publishing of a sustainable energy plan would—

(a) have either of the effects specified in subsection (1); and

(b) assist with the purposes of this Act then it must draw up, publish and implement a sustainable energy plan.

(3) Without prejudice to the generality a plan must specify the steps that the local authority proposes to take to promote—

(a) energy efficiency;

(b) microgeneration;

(c) renewable energy;

(d) combined heat and power; and

(e) cost effective action with or by residents, local organisations or businesses that would assist with the reduction of greenhouse gases, the achievement of energy security or the mitigation of fuel poverty.

(4) A plan prepared by a local authority may—

(a) request such new functions as in the opinion of the council would enable it to make a greater contribution to achieving the objectives specified in subsection (2); and

(b) make a recommendation to the Secretary of State for a transfer of functions from another body to itself provided that no such recommendation may be made unless the council has consulted the person to whose functions it relates.

(5) Within 6 months of receiving any request pursuant to subsection (4)(a) or recommendation pursuant to subsection (4)(b) the Secretary of State must—

(a) either adopt and implement, or take the necessary steps to commence the process of implementation,

(b) or reject the request or recommendation and in either case shall give reasons for his decision.

(6) Where any functions are conferred or transferred pursuant to this section, the Secretary of State shall ensure that the monies necessary for the discharge of those functions are provided or transferred.

(7) Any principal council on which functions are conferred or to which functions are transferred under this section must determine how the functions are then performed.

(8) Where the Secretary of State is spending money in an area covered by a plan in order to achieve any of the objectives specified in section (1), and in this opinion—

(a) any measure contained in a plan is a more efficient way of achieving his objectives; and

(b) offers better value, then he shall provide resources for the principal council to implement those measures in its plan.

(9) Where any person submits to his local authority a proposal that would in the opinion of the authority be a cost effective method of assisting with—

(a) the reduction of greenhouse gases, or

(b) the achievement of energy security, or

(c) the mitigation of fuel poverty, the authority must include that proposal in any plan prepared pursuant to this section or, if it has not prepared such a plan, implement the proposal.’.

New clause 29—Communal schemes—

‘(1) Local housing authorities shall be empowered to arrange, with green deal providers, energy saving schemes that cover the whole or a part of housing estates, roads, districts or other local communities. They will negotiate on behalf of improvers so as to obtain savings that arise from economies of scale, which will be passed on to individual improvers.’.

New clause 46—Local carbon budgets—

‘(1) The Secretary of State shall—

(a) within 12 months of this Bill receiving Royal Assent, report to Parliament with proposals for the introduction of a system of local carbon budgets consistent with meeting national Climate Change Act 2008 carbon budgets;

(b) introduce the local carbon budget system to begin at the start of the second national carbon budget period;

(c) report to Parliament annually about the contribution of local strategies to meeting UK Climate Change Act carbon budgets;

(d) determine circumstances in which two or more councils may develop a joint strategy for cutting greenhouse gas emissions in their areas.

(2) The Secretary of State shall request advice from the Committee on Climate Change about—

(a) the scale of action need in local authority areas to help meet UK Climate Change Act carbon budgets;

(b) climate mitigation and adaptation policies that are effective when locally coordinated by councils;

(c) ensuring that individual local carbon budgets are both appropriate for the circumstances of different local areas and that the totality of all local carbon budgets is consistent with the requirements of subsection (1)(a).

(3) The proposals to be reported under subsection (1) shall include a duty on local authorities to—

(a) develop a strategy, through consultation with those groups and individuals listed in subsection (3)(b), for cutting greenhouse gas emissions across their local area in line with meeting their local carbon budget;

(b) work in partnership with local residents, businesses and stakeholders, including social enterprises and co-operatives, community groups, schools and hospitals, and other institutions in drawing up and implementing the strategy detailed in (3)(a);

(c) wherever possible, develop proposals consistent with a reduction in greenhouse gas emissions in their local authority area of 90 per cent. by 2030, compared to 1990 emissions levels;

(d) publish and promote an annual report on progress towards meeting their local carbon budget; and

(e) request additional powers or financial support from the Secretary of State as they consider necessary to meet the duty set in section (2), which shall not be unreasonably withheld.

(4) Any regulations or order made under section (1) shall not be made unless a draft has been laid before, and approved by, resolution of each House of Parliament.’.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

It is a pleasure to serve under your chairmanship in the last sitting of the Committee, Mr Crausby.

