Brexit: Environmental and Climate Change Policy

Lord Giddens Excerpts

Thursday 20th October 2016 Lords Chamber

[Lord Giddens (Lab)]

My Lords, I congratulate the noble Baroness, Lady Parminter, on having secured this debate and having introduced it so ably while struggling against what looks to be a pretty awful sore throat. I also have a sore throat, but it does not sound as bad, so I should be able to struggle through.

The Prime Minister of Luxembourg, somewhat improbably, made one of the best quips about Brexit. He said that the UK was in, but with lots of opt-outs, but wants to be out, with lots of opt-ins. In the case of climate change, which is a bit different from the single market, we hope that most of those opt-ins will be agreed by both sides.

In my speech, I shall concentrate on my concerns on the issue of climate change, arguably the most demanding challenge humanity faces in the 21st century. It is not only the most demanding, but the most intractable. On a worldwide level, virtually no progress has been made thus far in slowing the advance of global warming. World surface and sea temperatures in 2015 were the highest on record; 2016 is predicted by NASA to turn out even hotter.

Brexit seems insignificant compared to the global scale of the issue. After all, the UK creates only a small proportion of total global emissions. The country has a good track record in reducing those emissions compared to most other industrial states, and it has pioneered strategies of doing so that deserve to be emulated elsewhere. Climate change is a negative example of how interdependent the world has become and the impossibility of extracting any country from that interdependence, positive and negative. In such a world, Britain will have to continue to collaborate with other states, both in a European context and on a worldwide level, and in many, many different areas.

The area of climate change and energy demonstrates, in only one context, just how tortuous and difficult the process of Brexit will be. As in all the other domains of co-operation, the UK will have to sift in detail through what is to be kept and what is to be discarded, and in a context where the other 27 EU states will take the core decisions. Those who thought leaving the EU would mean an escape from bureaucracy are in for a rude shock. So far as the UK is concerned, there is likely to be a sharp increase, since in many instances specific procedures will be needed to deal with the details of the British case.

The think tank Carbon Brief, with which I am sure the Minister is familiar, has listed 94 questions for the Government to answer on the implications of leaving the European Union for energy and climate change. That list, the organisation adds, “is probably incomplete”. The Minister will be glad to know that the Government have already managed to answer one of the 94, by endorsing a fifth carbon budget consistent with recommendations from the Committee on Climate Change. There are only 93 to go. I will be more modest in my demands and list only five, or at least five clusters of issues on which it would be useful if the Minister would give some idea of the Government’s preliminary thinking.

First, somewhat disturbingly, one of the new Prime Minister’s first acts on coming into power was to close down the Department of Energy and Climate Change as a separate entity, seemingly connected with the invention of new departments relating to Brexit. Will the Minister unequivocally confirm that this change does not mark a downgrading of the significance of reducing greenhouse gas emissions? It is to the credit of the previous incarnation of the Government that much of the structure that Labour set up has been kept in place. Will the Minister confirm that all this will not only—to quote an unfashionable term—remain but be further deepened?

Secondly, the Paris agreement has now been backed by the European Parliament and has recently reached the level of international endorsement to come into force globally. How does the Minister assess the issues that surround the UK’s involvement? Will the UK ratify the agreement as a member of the EU or rely on the fact that it is already an individual signatory? Will Britain continue to take part in the EU emissions trading system, and if not, what parallel procedure will be developed?

Thirdly, what implications will Brexit have for the complex connections between the energy industries in the UK and the rest of Europe? Energy is obviously deeply implicated in all this. Some 50% of the gas used in the UK is imported and the bulk of this comes through pipelines that go through EU or EEA countries. Imported electricity has been projected to increase under current arrangements by more than double over the next few years. All this depends on the integrated arrangements made possible by the single market. Can the Minister say what happens if the UK is not able to stay a member of the single market, which is a distinct possibility if control of migration is taken to be the sine qua non of Brexit?

