Future Free Trade Agreements

Debate between Barry Gardiner and Helen Goodman

Thursday 21st February 2019 Commons Chamber

[Barry Gardiner]

I will make a little progress.

The Government’s primary focus must be securing a deal with the EU, which accounts for 44% of all our exports. The Department for International Trade’s primary focus must be to secure the so-called roll-over agreements—a promise repeatedly made by the Secretary of State, which he has now only 35 more days to deliver. Thousands of businesses depend on the ability to continue to operate their just-in-time supply chains, and thousands of jobs in this country depend upon the same.

Questions have repeatedly been asked of the Government’s capacity to handle even the volume of work required to get these deals over the line—more so given the UK’s relative lack of trade negotiation experience after some 40 years of not being able so to do under the EU’s common commercial policy—yet today’s debate is to consider a number of potential new free trade agreements with Australia, New Zealand and the United States, and the potential accession of the UK to the comprehensive and progressive agreement for trans-Pacific partnership.

The Opposition want to see progressive, positive trade agreements that benefit the UK, help to grow our export potential and further enhance the UK’s attractiveness as a destination for investment, but we have been clear from the outset that the priority must be securing a deal with the EU and ensuring continuity of trade for British business, including with respect to trade agreements that the EU has with third countries. There is a good reason for that, which is that any major trading partner will want to know what trading arrangements we have with the EU before concluding a trade agreement with us in future. That seems self-evident. If we are not able to conclude the free trade agreement with the EU, perhaps right into the transition period, that will substantially impair our ability to secure a new trade agreement with any of the three countries that we are considering today.

The Secretary of State is like a general who fails to secure his rear before charging off in search of a new enemy to fight, but that is not his only embarrassment. The letter written to the Prime Minister this week by the chief executive of the British Ceramic Confederation is excoriating about the total lack of understanding displayed by the Secretary of State of the impact of the proposals he favours for a move to zero tariffs in as many areas as possible. The chief executive sets it out in surgical detail:

“Removing import tariffs gives a leg up to foreign competitors, thus threatening British manufacturing jobs.”

She continues:

“Our manufacturers would still be paying other countries’ import tariffs including, in the event of no deal, EU MFNs and other countries’ MFNs where we will have just lost our preferential access. The net effect across all sectors could be to increase imports at the same time as exports are being put under pressure with a resulting adverse effect on balance of payments.

No tariffs makes the UK’s emerging trade remedies system ineffective from the outset by lowering the cumulative duty paid on the distorted imports, for example, by 12% in the case of dumped Chinese tableware.

It would weaken the UK’s hand in making free trade deals with other countries. If we give away access to Britain for free, why would anyone need to do a trade deal with us?”

[Helen Goodman]

Will my right hon. Friend give way?

[Barry Gardiner]

I will, but my hon. Friend has promoted me.

[Helen Goodman]

I am grateful; my hon. Friend is making an exceptionally important point. I have had the ceramics industry in touch with me because I have a brick factory, Wienerberger, in my constituency. Zero tariffs would also be catastrophic for farmers. Does he not agree that if the Secretary of State is planning to bring forward a statutory instrument in this form next week, he should have had the decency to announce it at the Dispatch Box today?

[Barry Gardiner]

I do not know whether my hon. Friend was in the Chamber just prior to the debate starting, but I raised a point of order with Mr Speaker—obviously, you were not here, Madam Deputy Speaker— to say that the fourth written statement due to be laid before the House today had not been made available prior to this debate. I thought that was a great shame. Mr Speaker expressed his view that, of course, these things sometimes happen inadvertently. If it was advertent, he deprecated it. But of course, there is a pattern here, and my hon. Friend is right to point to that pattern. I share her hope that we will not find next week that there are further documents that either would have been vital for today’s debate or are being produced at exactly the wrong point for Parliament to have the maximum opportunity to scrutinise what the Government are doing.

The British Ceramic Confederation letter continues:

“Some members thought if we are importing, say, a raw material, that was not manufactured or quarried in the UK a liberalisation might be acceptable. Our members are clear this should be an exception rather than a general rule and comprehensive consultation would be needed.”