At the end of this morning’s sitting, I was saying to the hon. Member for Richmond Park that many councils already undertake environmental activities. I referred earlier to the Prime Minister’s constituency, and during lunch time I found a quote from the cabinet member for environment in West Oxfordshire district council, who said:

“I’m happy to see the Government introduce targets on the environment… It is helpful if they are mandatory—it means no wriggle room and everyone in the council pulling together.”

Ultimately, the issue is so important—some issues in society, such as child protection, are very important—that every council must do its bit if we are to achieve our national climate commitments. Councils that are not already doing it cannot use the excuse that it is too difficult or that there is too much responsibility and onus, which is why new clauses 1 and 2 are so important.

Photo of Zac Goldsmith Zac Goldsmith Conservative, Richmond Park

I totally agree with almost everything the hon. Lady said. Local authorities have to get involved, but councils that are already engaged, of which examples have been given, are up for the plan because they are already engaged. If a council is not engaged, being required to come up with a review, a strategy or a plan will allow them, as ever, to do straightforward, routine box-ticking. That is not what will drive councils to join the examples of best practice; I have seen no evidence of that.

I am not opposed to the new clauses, as it happens; I just do not believe that they will be the difference between success and failure. What will make a difference is a strong national framework. We see the beginning of that in the Bill and the green investment bank will, one hopes, provide a lot of fuel.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

What the Conservative cabinet member was just quoted as saying was effectively a testament to “Vote blue, go green”—

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

Indeed. On that basis, what is the difference between the application of the new clause to the local context and the fourth carbon budget that sets a national direction? It is the same principle, but taken down to local determination.

Photo of Zac Goldsmith Zac Goldsmith Conservative, Richmond Park

The difference is that it is very hard to know what belongs in the local area and what does not. I question the figure of 80% that we heard earlier; I think it is more like 100%. Every emission released in this country happens within one local authority or another. If a local authority has a large coal plant or a large road going through its area, does that count in the local budget? Perhaps the Opposition can answer that.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

If it is 100%, is that not even more of reason why local councils and local authorities should be under an obligation to meet our national target for reductions?

Photo of Zac Goldsmith Zac Goldsmith Conservative, Richmond Park

The hon. Lady has misunderstood, but perhaps I was not clear enough. One hundred per cent. of emissions happens in local authorities. In many cases, those emissions will not be reduced by local action, but by having a strong national framework. With the landfill tax, a heavy-duty national stick has been applied throughout the country, which has resulted in local authorities finding ways to minimise their waste. It is not applied by the Government in a bespoke manner for each and every local authority; it is interpreted by local authorities.

The large signals sent by the Government are what will make a difference: the sticks and carrots across the board, the green deal, the green investment bank, electricity market reform—we hope to see it in the next few months and it may be a game-changer if the Government are as ambitious as we are led to believe they will be—feed-in tariffs, renewable heat incentives and, I hope, more action from the Department for Transport, which is not yet doing as much as it should. Those things will lead to a rapid reduction not only in our dependence on overseas fuel, but in our emissions.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

The hon. Gentleman says that he hopes that other Departments will do something in the future and he anticipates that they will, but do we not have the opportunity to do something today that will have a massive impact throughout the country?

Photo of Zac Goldsmith Zac Goldsmith Conservative, Richmond Park

Absolutely, and that is exactly what we are doing under this magnificent Bill, which I believe is a great step in the right direction. That is not to say that it cannot be improved. I take this opportunity to say that our proceedings are probably the only example since the election of a scrutiny Committee actually engaging in real scrutiny, and that is a testament to the Department. It has gone out of its way to find the most awkward people imaginable to apply themselves to the job of scrutiny, and that is a great thing. It is a template and adds weight to the argument that the hon. Member for Brighton, Pavilion has made many times for elected members of Bill Committees. I accept that I am well off-track, Mr Crausby, but if we did have elected members of Committees, we would have much more engaged discussions than is usually the case in such proceedings.

I am a fan of the Bill. It is a step in the right direction. Many of the other examples of action that I have provided are already in the pipeline. The renewable heat incentive and feed-in tariffs are not futuristic aspirations; they are happening. The green investment bank is not as ambitious as many people hoped, but it is many times more ambitious than most people expected. Electricity market reform in the next few months could be—I think will be—an absolute game changer. Such measures will put a price on pollution. There will be big incentives for energy reduction and energy efficiency, and that will necessarily lead to the action at local authority level for which Opposition Members are calling.