Fourthly, so-called hard Brexit—a pretty daft name, but it has come into currency—will have huge implications, both for climate change agreements and for energy more generally. In these areas, as in almost all others, the review of competences found that the existing arrangements worked well. It is an odd situation to be leaving the EU when that review went through every single connection and found that almost all of them worked well. If the UK were to leave the single energy market, a raft of environmental standards would have to be reconsidered. Moreover, the UK would be more vulnerable to the vagaries of energy markets than is the case at the moment. How would the Government handle these issues? As an addendum, personally I think that the UK will be vulnerable economically as it detaches itself from the EU because it is an open economy, subject to the whims of global investors. That is not taking back control.

Finally, how will the Government plan ahead in respect of climate change and energy policy when so many factors are in play, and when even the Chancellor has been forced to concede that economic turbulence is likely to be caused by Brexit? Assessments of impact will have to be carried out in the light of multiple contingencies, including possible changes in the wider world economy. The review of competences, which I just referred to, was child’s play compared to the multiplicity of issues that lie in wait and must be resolved.

Brexit sounds so simple and straightforward, especially now that Mrs May has explained to us what it means. However, the issues and problems it raises are dauntingly complex.

EUC Report: EU Freshwater Policy

Lord Giddens Excerpts

Wednesday 5th December 2012 Lords Chamber

[Lord Giddens]

My Lords, I congratulate my colleagues on Sub-Committee D for producing this report, especially those in the background who actually wrote most of it. I also thank my noble friend Lord Carter of Coles for—if I can put it this way—his robust chairmanship. The title of the report is An Indispensable Resource, but like so many other environmental goods, water is often treated as though there is an indefinite amount to go round. As climate change advances, it is likely to become a very scarce resource indeed, especially on a global level, although at some times and in some areas there will be too much of it as well. In other words, a mixture of droughts and floods—as other noble Lords have said—is a vision of our future.

In the UK over the past several years, we have seen just such a mixture. The same is also true at a somewhat more violent level on the continent, for example prolonged droughts interspersed with violent storms and flooding in the Mediterranean area. There was also an unprecedented flash flood in Copenhagen in July 2011, which completely paralysed the city. A recent daunting report on these issues was produced by the European Environment Agency only about a week ago. This showed that the past 10 years were the warmest on record in Europe—again the shape of things to come. I have four questions for the Minister. I shall make some comments and ask for his responses on the report, the Government’s response and the Commission’s blueprint.

First, as elsewhere, climate change will have a differential impact in the UK affecting different areas in opposing ways. Some areas will not have enough water and, as I said before, others will have too much. Water will have to be shipped around the country and new flood defences built. My question for the Minister is how can a national programme be developed, given the level of the industry’s privatisation in England and Wales? As the report makes clear, the English system is more or less unique in the EU in terms of the level of privatisation. Can that be reconciled with adequate overall planning for the future? Secondly, the Government’s response on water savings seems rather thin and inadequate. The report quotes figures of 20% of water wasted across the EU due to inefficiencies. New infrastructure will be needed, but we have to consider other strategic initiatives too. One is inducing culture change in the use of water by business and consumers. As someone who has worked on the many aspects of the field of reducing carbon emissions, it has proved difficult to change people’s everyday habits. Does the Minister think this can be achieved in the area of water efficiency, whether by metering or other means? I have to say that in other areas we have been notably unsuccessful in producing such behaviour change.

Thirdly, we will need some radical advances in technology. The report mentions rainwater harvesting as one area, but there are many others too. Do the Government see the European Innovation Partnership on water as likely to be of any value? What in substance does the Minister see it potentially delivering? Finally, picking out the point touched on by the noble Earl, virtual water is an important notion in this, especially for the future. It is an issue which is important internally in the EU because a lot of water is used invisibly, as it were, in manufacturing and service industries. As the noble Earl mentioned, it is also important in the UK and EU more generally in terms of the embodied water in imports. In this sense, it is similar to CO₂ levels, where the EU has, on the face of things, been reducing emissions since 1990. However if you include CO₂ emissions produced by transferring manufacture to China and other developing countries the picture looks very different. Does the Minister think that virtual water can effectively be measured and can we base practical policy on it? It is an intrinsically important aspect of the total mix when we try to produce a rational policy on water management. In conclusion, though, the Government’s response was pleasingly detailed, interesting and certainly took the work we did with due seriousness.