Of course, the chief executive rightly also points out that most other sectors have not had the same level of discussion with officials that ceramics has had, and so are largely unprepared for the potential impact of a unilateral snap move to zero most favoured nation tariff rates. There has been no comprehensive formal consultation, no comprehensive impact assessment and no prolonged transition proposed. Such a significant decision would have far-reaching consequences for the UK economy and would demand full parliamentary scrutiny.

Consultation, impact assessments and parliamentary scrutiny—those are all the things their lordships are still waiting for before returning the Trade Bill to this House, and all the things this debate ought to have been about, rather than putative future agreements whose working groups have been mired in secrecy and which the Secretary of State sees as his vanity project of restoring the Anglosphere.

The letter continues:

“In a no deal Brexit, already highly damaging and disruptive for our sector, the shock of zero tariffs would be devastating, affecting businesses, jobs and communities across the country as well as affecting UK manufacturing more generally.”

Of course, it is not just the ceramics industry that is horrified by the Secretary of State’s proposals. The Manufacturing Trade Remedies Alliance, which is made up of eight national trade associations, as well as three trade unions, only yesterday put out an equally strong press release damning the folly of a wholesale reduction to zero tariffs, saying that

“the move could ruin the home market for many sectors. Increased imports would flood the market, jeopardising tens of thousands of jobs and fundamentally changing the British economy.”

Ian Cranshaw, head of international trade at the Chemical Industries Association, said:

“The idea of a new tariff regime is something which should be subject to proper consultation. With less than 40 days to Brexit, British manufacturers already dealing with Brexit uncertainties are now having to assess how their business might be impacted by an increase in non-EU competition should the government remove MFN tariffs on key chemical products.”

Finally, Jude Brimble, GMB national secretary, said:

“Zero tariffs in the event of a no-deal Brexit is a short-sighted move. While it may lower prices in the short term, it will ultimately put thousands of British manufacturing jobs at risk.”

Exiting the European Union and Global Trade

Debate between Barry Gardiner and Helen Goodman

Thursday 6th July 2017 Commons Chamber

[Barry Gardiner]

My hon. Friend does not want to see a decline in jobs in any sector of this country. It is really not right simply to dismiss the fact that, if we do not secure friction-free, tariff-free arrangements with the European market, those jobs could be prejudiced in this country. I am sure that he would want to take cognisance of that.

Cross-border data flows are a key cornerstone of the digital economy. They help to drive UK innovation, economic growth and business efficiency through facilitating data transfers between organisations located in different countries. To help our economy grow and create jobs in the UK, we need to create a trade environment that drives innovation and positions the UK as a leader in the digital economy. techUK speaks for business when it says that the Government need to facilitate access to both the European market and the rest of the world, but this requires appropriate cross-border data flow arrangements with our different trading partners. It sounds simple. It is not.

The Transatlantic Trade and Investment Partnership negotiations on the EU’s privacy shield framework to replace the safe harbour privacy principles demonstrated that facilitating cross-border data flows between the European system and the American system is a genuine challenge that will not be addressed overnight in future free trade agreements. We cannot simply create a separate trade policy on this issue for the EU and a different one for non-EU countries. The direction we take on one influences our options on the other. Will the Minister set out what discussions he has had with industry on this and what decision, if any, he has taken about the appropriate way to go forward? He will appreciate that the issue of cross-border data flows is not just about facilitating market access. It is also about the regulatory framework to provide data protection for privacy and human rights.

The second example of the inseparability of EU trade and our policy for trade with the rest of the world relates to the future support that we provide our agricultural industry. The UK’s food and farming industry is not only important to our national identity; agriculture also contributed £9.7 billion to the UK economy in 2016. Our food and farming industry is the product of decades of shaping by the European single market and the £3 billion-plus of support from the common agricultural policy.

The EU’s combined rights and shared obligations under the WTO include a specified limit on the amount of agricultural subsidies that the EU may utilise. The UK is entitled to a share of these as part of the Brexit divorce and could, in theory, continue with a modified version of the CAP. But the Secretary of State will know that there are rumours that his Government are considering a deal whereby the UK would give up a share of its agricultural subsidies to the EU in order to secure a more favourable deal for other sectors of our economy. Will he guarantee today that our future trading relationships will not be based upon the sacrificing of British farmers and their livelihoods?