I do not believe that the strategies, the reports, the processes and the bureaucracy entailed in the new clauses would make the slightest difference. I do not object to their existence. If the Minister accepts them, that is fine, but they are not proposals that personally excite me. Yes, I signed the pledge before the election because I believe in the direction in which we are going and in the aspirations behind the new clauses, but it is hard to see  them making the slightest difference. We seem to be talking about the process, not the outcome and the substance.

Photo of Ian Lavery Ian Lavery Labour, Wansbeck

The hon. Gentleman mentioned the EMR, which will be happening in the next few months. What main part of that will have an impact on local authorities?

Photo of Zac Goldsmith Zac Goldsmith Conservative, Richmond Park

I can give the hon. Gentleman one example. Clearly, EMR has not happened yet, but I hope that energy reduction will be put on a par with energy generation, so that when local authorities engage in or organise energy contracts, there will be a direct incentive for them to pursue contracts that have energy efficiency at their heart. If that happens, the dynamic will change completely. Instead of companies having a direct incentive to sell as much energy as they can, they will have an incentive to sell as little energy as they can, albeit enough to power homes, hospitals and God knows what else to keep the lights on. They dynamic will change so profoundly that that in itself will probably be the biggest single thing that the Government can do to start weaning us off dependence. The reform must be ambitious, and I believe that it will be ambitious.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

It is interesting that the hon. Gentleman is so sceptical about what can be achieved at local level, yet so hopefully ambitious about what will happen at national level. There seems to be a lack of logic. Why has he so much ambition for national level, but not for what will happen at local level? The new clauses are about empowering local authorities to take the action that will be needed at local level if those national aspirations are to come true. They are not about red tape, which can be used to characterise measures in a lazy way.

Photo of Zac Goldsmith Zac Goldsmith Conservative, Richmond Park

Perhaps I have misunderstood, but I do not think that the measures are about empowering local authorities; I think they are about providing direction for local authorities, which I shall come to in a second. I am certainly not sceptical about what can happen locally, but I am sceptical about targets because it is unclear what is the responsibility of local authorities and what is the responsibility of the Government. Where can the local authorities make a difference, and where can they not? Because that is necessarily ambiguous, it is hard to imagine what sanctions should be put in place.

My original question about sanctions at our previous sitting was not mischievous. There is not much point in having specified and prescriptive targets and goals unless we also have sanctions; otherwise, they will be ignored. It is hard to imagine how we can work out what sanctions to apply to local authorities for exceeding the budget that is set for them, given that we do not even know which parts they will have the power to deal with, and which parts they will not. I can imagine the policy becoming an absolute bureaucratic nightmare. It will not have the desired outcome. Local authorities that do not want to engage will not engage. Most local authorities want to engage, but they have no idea how to do so.

We have heard examples of local authorities blazing a trail. I spoke to a council leader, Louise Goldsmith, this morning—she is not a relation of mine, although there  probably is a link about 500 years back. She gave wonderful, inspiring examples of what is happening in her local authority. We need to learn from those examples. We will hear from the Minister later, but what I hope we will be able to do is facilitate a process whereby best practice is centralised, so that we develop a bank of best practice that local authorities can draw on, because I do not think that the expertise exists in many local authorities to pursue the types of measures that we are talking about.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

I think the hon. Gentleman’s heart and soul are with us, but his political head is telling him, “Whatever you do, don’t go with them over there.” I suggest to him that the expertise does reside in local authorities. Because they have, not direct levers of power, but influence over waste policy, transport, industrial development and so on, they can make decisions such as the one my local authority made to have Tata Steel, one of the most intensive energy users, on its doorstep, but to adopt compensatory measures to minimise its carbon footprint, which it has done so very intelligently. All the new clause would do is to allow that sort of local determination in balancing the books on green matters.

Photo of Zac Goldsmith Zac Goldsmith Conservative, Richmond Park

I do not want to be misunderstood. I recognise that there is a lot that local authorities can do. What I do not believe is possible is to identify exactly how much a local authority must do about things over which it has control and then apply targets and consequently sanctions. I do not believe that that is possible. I think that that is messy, bureaucratic and complicated, and it will take us down the wrong path. I just do not think that approach works.

My local authority is Richmond upon Thames and part of its area is in my constituency. The authority has been very keen in the last few years to reduce emissions, and it introduced a scheme to try to reduce emissions from cars. It turned out to be one of the least attractive, clumsiest and most unpopular environmental initiatives that I have ever seen, and it absolutely exhausted local people’s appetite for green initiatives. It was very well intentioned and it was absolutely the right aspiration, but it was completely the wrong idea and the effect was that we took a big step backwards. Why? Because car emissions cannot be addressed locally. It is an issue that we need our Government to address and indeed it must also be addressed at the level of the EU.