Adapting to Climate Change: EU Agriculture and Forestry (EUC Report)

Lord Giddens Excerpts

Thursday 24th March 2011 Lords Chamber

[Lord Giddens]

My Lords, the most reliable measurements we have of CO₂ in the atmosphere are those of the Mauna Loa observatory in Hawaii. As of February 2011, those showed levels of CO₂ to be still rising. It is up to 391.76 parts per million, compared with 389.85 parts per million last year. Not only are those rising, they are increasing at an accelerating rate from decade to decade. Because, as collective humanity, we are doing so little to change the situation, it is now unlikely that we will be able to confine global warming to an average to two degrees Celsius—as noble Lords will remember, the limit that most scientists regard as reducing risk to reasonably manageable dimensions.

Whatever we do now, there will be significant levels of climate change. Noble Lords should remember that that climate change is irrevocable and cumulative. Once the greenhouse gases are in the atmosphere they will be there for centuries, and we know of no way of getting them out again. That means that globally, regionally and locally we will be deeply in adaptation. The term “adaptation” sounds benign and almost reassuring, but the risks that we face are truly profound and scary. It is a myth to suppose that the most dangerous changes will be confined to the developing world; Europe is as vulnerable as anywhere else to the increasingly intense patterns of drought, flooding and extreme weather that will follow.

For that reason, because of its emphasis on adaptation, I welcome the report. It was produced before I became a member of the sub-committee but I congratulate my colleagues on its production and on their excellent work. It is a highly important report because agriculture and land use produce something like 10 per cent of the greenhouse gases produced by the European Union, including some very lethal ones, notably methane.

The report and the EU commissioner’s White Paper are both rich in detail so I will comment only on a few aspects, and then only briefly. First, a core point is that we have to think about adaptation proactively and in a long-term fashion. It is no good waiting for climatic changes to occur and then trying to adapt to them later; our defences against a newly aggressive nature would be quickly overwhelmed. We have to prepare and invest now for outcomes that may be 20 or 30 years off. This is a difficult situation because it involves the assessment of future risk and there are several different scenarios for what that risk will be, so preparing for the long term is complex—it is not a simple matter. However, it is easy to find instances of where the threats are. For example, the core agricultural industries that exist in the southern Mediterranean almost certainly will not be there at all 20 years down the line, so we face massive issues of adaptation and we have to prepare now, not leave them for the future.

Secondly, improving the resilience of crops, woodland areas and water management systems is going to be key. Science and technology will have a massive role here, and I agree wholeheartedly with the comments that the noble Earl has made on this issue. I agree with the report when it emphasises the importance of biotechnology, which is probably the only way of simultaneously increasing the productivity and the hardiness of crops in response to changing climatic conditions. I do not see any other way of doing that on the horizon.

Thirdly, it is right to point out, as has been pointed out, that forestry has a dual role. Over 40 per cent of the EU is still forested. Protecting the forests is crucial since deforestation is a major source of greenhouse gas emissions in Europe and across the world. Forests also absorb CO₂ and therefore act as a brake on emissions. I think that the Green Paper on forestry and the work on forestry that is currently being done in the European Union and, I hope, in this country will have a crucial role in adaptation in future.

Fourthly, it is important to stress that there is a positive side to all this, in spite of the real risks and dangers with which we will have to cope. We know that creating a low-carbon economy can have many positives, such as reducing our dependence on imported oil and gas, creating new industries and generating net new jobs. It is not often said that much the same goes for adaptation, which will also have to be creative and innovative. It will, I hope, at least have similar positive consequences. A good example is the research that is now going on into latest-generation biofuels. They can be grown in areas where no crops can be grown at the moment; they can be grown in the far north and, in the form of algae, in the oceans. There are many other examples of a proactively positive approach to adaptation. It is important not to lose sight of the significance of this.

The tasks facing us are huge. It is an open question whether, on a global level, we can cope with them. Certainly, in our region we must do so on a pan-European level, as it is obvious that climate change is no respecter of national boundaries. In conclusion, I would like the Minister to comment on anything he sees fit to comment on in what I have said, but also on one core question. Does he accept that adaptation to climate change must be proactive and demands a long-term strategy, as well as a pro-European one?