It is not just the EU that will be pressurising the UK to drop its share of agricultural subsidies. A number of countries have already expressed interest in free trade agreements with the UK on the basis of liberalising our agricultural market. Countries such as Australia, Canada, New Zealand and South Africa are active members of the Cairns Group, which is a WTO negotiating group precisely for agricultural trade liberalisation and the reduction of subsidies. Does the Secretary of State regard this liberalisation as positive for our farmers?

[Helen Goodman]

I am extremely concerned to hear what my hon. Friend is saying given that there are 400 sheep farmers in my constituency, who would be very badly affected were we to have a flood of cheap lamb imports from Australia and New Zealand. Does he agree that there can be no virtue in our destroying the hill farmers in our country to benefit the sheep farmers in wealthy countries such as Australia and New Zealand?

[Barry Gardiner]

My hon. Friend is absolutely right to point out that, were we to go on to WTO terms—from memory, the tariff rate for sheepmeat is about 44%—we would absolutely destroy the capacity of our hill farmers in particular to compete with foreign imports.

The Government need to come clean and give clarity to the British food and farming industry on our future trade policy options and what that means for the industry. It is not good enough to tell farmers that the status quo will be maintained until 2020 and then leave an abyss as to what options are available for their future. These people need a comprehensive international trade policy, and they need to know what it is.

Beyond Brexit, as the United Kingdom once again assumes competence for its own independent trade agreements, the Secretary of State must set out how he is pursuing agreements that share the benefits of globalisation more equitably. One can only wonder that this Government thought it sensible to embark upon a new industrial strategy without first publishing a White Paper on trade, so will he publish a trade White Paper? He has introduced a trade Bill in the Queen’s Speech but, as of this moment, he has not set out to Parliament or to business any policy on which to base it.

The Secretary of State has been travelling around the world holding preliminary talks with his counterparts. In fact, he has recently returned from a visit to the USA. When the Prime Minister first announced the start of preliminary talks with the USA, the American Farm Bureau Federation wasted no time in confirming that it would seek food hygiene changes in any UK-US deal, namely to end restrictions on US exports of chlorine-washed chicken and hormone-grown beef. Will the Secretary of State confirm to us that, in any talks about future trade deals, the sovereignty of our food safety and environmental protection standards will be not be sacrificed in the name of regulatory harmonisation?

An industrial strategy and international trade White Paper should have come together precisely because of the interdependence of trade, job creation, and economic growth. That makes Labour Members fearful that the Government have not done the proper assessment of the danger that future trade arrangements could pose for job losses and wage depression. The Government have put the cart before the horse. A trade White Paper should set out what the UK’s future policy on trade defence instruments will be. The EU currently has in place a series of trade defence measures, such as anti-dumping measures against China—and, to a lesser degree, India and Malaysia—on steel, other metals, and solar panels. The UK has famously opposed such measures at the EU. Now that we will be able to set our own trade policy, the Government must tell us whether they will stick to that line. If they do not plan to introduce trade defence measures, they need to set out whether and how they will protect and support sensitive sectors such as the steel industry and the solar panel industry from cheap imports.

The Government must also weigh whether they can afford to take a tough stance with countries like China and India with which they will be looking to conclude trade deals—or will they sell out our steel sector and others? The UK steel sector is in an existential crisis. My hon. Friend the Member for Middlesbrough South and East Cleveland, who chaired the all-party parliamentary group on steel, and my hon. Friend the Member for Aberavon (Stephen Kinnock), who launched the “Steel 2020” report earlier this year alongside my hon. Friend the Member for Redcar (Anna Turley), expressed outrage at the Government’s leaked memo that suggested steel would not be a priority industry post Brexit, threatening to destroy the very livelihoods of communities across England and south Wales. Similar concerns were raised by my hon. Friend the Member for Stoke-on-Trent Central, as the ceramics industry in the Potteries faces increasing competition from Chinese dumping on world markets. The British Government have for the past number of years been blocking efforts by the EU to introduce the sort of anti-dumping measures employed by the US by repeatedly exercising a veto and actively encouraging a blocking group of other nations. One official in Brussels is reported as saying:

“The British are sacrificing an entire European industry to say thank you to China for signing up to the nuclear power project at Hinkley Point, and pretending it is about free trade.”