I very much hope that the coalition Government will finally take on the car industry and push for lower emissions standards. It is not something that we have seen yet, but I very much hope that it will happen. That is what needs to happen. It will not be down to local authorities to deal with it.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

The hon. Gentleman seems to be arguing against local determination. We accept that in local determination—in fact, in localism as a concept—errors will be made, including political errors and judgments on policy. However, setting local authorities a target and then saying to them, “You go ahead and determine how you will do that,” is what local democracy is about. It seems that he is now arguing against local determination of how local authorities can achieve reductions in their carbon footprint.

Photo of Zac Goldsmith Zac Goldsmith Conservative, Richmond Park

I think that it is about the national approach. Let us go back to the landfill tax, which for the first time made waste into a liability—a heavy liability. Local authorities could have chosen to ignore that and pay out vast amounts of what they raised through council tax, in order to ignore the potential savings available to them by engaging in clever waste policy.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test

I think the hon. Gentleman is confusing targets and budgets.

Photo of Zac Goldsmith Zac Goldsmith Conservative, Richmond Park

I am talking about the whole collection of new clauses.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test

I understand that and I was hoping to catch your eye, Mr Crausby, in a moment to expand on that, but landfill tax is essentially a budget for landfill; it is not a target. Essentially, that is why it has worked, because it says, “This is what you can landfill and these are the decisions that you can make relative to it, and you must work within a budget for your landfill.” I am with him on that, but I think that what he is saying actually supports our argument, rather than opposes it.

Photo of Zac Goldsmith Zac Goldsmith Conservative, Richmond Park

I am not sure that I completely agree with that interpretation. The difference is that the landfill tax exists, and local authorities can either minimise their exposure to it or they can ignore it, but if they ignore it, there are financial penalties. I do not think that it is a budget in the normal sense. My original point is not about whether it is a budget, or a target or anything else, but that it is a national disincentive that was created to turn waste into a liability. That is the sort of measure that we need across the board. We need incentives and disincentives to push us in the direction that we need to go in.

My concern is not that local authorities should not be required to do everything they possibly can to minimise their emissions. My concern is that the tools set out in the new clauses will not deliver that outcome, because they are just too difficult to work out. I can imagine that as a result of the new clauses being accepted, we would have to develop an ancillary carbon Government, just to monitor the progress in the local authorities. There are easier ways.

I am being more strident than I had intended to be. I do not believe that the proposals are the solution. I am interested to hear what the Minister has to say. I hope that in addition to the bank of best practice ideas, which I know would be useful for my local authorities and, I am sure, for many others, the Minister will pursue the negotiations and discussions with the Committee on Climate Change, and take advice on the implications of its providing each local authority with an indication of what its contribution to the reductions should be. That would be a fascinating exercise, assuming that it was not too bureaucratic and expensive. I hope that we shall be able to return to the matter on Report.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change) 4:15 pm, 21st June 2011

Knowing that there is another stage to be gone through in consideration of the Bill, would the hon. Gentleman be more comfortable with a  wider enabling power, at the discretion of the Secretary of State, which, subject to the recommendations of the Committee on Climate Change, could be put into place? If the difficulty is with the parameters of the new clause, perhaps he would welcome an alternative amendment, which would give the Secretary of State at least that enabling power?

Photo of Zac Goldsmith Zac Goldsmith Conservative, Richmond Park

I know that we will have an opportunity on Report for a version of the new clauses to be brought in. The Minister is nodding his head. That is news to me. My understanding was that on some of the issues where there is not complete disagreement with the principles, notwithstanding disagreement over the wording, there is an opportunity on Report for the Minister to table amendments. I know that the Minister is having discussions with the Committee on Climate Change, particularly on new clause 1, about carbon budgets. I hope that that discussion will follow. We shall see what happens on Report.