Higher Education (Basic Amount) (England) Regulations 2010

Lord Giddens Excerpts

Tuesday 14th December 2010 Lords Chamber

[Baroness Sharp of Guildford]

My Lords, the noble Lord, Lord Triesman, taunted those of us on these Benches with the fact that, in the 2004 debate, we argued for, and gained the right for, Parliament being able to debate any change in the level of fees and fee regulation. This is precisely what we are doing today.

Like the noble Lord, Lord Bilimoria, and the right reverend Prelate the Bishop of Lincoln, I regret the degree to which the present debate over fees has ignored the wider cultural and social benefits that stem from our much praised universities. “Learning is for earning” was one of the headlines that followed the report issued by the noble Lord, Lord Browne. We have to some extent lost the carefully balanced and nuanced approach taken by the late Lord Dearing in his report 13 years ago. The Dearing report suggested that university education has three beneficiaries: society as represented by the Government, the student and industry. That report also suggested that the costs of such an education should be shared among the three.

I have some sympathy with the package of proposals being put forward by my honourable friend the Secretary of State for Business, Innovation and Skills in the other place. The proposals have a number of distinct advantages over the present situation. First, what is on offer is undoubtedly more progressive than the current system in that the less well-off—those coming from poor households and earning low salaries—will get a bigger maintenance grant and more advantageous loan conditions than under the present fees system. The richer students, specifically those earning higher salaries, will pay more than under the present system. Therefore, as my honourable friend has claimed, the proposed scheme is more progressive than the current scheme.

I also welcome, as all noble Lords have done, the extension of loans to part-time students, which rights a long-running and major inequity in our system. For much too long, the system of loan and maintenance grants has favoured and given a very positive incentive to students to study full time. The reforms open the way to make our higher education system much more flexible, so that the student can mix part-time and full-time courses and mix distance learning with campus-based studies. In the long run, those changes will transform our university system and make it much more like the American system, which many people wish it to be. In that sense, I agree wholeheartedly both with the Minister, who said that the measure will, in essence, change how universities will move, and with the noble Lord, Lord Triesman, that the measure is a game-changing proposal.

As is now well known, I have some substantial reservations with the package being put forward. Although the new package is, as I have said, undoubtedly more progressive than the current provision, we cannot get away from the fact that, with the rise in fees possibly to as high as £9,000 a year, the size of the outstanding loans on graduation will be larger. With maintenance loans as well as the fee loans, most students will be looking to debts of between £30,000 and £40,000 a year. If two graduates set up household together, the total debt will be from £60,000 to £80,000. Whatever people say about students now being used to debts, the work undertaken by the Sutton Trust and Sir Peter Lampl shows clearly that such a sharp hike in fees may well make students very uncertain about whether they wish to go through to university.

Because the loans will be larger, they will also be less likely to be repaid. Indeed, any person earning less than £41,000 will not even be paying off the interest due on the loans. Only graduates earning more than about £50,000 will pay off substantial amounts of capital. It is estimated by a number of organisations, such as HEPI and the IFS, that something like 50 per cent of graduates will never pay off their loans. Disproportionately, those will be women, who earn less and are more likely to go part-time or to take a period out of earnings.

One good thing about the package being proposed is that, unlike credit card debts or mortgages, when a graduate’s earnings go down the payments will also go down. However, the debt will not go away. For anyone earning more than £21,000, 9 per cent of anything that they earn will be subtracted through PAYE on top of their income tax and national insurance—and that will last for 30 years. If you do not repay your debt, 9 per cent on top of your income tax and national insurance will be extracted from your pay package on anything you earn over £21,000. In effect—my honourable friend has said this—the loan will become a graduate tax of 9 per cent. Personally, I feel that that is a very high level of graduate tax. I feel very strongly that those of us who benefited from having no tuition fees and generous maintenance grants in the 1960s, 1970s, 1980s and 1990s, are landing on young people of today—the next generation—quite disproportionate costs in that respect.