It is right that we reach out to our international counterparts, but travelling around the world to hold “pre-negotiations” is no substitute for clear policy that sets out what our negotiating armoury is. An international trade White Paper should set out the Government’s principles—a clear plan of what the UK intends to achieve through future trade negotiations.

Paris Climate Change Conference

Debate between Barry Gardiner and Helen Goodman

Thursday 19th November 2015 Commons Chamber

[Helen Goodman]

Of course, it is true that coal-fired power stations will eventually cease to be effective and that they would have to be closed anyway, and it is good that the Secretary of State has formalised that commitment. However, by investing in new gas-fired power stations, we are committing, not just for now, but for 30 years, to a reliance on imported gas. That is problematic, partly because it does not improve energy security and partly because it will not result in decarbonisation.

[Barry Gardiner (Brent North) (Lab)]

Is my hon. Friend aware that, of the 10 coal-fired power stations that are still in operation, three were due to close next year in any event and that all but two of the others were likely to close by 2023? Therefore, by saying that there will be no unabated coal by 2025, the Secretary of State has spun an extension of coal-fired power stations into an ending of unabated coal. That is a neat political trick, but it is not exactly where we want to be.

[Helen Goodman]

My hon. Friend is extremely well informed. I was not aware of those points.

Biodiversity

Debate between Barry Gardiner and Helen Goodman

Thursday 16th September 2010 Westminster Hall

[Barry Gardiner (Brent North) (Lab)]

I, too, am pleased to speak in this debate under your chairmanship, Mr Crausby. Last year, the UN climate change convention met in Copenhagen. It attracted the most incredible media frenzy, and something of a political frenzy as well, as Prime Ministers, Ministers and politicians from all over the globe made sure that they had a suitable photo opportunity.

In a month’s time, its sister convention on biological diversity will meet in Nagoya, Japan, to discuss why whole species are moving into extinction at a rate that, barring the loss of the dinosaurs, is unprecedented in the entirety of the fossil record of life on this planet. So far, the convention has met with total silence from the world’s press—why? How do the world’s most eminent scientists propose that we tackle the problem of extinctions?

One of the first things I was told in the Department that the Minister now occupies was the wonderful target that had been set to halve the rate of decline in species loss by 2010. That was the UK’s national target. I said that that was wonderful and asked the civil servant what was the rate of loss that we were going to halve. He said that the rate of loss was not known, and I asked how we would halve the rate if we did not know what it was. He replied that we would use indicators. We started without a sufficient baseline. The European Union tried to bail us out, of course, and said that it would substantially reduce the rate of loss. That European target was a bit woollier. With such an assessment at the beginning of the project, it is not very surprising that we reached 2010 to find that even those indicators have not enabled us to say that we have had any real success.

Where will we go in Nagoya? Top of the agenda will be natural capital. I welcome the Minister’s comments on the subject, and all that he said about the TEEB report and Pavan Sukhdev’s astonishing work. We must take on board the fact that one of the great advances in the past 100 years in classical economics was acknowledgment that there is such a thing as human, social and intellectual capital. We have come to realise that a well functioning judicial system and an excellent education system are as much a part of the wealth of a nation as its roads, ports and factories. The irony is that economists and economies have not caught up with the most important capital—natural capital.

Natural capital may be defined as the benefits that accrue to human society from the different species of life that inhabit the natural world—the biodiversity that is the subject of our debate. Classical economics values things such as forests by adding the sale price of the timber that can be harvested, and the alternative use to which the land may be put. A pine forest in the mountains will be worth a lot less per hectare than a forest of oak and ash close to good arable land and a river. Soft wood pine sells for pulp or low-grade timber, but oak and ash sell for designer kitchens. The mountain land has few alternative uses, but river land may raise prime beef. So that is how forests are valued. Wrong.