I have misunderstood the Minister and I hope that he will explain the possible ramifications of his discussions with the Committee on Climate Change. Where could they lead, and how do they relate to Report? I think that I have misunderstood the process. I shall stop there, and waited excitedly for the Minister’s comments.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test

I do not quite understand certain elements of the debate. In Climate Change Act 2008 we set a number of targets. We subsequently went substantially beyond those in the architecture of the Act to make things happen. In One can generally characterise targets as similar to saying, “I want to lose a stone in weight.” That is my target. Then the question is “How do I go about it?” What I may do then is give myself a diet, or a budget, to achieve that target. That is what was done with the Climate Change Act. We have our five-year carbon budgets, which are not targets. They constrain the overall envelope of what can be done; within that, it is possible to move around considerably, but it provides the shaping for the way forward. We produced a national allocation plan—difficult to undertake, but we did it nevertheless—for large parts of UK industry and electricity producers on what their emissions could be and how they would need to trade them to stay within the budget allocations they had been given.

That is how we have done it under the Climate Change Act, so it seems a little odd that under the Bill, because we cannot easily determine what is within the budget of the local authority, the instrument has apparently no worth. I take the opposite view. Provided one states in a budget its parameters, the value of the budget then relates to its examination on the same terms over a period—it tells those involved where they are going, and does it properly at each level of governance. Indeed, it enjoins them to stick within it, but it does not constrain their policy options, because it does not mean they must do this, that or the other. It is not an imposition on local government to do particular things. It is a shaping arrangement that ensures that we have in common the ability to get carbon emissions down, while retaining an enormous amount of initiative in different aspects of our lives and in how we go about our business. It does not interfere with or bureaucratise policy making, as has sometimes been suggested.

Local authority carbon budgets could be an important element of what we do and what we have to do under climate change legislation. We have an opportunity today to make serious progress on what I think is a neglected element, perhaps, as my hon. Friend the Member for Ogmore suggested, by the Minister taking away the exact architecture of how this works.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

I want to clarify what new clauses 1 and 2 would do. The council could make the case for not accepting the advice and could draw up a strategy based on a larger or a smaller scale of action. The difference is that the actions would be transparent and that local people could hold the council to account. Most importantly, no council would be able entirely to opt out of tackling climate change, as they can at present. To respond to the hon. Member for Richmond Park, there is an opportunity here for councils to put forward a smaller strategy for action—not that we would necessarily support that.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test

I thank my hon. Friend for underlining the new clause’s impact on local authorities. In many ways, it goes in the same direction as budgets from the Committee on Climate Change. The Government recently accepted the fourth carbon budget, but not every element of the Committee’s recommendations. However, the climate change budget is in place—a good thing too—and that provides the shaping and the corset within which we then work through different policies, perhaps, depending on one’s point of view, towards that overall target.

The compatibility of what is in the new clauses with what we are already doing and know we have to do is of a high order. The new clauses make eminent common sense about where we should go. Over the next few years, if we are to deal with the imperative before us and get anywhere near our carbon abatement aims, we cannot avoid a degree of regulation and shaping, alongside best practice and examples of people far exceeding what the budget suggests. I hope that the provision will be the bedrock of a process of people exceeding the targets. It is not a particularly big ask, and it could be of great benefit to what we know we have to do to achieve our climate change targets in the years ahead.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

It is a pleasure to see you in the Chair again, Mr Crausby, in what I am afraid is the Committee’s final sitting. This has been an important debate, and in the course of our discussions we have identified some slight differences of approach.

I am not against carbon budgets; in due course they might have a place. I supported the budgets before the general election and I continue to support the principle behind them, but we have to be clear about the volume of asks that we are making of local authorities at this particular point in time. We have looked at this matter through the wrong end of the telescope during this debate. We have been talking about the many local authorities that are doing phenomenal things. Only today, I heard that Birmingham intends to be a green deal provider in its own right. I am grateful to the hon. Member for Brighton, Pavilion who raised the excellent example of Kirklees council, which did some really pioneering things in conjunction with one of the energy companies. That is a model from which we have learned a lot at the Department of Energy and Climate Change.  Extraordinary things are happening and we have heard about these exemplars. My concern for carbon budgets is not about the fact that they will be the icing on the cake for large metropolitan authorities, other go-ahead councils such as West Sussex or the impressive list that the hon. Member for Liverpool, Wavertree reeled off, and with which I totally concur—

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

Exactly—or Stourbridge. There are a significant number of local authorities—we should not underestimate their number—that will struggle to fulfil their obligations under the green deal. The last thing that I want is to put another piece of legislation on to the statute book—one that becomes Home Energy Conservation Act 2. There is a real danger that we will overload local authorities with carbon complexity. The arguments advanced by my hon. Friend the Member for Richmond Park were right. More work needs to be done to come up with a robust consensus around what falls within a carbon budget and how it is determined.

