Natural Capital Committee

Baroness Miller of Chilthorne Domer Excerpts

Thursday 24th October 2013 Grand Committee

Asked by

[Baroness Miller of Chilthorne Domer]

To ask Her Majesty’s Government what changes they will make in resource allocation in the light of the assessments of the Natural Capital Committee.

[Baroness Miller of Chilthorne Domer (LD)]

My Lords, the Natural Capital Committee is clearly a bit like a bus. There has been no mention of it in either House for ages, and then suddenly this week two debates come along at once. I am delighted about that. We are privileged in this House to have the Defra Minister responsible for it, my noble friend Lord De Mauley, to respond to us.

Although the Natural Capital Committee deals with many Defra matters, it was commissioned by the Treasury and reports to the Economic Affairs Committee of the Cabinet, which is chaired by the Chancellor of the Exchequer. The NCC’s job is to advise the Government on the state of English natural capital. The establishment of the NCC is one of the rather quiet but very significant things that the coalition has done. It is part of a package. In 2011, the Government also introduced the natural environment White Paper The Natural Choice and the UK national ecosystem assessment which shockingly found that one-third of the UK’s ecosystem services was declining severely. If the UK’s ecosystems were protected and enhanced, they could add at least an extra £30 billion annually to the UK economy. By contrast, neglect and loss of ecosystem services can cost us as much as £20 billion a year.

The Government made these moves as part of a plan. Previously, successive Governments and the public have really thought about natural capital only in response to a crisis, some sort of wake-up call, whether floods, droughts or food prices. The coalition Government were certainly reminded early on of just how much the public value natural capital when they announced their plan to sell off UK forests. The coalition Government learnt that the public value natural capital, even if they do not consider all parts of it.

I was moved to bring this debate as a result of a conference on soils. Soils are perhaps the most vivid illustration of our natural capital. The development of soil takes between 500 years and perhaps 10,000 years. Even a centimetre of topsoil takes at least 200 years to develop. Soil is the basis of our food production, but it is much more than that. It is important for carbon storage, water absorption and water filtering, and is crucial as the first layer in the food chain. How have we treated this virtually irreplaceable resource? We have allowed it to be eroded, polluted, washed away and built over. People may own the land, but the timescale that soil takes to form puts it into the category of a real commons for the nation—or natural capital.

Let us take another part of our natural capital that has been the subject of debate in our Chamber recently: bees. Pollinators are—to mix my metaphor—perhaps the canary in the coal mine. We do not know why bee colonies have collapsed; there seem to be several possible contributory factors. Only recently have people begun to appreciate that, beyond the luxury of honey, the pollinator services of bees and their many pollinating relatives are critical to food production. The collapse of bee populations is mirrored by those of frogs and other amphibians. Could it be that the use of substances such as neonicotinoids is having a much wider effect, or is it the cocktail of pesticides that needs further examination? It has always seemed bizarre to me that a product is tested alone when in reality a cocktail is being used out there.

That brings me to the first question for my noble friend. The NCC rightly sees developing a research agenda on natural capital as a priority. The research agenda on the constituents of natural capital is badly in need of some major help and overhaul. I have seen plenty of evidence which suggests that attempts to ensure the future health of our natural capital might be undermined unless research priorities are better aligned to overall needs and move away from the quick buck producing areas. The determinants of innovation and factors that influence research choices, such as science policies, public-private partnerships and the career paths available, all combine to favour technological regimes that tend to suit very focused, reductionist approaches rather than the holistic ecological approach that is needed to address ecosystems and the sort of complex interactions that we get between, for example, soil and water. Can my noble friend confirm that the Government will ensure a move to a more appropriate balance of research?

I have referred to a few other elements of natural capital such as water, minerals, stone, gravel and energy sources, whether oil or gas. They are all part of the natural capital that is fundamental to our manmade economy and society. We could not have a manmade economy if it was not underpinned by all those elements. Our failure to adequately protect our natural capital could well be a fatal step towards an economy that diminishes severely over time.

One of the problems is that efforts to protect our natural capital have too often been made on the basis of the intrinsic or aesthetic value of, say, woodlands, uplands, clean streams or bird populations. I accept that we may succeed in better protection if we explicitly demonstrate the value that society places on our natural assets, thereby protecting and maybe even enhancing them for future generations. The Natural Capital Committee is part of that effort. The first annual report of the NCC earlier this year contained a number of important recommendations, and I wonder if my noble friend would be able to comment on one of them. The NCC stated that,

“the Government’s efforts to reform the Common Agricultural Policy be intensified, with a long-term view to phasing out Pillar one support and moving subsides towards Pillar two and the provision of public goods”,

and thereby,

“securing as much flexibility as possible in how funding can be allocated for the period 2014-2020”.

If my noble friend could tell us how that work is going, I would be grateful. Will he also encourage the NCC to consider who should be the innovators of these approaches? Clearly, there will need to be some pilot areas; the national parks are one obvious example, but what about the Crown Estate? It is also responsible to the Treasury, and there it is with swathes of our natural capital under its management. Surely it should be a cradle of innovation.

I have a few comments to make on the NCC itself. It held a useful open event at the Royal Society and its first annual report is quite readable. However, the minutes of the NCC are dry to the point of desiccation. This is important because it needs to be outward facing if it is to succeed in integrating the thinking that is being developed into the mainstream and make it the discussion of the day in boardrooms. It will also need to develop some work with institutions such as Cranfield because it is disappointing to read that the Committee concluded,

“that it is not currently possible to identify with any certainty precisely which natural capital assets are being used unsustainably, especially given the available data and knowledge about limits and thresholds”.

That seems to be under-ambitious, although the Committee does go on to say that the rate at which natural assets are being consumed is “unprecedented”.

In conclusion, I must say that there are plenty of cynics out there who think that the NCC is just a way to suggest that the Government are after some green credentials. Whether that is the case or not will be proven in whether policies start to shift in decision-making across all departments, and by the Treasury itself in the way it allocates resources. We need some startling, if welcome, decisions and some much more radical policies.

The next debate, which my noble friend is also going to answer, is on the Thames Tideway Tunnel. That is a good example of what I am talking about. Faced with the same sort of problem as London, the city of Philadelphia chose a radically different solution, avoided many costs, enhanced its environment amazingly and brought solutions down to a neighbourhood scale. The NCC is perhaps looking at such worldwide examples of practice that could help its deliberations, and I hope that the noble Lord, Lord Berkeley, may go into the Philadelphia example. The NCC is subject to review in 2014, and I certainly hope there will be no question but that it should continue. We really need its work.