The true value of forests lies in far more than that. They stop soil erosion, prevent flooding by absorbing moisture, and control climate, often regulating local as well as global weather patterns. They are a source of medicines and food, and they have recreational and aesthetic value. All that is before carbon sequestration has been mentioned. In the Millennium Ecosystem Assessment, 1,360 of the world’s top scientists showed that classical economics captured only one third of the actual value of the services that forests provide. The same is true for rivers, reefs, salt marshes, mangroves and all other natural ecosystems. We fail to factor in their actual economic value to our policies and decision making, but because most of the other services that they provide are not bought or sold in markets, they are normally not taken into account, so the forests, reefs and rivers are lost or degraded.

Another important consideration is that those wider benefits, although immensely valuable, do not accrue to an individual property owner. The benefits are experienced by a community at large. They are regarded as free goods by the wider economy and the wider community, which would no more think of paying for flood protection provided by the local forest than of paying for the air they breathe, which is also provided in part by the local forest. In classical economics, such free goods are called externalities, but because they are not directly captured by the landowner they do not feature in their decisions on how or whether to dispose of them.

[Helen Goodman (Bishop Auckland) (Lab)]

My hon. Friend is making an interesting point. During the last Parliament, we updated the legislation on commons. The previous update had been during the 14th century, so it was in some need of reform. One of the most interesting issues that arose was that there are more SSSIs on common land than on private land because on common land people were under communal pressure to farm sustainably and that such pressure did not exist on private land. There is real-life evidence to back up what my hon. Friend is saying.

[Barry Gardiner]

As always, I was delighted to sit down when my hon. Friend stood up. She made an excellent intervention and highlighted the importance of seeing land, and land use, and land use change, in a fundamentally economic way, and looking at property ownership and tenure is absolutely part of that. All hon. Members in the Chamber and those who care deeply about the subject will know of the issues relating to indigenous people. There are different forms of communal property ownership in tropical forests throughout the world. That applies not just in this country, as my hon. Friend rightly pointed out, and it is essential to bear in mind the conflict that can arise from land tenure and the different forms of property ownership when considering the future of our tropical rain forests throughout the world.

A country may experience economic growth while becoming poorer, and an example may be helpful. A Government may sell a large timber concession to a logging company. They will achieve for that land only the classical measure of value for the logs or fuel wood, plus any alternative land use. The logging company, perhaps being afraid of political instability somewhere in Africa, may not even cut the logs into timber in the country itself. Instead, it may export them to a neighbouring state where it has a production factory that cuts the logs and produces furniture for export to European markets.

It is important to note that no one in this example has done anything wrong or corrupt. The Government have increased their export sales by the value of the logs and have seen a corresponding rise in GDP. The logging company has paid the market price for its logging concession and made a rational business decision about the management of the company’s political risk. The neighbouring country happily welcomed the jobs and economic growth that come from the re-export of those logs as much more valuable furniture, but the original country is poorer. The value of the ecosystem services that it has lost is far greater than the value of economic GDP growth that it has achieved.

In 2000, Kofi Annan commissioned an assessment of the state of global ecosystems that aimed to describe and evaluate the full range of services that we as human beings derive from nature. In the Millennium Ecosystem Assessment, 1,360 scientific experts reported on the 24 key services on which human life depends. Of those, only four services were found to be increasing, 15 were assessed as being in decline and five were said to be stable although under strain in certain regions.

On the positive side of the balance sheet, agricultural production is increasing the amount of crops and livestock available to feed an expanding world population. On the negative side, marine fish stocks are dangerously depleted, fresh water is declining in quality and availability, and services such as pollination, pest control, soil stabilisation, climate regulation and air and water purification are all in marked decline.

Recognising that those essential services provide 50% of the GDP of the poorest people on our planet, the report pointed out:

“The loss of services derived from ecosystems is a significant barrier to the achievement of the Millennium Development Goals to reduce poverty, hunger and disease.”

It concluded that

“human activities have taken the planet to the edge of a massive wave of species extinctions, further threatening our own well-being.”