Members were right to question what penalties would be incurred by local authorities if they failed to meet those carbon budgets. I want local authorities to focus not on carbon complexity or things that are outside their control—motorways running through a constituency, large industrial sites or worries about the impact that this will have on planning permissions—but on the dynamic role that they can play in rolling out the green deal and taking practical action. Perhaps this is the mirror image of previous Government practice, which was to set targets and obligations, then walk away from the responsibility of delivering them. I want to give local authorities maximum opportunity and capacity to deliver energy efficiency and to transform the housing stock and small businesses. That is the transformational genie within this Bill. If we introduce another layer of complexity, there could be problems. Although some local authorities may be able to adjust their existing plans, it could overload the very local authorities that the Bill is intended to help the most.

Photo of Simon Wright Simon Wright Liberal Democrat, Norwich South

The Minister said that he is not opposed to the principle of local carbon budgets. Will he assure supporters of local carbon budgets, including me, that if this amendment is withdrawn or voted down, it will not be the end of the matter as far as local carbon budgets are concerned? If we cannot deal with this matter in the Bill, will he leave the door ajar so that we can revisit the matter?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

Absolutely. I was one of the few members of this Committee— I think that the hon. Member for Southampton, Test was also there—who served on the Climate Change Bill. I am in favour of budgets in principle, and in due course we will reach a point where carbon budgets can be rolled out for local authorities, but we need to do more.

There are practical matters to consider. It would impose a burden on local authorities, and burdens have to be costed. The Department does not have a budget to pay for it; we would have to cancel another project to  roll it out, but we are intent on pushing the agenda forward. However, although we do not support the new clause, we do support low-carbon frameworks.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party 4:30 pm, 21st June 2011

I think that the Minister is misrepresenting our argument. He makes it sound as if somehow the sort of proposals that we want to bring in would be a distraction from the green deal, whereas they will help it to meet certain targets and aspirations. As it is, councils will say, “This green deal is all very well, but how much of it do we have to do and when do we have do it?” It does not help them very much.

In 2007, the Local Government Association said:

“Our unanimous view at present is that a statutory duty should be imposed on those councils that, within the next two years, do not respond to climate change.”

That was back in 2007. Local councils want the help that such proposals would give them. It would not be a distraction or a burden, but a help.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

The hon. Lady is right, and they are getting that in spades with a revitalised Home Energy Conservation Act. HECA is exactly that, a focused and clearly designated piece of legislation that imposes a legal obligation on local authorities to drive energy efficiency throughout their areas. In the short term, HECA is the means of delivering that. To add a further layer of carbon complexity, asking councils to consider industrial gases, transport and other things, could be quite baffling to under-resourced and overstretched local authority officers. It would be a distraction from the real opportunities of the green deal.

Photo of Zac Goldsmith Zac Goldsmith Conservative, Richmond Park

If the green deal can be made a runaway success only as a result of reviews, strategies and targets being imposed, with local authorities effectively required to engage in it, that reflects badly on it. The green deal ought to be attractive enough to individuals, streets, businesses and local authorities to become a runaway success without compulsion being necessary. Will the Minister reassure the Committee that it is attractive enough, and that the Treasury will continue to be lobbied to provide incentives along the lines mentioned, to ensure that it succeeds without people having to be put into an arm lock to accept it?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I assure my hon. Friend that the huge degree of stakeholder engagement, from the largest FTSE companies to organisations that represent the small entrepreneur, residents associations and community groups, shows that there is a real appetite to get going on the green deal. We should not have any undue concerns about that. We clearly need the right framework in place, however, and we need incentives.

This is an ongoing programme. At the beginning of the Committee stage, I often said that we should realise that the Bill is not the last word on the green deal. We are setting in train a two-decade programme that will run all the way to 2030. The number of homes involved is so large that it is mind-boggling. Ultimately, it will touch 26 million homes. I do not suggest that we have anticipated the way in which the market will react in the latter stages of this decade and into the 2020s, but I am sure that we will need to return to secondary or other legislation and financial incentives to drive the market further.

Photo of Steve Brine Steve Brine Conservative, Winchester

Equally, the Bill, the green deal and the market that will be created will not be the last word in the Government’s ambitions for their carbon reduction programmes, nor for their overall carbon budgets. Including a new clause on the action that local authorities must take may be putting such provisions in the wrong place, but it is not the only part of the Government’s carbon-reduction strategy, is it?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

No, the Government’s carbon reduction strategy spans not only this Department, but the Treasury, the Department for Transport, the Department for Communities and Local Government, the Department for Environment, Food and Rural Affairs, and the Department for Business, Innovation and Skills. Carbon reduction is a pan-Government, holistic programme, and this is one part of it.