My second objection is an arcane point that relates to the financing mechanism. Loans do not come for free and substantial loans will be needed to back up the payments being made to the students. The Student Loans Company is funded by the Exchequer, which in turns borrows the money that it lends to the Student Loans Company. The Student Loans Company will then sell the debt on, on the grounds that one person’s debt becomes another person’s asset. However, because so many students will never pay off their debts, the value of those loans when sold on has to be discounted. The Treasury figure for that discount is 28 per cent, but HEPI, the IFS and London Economics all think that that underestimates the repayment issues. Even if we accept the Treasury figure, the annual cost of fee loans and maintenance loans combined to the Treasury will be roughly £2.8 billion for every £10 billion tranche, so the cost to the Treasury down the line will be just about the same as is being taken out of the higher education budget—£2.9 billion. I find myself asking why we are taking that money out of the higher education budget if down the line we will need to meet that cost, which will be more or less exactly the same. The answer, of course, is that doing so conveniently takes the sum off the current account and, through the Student Loans Company, switches it into part of the capital account that is not part of the national debt. Therefore, the cost is in effect taken off the books. That is very convenient, but it will come back on to the national debt at a later point.

Those are my reservations about the package. For all the merits of the proposed system, I end up thinking that it will be unfair to low and middle income students, who will have to pay 9 per cent on top of national insurance and income tax for a very long time. However, I have very little sympathy with Labour’s position, which I find somewhat hypocritical. The Labour Government introduced student fees after a pledge not to do so back in the 2000s. Not only did the Labour Government set up this loans system that is now being extended, they commissioned the Browne report and set its terms of reference while deliberately ducking from taking any decision on what they would do with the report until after the election. Having rejected the idea of a graduate tax when it was put to them in 2004, they are now arguing that a graduate tax would be a fairer system.

I do not hide the fact that I find myself in a dilemma. There are elements of this package that are very fair, very right and very proper. My honourable friend has lent over backwards to make it into a fair package. However, I end up feeling that there are other elements in it that I do not understand and that are unfair.

[Lord Giddens]

My Lords, I speak in this debate not primarily as a Labour Peer but as an educator and a former director of the London School of Economics. I have worked in universities the whole of my adult life and in a considerable diversity of universities. I believe that the Government’s legislation will be highly damaging for the university system and, as an educator, I should like to explain why.

The flaws in the legislation come from two sources. The noble Lord, Lord Browne, will forgive me, but the first is the erroneous view of the Browne report that higher education is a private benefit rather than a public good. The right reverend Prelate, the Bishop of Lincoln, rightly drew attention to that in a forceful fashion. In contributing to the values of good citizenship and civic culture, the public role of universities ranges far beyond the areas identified in the report. Secondly, the decision to cut the teaching grant by 80 per cent is way in excess of what is necessary or sensible. I do not feel that Labour is being hypocritical in saying that, because the Government must be obliged to look at the proposals again.

No other university system in the world will charge students such a high level of fees with such inadequate safeguards to protect those from poorer and middle-level backgrounds. Comparison has been made with the American system, but the system that is proposed is not like that. We will get the worst of the American system without the safeguards that US universities have. Perhaps I might list those briefly, because they are very substantial and show that the public domain is far more representative in American universities than will be the case in the system that the Government seek to introduce.

--- Later in debate ---

[Lord Patten of Barnes]

No, as I shall explain in a moment, they will not be doing that in the case of the university that I know best. I remind the noble Baroness that the former Prime Minister wanted to introduce fees in 2004, not of £3,000 but of £5,000. He could not get that through the House of Commons largely because of the views of his honourable friends in the Parliamentary Labour Party, so let us not rewrite history. I suggest that the noble Baroness should refresh her memory by reading Mr Blair’s autobiography.

My Liberal Democrat noble friends have been teased about changing their mind. As my noble friend Lady Sharp pointed out, there are very strong reasons for their change of mind. It was slightly ironic that in his flirtation with the Liberal Democrats yesterday, the leader of the Labour Party, in a less than bravura performance, offered them the opportunity of talks with Liam Byrne. That must have set their pulses racing with excitement. But what makes it particularly ironic is that it is the same Mr Byrne who, as my noble friend Lady Shephard pointed out, gave the game away and told us after the election that there was no money left—zilch. I am not sure that it is the right moment to follow the right reverend Prelate in questioning why public debt is so terrific but private debt is such a bad thing. At some stage we could seek the authority of the New Testament on that proposition, but perhaps this is not the right moment.