Just as the Millennium Ecosystem Assessment was being published in 2005, Hurricane Katrina hit the coast of Louisiana, killing 1,800 people, displacing 1 million more and causing damage assessed at up to $125 billion. The US army engineering corps is spending $16 billion on building a 350-mile long system of levees to replace those that failed in 2005. That failure was not due to a natural disaster; it was the result of 100 years of policy decisions supposedly to “improve” the navigation and economic efficiency of the lower Mississippi basin, and the consequent loss of wetlands that followed from that.

Today, the sewerage and water board of New Orleans plans to pipe thousands of tons of semi-treated sewage into a bayou to help to regrow a cypress-tupelo wetland and protect the lower ninth ward from flooding. Recently, the US army engineering corps made an astonishing admission: during Katrina, every levee that had wetland protection remained intact but every levee that had no wetland protection was breached.

It has been estimated that since the 1930s, 120,000 square miles of wetland habitat has been lost on the lower Mississippi basin. Currently, one acre—the size of a football pitch—is lost every 48 minutes. The wetlands are of various types, but a freshwater or intermediate marsh wetland is estimated to reduce surge swells during a hurricane by as much as 1 foot for every mile width of wetland. A cypress swamp wetland is estimated to reduce storm surges by an incredible 6 feet for every mile width of wetland. The ring of concrete and steel that is being constructed around the city at such enormous cost—$16 billion—sets in context the true value of the natural capital that makes up Louisiana’s lost wetlands.

In 1956, the US Congress gave approval for the construction of the Mississippi river-gulf outlet—MRGO, as it is known locally. The economic case seemed overwhelming. The man-made navigational channel would connect the gulf of Mexico to the city of New Orleans, bisecting the marshes of lower St Bernard parish and the shallow waters of the Chandeleur sound. That would reduce the passage by 40 miles and straighten the route, making it a safer and more efficient passage for shipping than the Mississippi river below New Orleans with its winding channels.

The habitats that the MRGO was cut through are shallow estuarine waters and sub-delta marshes. Much wetland was lost by the original excavation, but more importantly, the soil erosion and rise in salinity have led to the destruction of the cypress swamp. Ironically, the MRGO has not been the economic success that Congress supposed it would be. Today, it carries a mere 3% of the region’s waterborne freight, with fewer than five passages a day. The US army engineering corps estimates dredging costs to be $22.1 million per year. That means that every vessel that passes through will cost $12,657 per vessel per day.

As early as 1958 the US Department of the Interior warned that

“the excavation of the (MRGO) could result in major ecological change with widespread and severe ecological consequences.”

Ecological consequences—the process was not seen as a contribution to the economic debate surrounding the case for the MRGO, but rather as an unimportant, if factual, environmental comment. In those days, the concepts of natural capital and ecosystem services were simply not understood by legislators, but today we have no excuse.

What would a Government who incorporated the valuation of natural capital and ecosystem services into their framework of national accounting look like? What would they do differently? Principally, they would make explicit and visible the estimated value of nature’s multiple and complex benefits. By incorporating that value into their procedures of decision making and cost-benefit analysis, the Government would provide a more complete evidence base through which to improve outcomes. Factors previously regarded as externalities would become essential elements of increased efficiency in policy design.

It is important to understand that the values of natural capital do not exist objectively and independently of a community of potential beneficiaries. Therefore, they cannot simply be imported into a set of national accounts as a constant given. However, that is equally true of other forms of capital and it should not be allowed as an argument against a proper valuation of ecosystem services. The kickback given by Finance Departments and Treasuries is always, “It is very difficult to estimate the value of a river or a forest.” Well, it is difficult to estimate the value of a bridge. Nobody would try to measure a bridge by its height or length, but instead by the economic savings in time and fuel multiplied by the number of people who might use it as opposed to the alternative easiest route. One must estimate. It is the same with forests, wetlands, swamps and peat bogs, but the Treasury will always kick back and say, “No, it is too difficult.” That is the area we have to look at.