I will return to carbon budgets and why we are taking steps in the right direction. To move this agenda forward and to move closer to the point where we can adopt a comprehensive approach to carbon budgets, we have provided £2.5 million for local carbon framework pilots in nine areas, involving some 30 local authorities. We will publish the lessons learned from those pilots later this year, for the benefit of all local authorities. In addition, we have agreed a groundbreaking memorandum of understanding between my Department and the Local Government Group, again providing a framework for local authorities to set their own levels of ambition on climate change through a new Nottingham declaration partnership.

I would hate members of the Committee to have the impression that we have set our face against carbon budgets. There is more work to be done, however, and we do not believe that an unfunded obligation imposed on local authorities, particularly on those who are least engaged in this agenda, is the right priority, as we want them to engage in the green deal through HECA. Once they have got to grips with the green deal and rolling out energy efficiency, and once we have collated more information from our local carbon frameworks, we will continue to push this agenda forward. The new clause is asking for too much, too soon.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

A pilot took place last year, and we have evidence from nine councils. All in all, 40 councils are signed up and want this to go forward. The Minister mentioned the memorandum of understanding, but it provides no clarity on the scale of action. It is not comparable with what we are discussing today. The Minister has said that it is not the last word and that there is a 20-year plan but, ultimately, the time is now. These targets are too important. The reason and motivation for these new clauses is that we have put this into action. It is already happening in 40 councils across the country who are saying, “We can do this.” I do not accept what the Minister is saying, because we have already heard councils saying that they are doing it pretty effectively and that it has worked. We used the example of Manchester, where 100 organisations, businesses and local authorities are all working hand in hand.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

There was a small pilot programme. We are building on that and we recognise the good work that was set in train by the previous Government. The new programme, to which we have committed £2.5 million,  involves 30 local authorities. We are using the previous programme to inform further our thinking on this. Overall, however, we do not yet have a framework, let alone a funded framework.

The last thing I want, because it is so easy to come here full of enthusiasm and passion for this subject, is to put more and more on to the statute book. It is that same passion and those same good intentions that led to the creation of the Home Energy Conservation Act back in 1995, but because there were not the resources available to roll it out fully, because it was slightly ahead of its time and because it was out of kilter with other policy sets, it languished on the statute book. It was up to the coalition to rescue it.

The last thing that I want is to push the local carbon budget to a point where it is a universal obligation, but where only the faster moving councils pick it up and run with it and it becomes slightly discretionary; the currency of the local carbon budget would be slightly devalued. We are gradually moving towards that point, but it must be on the basis of a strong consensus. There must be funding, and people must feel that it is right. The measure must not be only for the early movers, the fast adopters and the big metropolitan authorities; we are talking about a statute that will impose an obligation on every single local authority, including a small rural district council with perhaps only a part-time officer working on it.

Photo of Nadhim Zahawi Nadhim Zahawi Conservative, Stratford-on-Avon

I think the Minister’s point is that HECA is the mechanism that will, effectively, ensure that local authorities are focused on delivering the green deal. We all have ambitions to go further than that, but the Minister is right in saying that some councils, such as Stratford-on-Avon district council, are already resource-thin and finding life pretty difficult in the current economic climate. Such councils would struggle if we were to make it mandatory to go further on carbon reduction without first having been responsible enough to have costed that in. The Minister rightly makes the point that it would be highly irresponsible to accept the new clause, which would, in fact, damage what we all want to see: the success of the green deal.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

My hon. Friend is spot on. At this point, the absolute priority of local authorities should be the green deal. They should be focused on rolling out practical actions, not diverting officer time to drawing up hypothetical carbon plans and grappling with very complex issues. They should not be diverting very scarce, often non-existent, resources into drawing up ambitious plans. I want real progress on the ground now.