When we consider changes to what one has promised the electorate, I seem to recall what happened in January 2004, after the then Labour Government had changed their position. When asked,

“Is the party open to the charge that it has broken a manifesto commitment?”,

Mr Alan Johnson replied yes. When asked:

“Is that crime of a century for a government to do?”,

he replied no. If one is to believe what is said about the public accounts under Labour, Mr Johnson did not have the excuse then of the bank having been broken.

I want to make a couple of points about the proposals themselves, not going any further into the seam of intellectual integrity which has underpinned the Labour Party’s position. I have a couple of questions. First, I think that all of us want to see an increase in the endowments for our universities, which are well behind our American competitors in that regard, as the noble Lord, Lord Giddens, pointed out. Can we be sure that the Government will look at how they can encourage philanthropic donations in the future, not just to charities in general but to our university sector in particular because it is of considerable significance?

[Lord Giddens]

Does the noble Lord agree that it would take many years for a substantial proportion of universities here to build up enough endowment to create a needs-blind admissions system?

[Lord Patten of Barnes]

Yes, it would take time, even for those universities which do not have as many foreign students as his university does.

--- Later in debate ---

[Lord Ashdown of Norton-sub-Hamdon]

I understand the point that the noble Lord is making. However, we accept that it is reasonable for people to borrow huge sums to get themselves on to the property ladder. I see nothing different in following the same broad system. This is equivalent not to a credit card debt but to a mortgage. It is perfectly reasonable that we ask people to pay a significantly smaller amount of interest on a debt that will improve their life chances. There is nothing odd or strange in that.

My final question is that of fairness. The noble Lord, Lord Triesman, made the case that somehow or other—

[Lord Giddens]

My Lords—

[Lord Ashdown of Norton-sub-Hamdon]

I hope that the noble Lord will forgive me. I would really like to draw my remarks to a close.

Queen's Speech

Lord Giddens Excerpts

Wednesday 2nd June 2010 Lords Chamber

[Lord Giddens]

My Lords, I think that I am number 47 in line to congratulate the noble Baroness, Lady Wilcox, on her excellent opening speech, to welcome the other new members of the government Front Bench and to congratulate my noble friend Lord Myners. I think that I am also about number 10 in line to offer comments on climate change and energy security. Since so many other noble Lords have spoken on this issue, I will keep my comments brief.

I generally endorse the policy outlined by the Government as described in the coalition programme document and noted in the noble Baroness’s speech. However, I should like to ask three or four questions or pose three or four problems. First, in the documentation that I have seen so far, the Copenhagen accord is not mentioned. What is the Government’s view of it as a potential way forward in international negotiations? The Government say:

“We will work towards an ambitious global climate deal”.

But how will they do that? What kind of climate deal do the Government have in mind?

Secondly, the Government are right to endorse feed-in tariffs and community-owned renewable energy schemes. However, it is impossible to see how one can have effective climate change and energy policy without a strongly interventionist state. The recent Ofgem report marks pretty much a volte-face in policy on the part of that organisation, recognising that a free-market approach to energy investment has major flaws. If the state has to play a fundamental role in climate change and energy policy, how will the Government reconcile that with their reservations about the state as outlined in other aspects of their policy programme?

Thirdly, the Government say, in my view quite rightly:

“We will introduce a floor price for carbon”.

But how will this be achieved and where will that floor price initially be set?

Fourthly and finally, as is well known, the Liberal Democrat partners to the coalition were originally bluntly opposed to investment in nuclear power. An agreement has been reached about such investment based on the premise that it can go ahead so long as no public investment or support is involved. EDF seems to agree that it can go ahead on that basis and invest in nuclear power stations. However, what will happen if that is not the case and public support is needed for an effective investment in nuclear power stations to go ahead?