In the same way, the value of a coral reef will vary, not only in accordance with the quantity of marine life that it spawns, but with the level of dependence that a community may have on it for food. It may also fluctuate in value in accordance with its suitability for use as a tourist destination generating recreational dollars. Thus, the value of natural capital in one part of the globe cannot easily be translated across borders. Economic values are not a property of ecosystems; they are a measure of those ecosystems’ utility to human communities in a given geographical and socio-economic context. For that reason, Governments who take natural capital seriously would do well to estimate the value not of the ecosystem as such, but of the economic effects that a proposed or envisaged change might have were a particular policy to be pursued.

The successful integration of the value of natural capital into UK Government accounts could see the elimination of perverse subsidies in fishing and agriculture and in the use of nitrates and fossil fuels. It could create financial incentives to encourage proper environmental management that preserves ecosystem services and a rigid application of the “polluter pays” principle throughout industry. To achieve that, a number of undertakings would be required from the Government, and, in that respect, I thank the Minister for the positive and constructive meeting that we had with GLOBE the other day. As he knows, I do not lay these issues simply at the door of his Department; the key point is that these undertakings must be given by Governments, rather than Environment Departments. Environment Departments know and understand them very well; the difficulty is getting them appropriated by Government colleagues more widely.

First, inventories should be required of all Departments. They should identify as far as possible all the natural capital assets for which a Department is responsible or whose value may be affected, whether adversely or positively, by departmental activity. Secondly, in adopting the latest methodology set out in SEEA—the “Handbook of National Accounting: Integrated Environmental and Economic Accounting”—Departments should be obliged to co-ordinate with the Treasury and agree a valuation for all the natural capital assets in their inventory.

Thirdly, all policy proposals and recommendations should be obliged to incorporate a costed explanation of how they will enhance natural capital or transform it into other forms of capital so that overall national wealth is increased. Fourthly, where a policy proposal or recommendation is estimated to deplete natural capital or result in declining ecosystem services, that depletion must be clearly costed and agreed by the Treasury.

Fifthly, an equivalent post to that of the Chief Secretary to the Treasury must be established with the aim of regulating the Government’s use of natural resources and signing off all allocations of natural capital. Sixthly, that post should have the further challenge function of questioning why Departments are pursuing a technological solution to a problem that might be more efficiently dealt with through an imaginative use of ecosystem services. For example, why build a chemical-based sewage filtration plant when the lugworms on one hectare of mud flats can provide a remediation service for 100,000 people’s effluent?

Seventhly, the Treasury should prepare a set of green accounts for natural capital and ecosystem services, which should be published initially for three years in parallel with the Red Book. Eighthly, after the initial trial period, those green accounts should be fully integrated and incorporated into the Budget and the Red Book.

Ninthly, the National Audit Office should be requested to monitor and report on the effective application of the incorporation of natural capital into the national accounting framework. Tenthly, Parliament’s Environmental Audit Committee should be requested to hold the Treasury and all Departments across the Government to account for their use of natural capital and ecosystem services. Eleventhly, the Treasury should be tasked with preparing and publishing an annual report on the status of the country’s natural capital and ecosystems.

Are there better ways to achieve this objective? Are there better uses for these resources? The Government have an obligation to their citizens to ensure that no policy, programme or project is adopted without Ministers first having the answer to those questions, and it is not possible to answer them unless the Government unequivocally embrace a transparent system for the valuation of natural capital.

In October 2010, I will chair the GLOBE legislators session at the United Nations convention on biodiversity in Nagoya—the conference of the parties. One hundred legislators will press to have natural capital incorporated into national accounts. They will establish legislators’ role as that of providing a vital monitor and audit function, overseeing their respective Executives. Many scientists regard success at the Nagoya convention as even more important than success at the convention on climate change. After all, what would a change in climate matter if species could keep pace with the rate of change? The fact that they cannot, and the demise of the ecosystem services that are lost with them, is the greatest threat to human well-being on this planet.

A decade ago, the United Nations set the world the target of reducing the rate of species loss by 2010—the international year of biodiversity. Well, here we are. The UN willed the objective but not the means. The integration of the valuation of natural capital into Government accounting frameworks is that means.