When we are into the scheme, that will be the time to use experience in this agenda to translate into a wider, more ambitious programme. That approach is sensible and pragmatic. I understand the Opposition’s frustration, but our approach is more likely to yield dividends in the longer term than taking our fences too soon.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

I am quite encouraged, because I think the Minister is on the Opposition’s side. He keeps saying, “We’re nearly there; it is almost time for this.” New pilots are running on top of the pilots that ran before, and he has referred the matter to the Committee  on Climate Change. Why does the Minister not take the power or bring something back on Report and fashion his own way? The enthusiasm that he has referred to is, indeed, on these Benches; it was also on those Benches before the election—so just do it.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I am grateful for the hon. Gentleman’s beguiling encouragement. The fact is that we are not weeks or months away from the programme. I want local authorities to focus, over the next 12 months, on preparation for the green deal, and focus on rolling it out in the following 12 months. We are a little way from the aim—we are not so far away from it, but we need to take much more evidence. The last thing I want is to distract local authorities by making them start to think that they need to draw up complex local carbon plans and strategies when they should be focusing absolutely on rolling out the green deal and allocating the relatively scarce and pressured resource of officer time on preparing for it.

Once the green deal is under way, we will benefit from the programmes that we have set up and from the increasing best practice that we are seeing around the country of councils that are further ahead on the agenda. I hope that we will be able to martial that and perhaps return with a further contribution to this live debate.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

I am delighted that councils will be preparing for the green deal. It is most important that they be ready to be green deal providers, or to work hand in hand with them and assessors, and so on. However, as we said in our earlier discussions, 30% of our emissions come from properties, be they household or commercial. It is great that councils can play a part in reducing that 30%. However, anything between 80% or, as the hon. Member for Richmond Park said, 100% of our emissions come from localities. It is that additional 50% that we want councils, through our amendment, to have a responsibility to do something about.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I think the hon. Lady is a little confused. Obviously, 100% of our emissions come from localities; I cannot think of a single area in the UK that is not covered by a local authority. By definition, unless they are in space, they have to come from within a local authority area. My hon. Friend the Member for Richmond Park made a key point: the hon. Member for Liverpool, Wavertree seeks to give local authorities the responsibility for emissions that are created within their area, despite the fact that they do not have the powers to control them. That is the difference.

There is a whole range of things outside the scope, remit and certainly the finances of local authorities, although, under the hon. Lady’s definition, local authorities are responsible for 100% of emissions in the UK. There is a definitional inexactitude. We must define what we really mean. This is a complex area. That is why I have spoken about carbon complexity. I particularly do not want the smaller, less well resourced local authorities wading into this issue unnecessarily, potentially at the risk of distracting them from making real progress and giving absolute 20:20 focus to preparations for the green deal. I think there is a way that we can advance the agenda, but seeking to rush this fence now would not be the sensible way forward.

We will continue to engage in our pilot programmes and work with local authorities, which are in a position to show leadership, and I salute, welcome and encourage them to go further. We will engage with Friends of the Earth, which has done a great deal to inform thinking around carbon budgets and push the agenda further forward. We will engage with my colleagues at the Cabinet Office and the Department for Communities and Local Government. This is not a dead subject. This is a live agenda that we will continue to return to and advance on, but we are not in a position—we need to be honest—to crack this one today. I hope, therefore, that members of the Committee will understand why I will resist the new clauses.

Photo of David Crausby David Crausby Labour, Bolton North East 4:45 pm, 21st June 2011

It is appropriate at this point to establish whether hon. Members intend to press the new clauses that are grouped with new clause 1 to a Division. Simon Wright?

Photo of David Crausby David Crausby Labour, Bolton North East

No. We are going to deal with new clauses 1 and 2 now. We will deal with the clauses in numerical order. We will not deal with new clauses 28, 29 and 46 from the point of view of voting now, but we will deal with new clauses 1 and 2.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

It was very positive to hear the Minister say that he was not against carbon budgets and that he would like to see them in due course, although not just now. However, we are ambitious; we think that the time is now and that we should be doing everything that we possibly can. We had the pilot and it worked very successfully. That is why we think it should be extended and expanded across the country. On that basis, we are going to be ambitious and press new clauses 1 and 2 to a Division.

Question put, That the clause be read a Second time.

The Committee divided: Ayes 8, Noes 11.

Division number 9 Decision Time — New Clause 1 - Carbon emissions in local authority areas

Aye: 8 MPs

No: 11 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

Photo of David Anderson David Anderson Opposition Assistant Whip (Commons)

On a point of order, Mr Crausby. May I clarify the position on new clause 46? I thought that I heard the hon. Member for Brighton, Pavilion say that she wanted to press the new clause to a vote and that you said it would not be discussed. Perhaps I am wrong.

Photo of David Crausby David Crausby Labour, Bolton North East

Not at this point. We will consider the new clauses in numerical order and so the opportunity will be there later.