Natural Capital (England and Wales)

Joan Walley Excerpts

Monday 21st October 2013 Commons Chamber

[Joan Walley (Stoke-on-Trent North) (Lab)]

It is absolutely right for Parliament to be debating the first annual state of natural capital report, and for the chair of the all-party group for GLOBE UK, the hon. Member for Beverley and Holderness (Mr Stuart), to be leading the debate in Parliament. GLOBE has shown true leadership, both in the UK and internationally, in getting natural capital on to the agenda, and it is vital that the Government now take a lead. I congratulate the hon. Gentleman on securing this welcome debate. Given the way parliamentarians work, it is important that our constituents have an opportunity to have their voice, on how they protect nature, represented here in Parliament. For all those reasons, I value this debate.

As the right hon. Member for Meriden (Mrs Spelman) pointed out, there is a conundrum. The natural capital committee’s work is a centrepiece of the natural environment White Paper. The extent to which the NCC informs policy is a key test of the White Paper’s ability to truly achieve the step change in how we value nature as a society. As Chair of the Environmental Audit Committee, a key issue for me is whether the Treasury is central to that process. I believe that it should be. The right hon. Lady set out how the NCC was established in May 2012 as an independent advisory body to Government, reporting to the economic affairs committee of the Cabinet Office, which is chaired by the Chancellor. In an ideal world, a Treasury Minister would be sitting side by side with the Department for Environment, Food and Rural Affairs Minister to answer the debate, because this is a cross-cutting issue. We are intent on drawing to the Government’s attention that it is no good DEFRA having ownership of the agenda; it has to be reflected in each and every Department of Government. This is one challenge that Parliament faces.

[Caroline Lucas]

I completely agree with the direction in which the hon. Lady is going, but does she agree that one of the NCC’s crucial recommendations is the need for changes to the Treasury’s perhaps ironically named green book to allow decisions to take into account natural capital, even where robust valuations are not likely to be available? Does she agree that that is crucial? Unless the green book is amended in that way, with exactly the kind of integration she is talking about, economic and environmental concerns simply will not happen.

[Joan Walley]

As always, the hon. Lady anticipates what I am about to say. This has been a long-standing matter of concern both to myself and to the Environmental Audit Committee, which I chair. It is vital that the mechanism for integrating natural capital values into policy in the UK is reflected in the green book. I understand, as far as the green book is concerned, that a review is currently in progress.

[Mr Graham Stuart]

The hon. Lady is absolutely right to mention the lack of representation on the Treasury Bench by a Minister from the Treasury. My right hon. Friend the Member for Meriden (Mrs Spelman) identified correctly the importance of having the Chancellor at the head of this process, so it is essential that we have a Treasury Minister on the Front Bench, too.

[Joan Walley]

There is agreement on this on all sides of the House. If policy decisions from the Treasury lock us in to investment for many years to come, we will be prevented from including the true value of natural capital in how those decisions are reached. Parliament has to find a way of having shared responsibility reflected in the Chamber. I hope the commitment, which I am sure we will hear from the Minister when he comes to reply, will be reflected in the Treasury, and that the Secretary of State for Environment, Food and Rural Affairs understands that the debate is about the economy not just in rural areas, but in each and every part of regeneration policy.

[Neil Carmichael (Stroud) (Con)]

I am a member of the Environmental Audit Committee, of which the hon. Lady is the Chair. Does she agree on the importance of incorporating this discussion in the debate on green finance, on which we will be doing a report shortly? Does she also agree that it is pivotal that we link up with the Treasury, DEFRA and all other Departments, because this needs to be a joined-up process?

[Joan Walley]

I absolutely agree. Certainly on green finance, this needs to be embedded at the heart of not just the Treasury, but the Department for Business, Innovation and Skills. When the right hon. Member for Meriden, who was instrumental in setting up the NCC, gave evidence before our Committee, she absolutely understood the importance of the Treasury and Cabinet Office taking on this agenda. I do not know how closely she is watching how the Government are following through on her work, but it is vital that the Minister picks up those responsibilities, which were put on the drawing board when the NCC was established, and follows up on all of this.

The green book, which is under review, provides a good starting point for the cost-benefit analysis, but it does not include natural capital within its cost-benefit guidance, and it is important that capital stocks, including natural capital, be included in the review as potential constraints alongside the social cost-benefit analysis. What discussions has the Minister had with the Treasury on that? I know that the Woodland Trust, in particular, shares our view.

The NCC contains many recommendations. As GLOBE said, one of the key questions is: what should the Government be doing? I would like them to commit to incorporating the value of natural capital in international accounting and policy-making processes by 2020 at the very latest. Will the Minister comment? In that regard, the work of the Office for National Statistics is critical, and certainly my Select Committee will be taking evidence on that and looking to see what progress is being made.

It is not just about what we do nationally, however; it is about what happens internationally, as we heard just now. The Government need to take up the NCC’s report at the international level. I think of the work on the sustainable development goals, which, as we heard from the hon. Member for Beverley and Holderness, followed the Rio+20 conference in Brazil last summer. Securing appropriate recognition of natural capital accounting within the United Nations is important. As we have heard, so far the post-2015 high-level panel has emphasised the importance of the sustainable management of natural resource assets with regard to poverty eradication. It is important, however, that the Government go one step further. As the Government take the sustainable development goals further, will the Minister ensure that all capital accounting, including of the natural environment, is addressed as a specific goal?

Progress at the UN can be made only if we make corresponding progress nationally, and here I wish to flag up the role of business, because this is not just about what the Government do; as many Members have said, it is about what business does as well, and many businesses accept that the global economy is entering a new era.

The Prince’s Charities “Accounting for Sustainability” report was prepared in the run-up to the Rio conference and made a positive impact on the discussions that took place there the summer before last. In it, His Royal Highness the Prince of Wales said:

“There was a time when we could say that there was either a complete lack of knowledge, or at least room for doubt, about the consequences for our planet of our actions. That time has gone. We now know all too clearly what we are actually doing and that we need to do something about it urgently. Better accounting must be part of that process.”

In that report, and in the report that we are debating this evening, the business case is made for the integration of environmental and social information. Chief finance officers across industry are recognising that ethical breaches can collapse a company in no time. Work already under way by leading companies is reinforcing the natural capital committee’s recommendation for more work with leading companies’ accounting bodies, landowners and managers to develop and test guidance on best practice in corporate natural accounting. Will the Minister tell us how the Department for Business, Innovation and Skills is dealing with those issues?

From the perspective of the Environmental Audit Committee, given our current inquiry into fossil fuel subsidies, it is pertinent that the Government should pay particular attention to the NCC’s recommendation for a review of the extent to which natural capital is being effectively priced and, in particular, for an examination of the scope for reducing perverse subsidies. What dialogue is the Minister having with the Department of Energy and Climate Change on that issue?

The ways in which the Government take up the initial recommendations will depend entirely on the pressure that exists at local level. Whatever the Government do will go further if there is support for their actions locally. I commend a recent report from the Royal Society for the Protection of Birds that was launched here in Parliament last week. It sought to find out how connected to nature the children of the UK were, in an innovative three-year research project to establish a clear definition of connection to nature and, more importantly, a method for measuring it. The research highlights a wide range of benefits for children, society and the environment.

We all accept that nature is in trouble. Indeed, we had a debate in Westminster Hall last week on wildlife crime. The hon. Member for Richmond Park (Zac Goldsmith) pointed out that the more we understand about wildlife, the better we can value and protect it. So it matters a great deal if we, as a nation, do not understand how much trouble nature is in. With 60% of our species in decline, the protection of wildlife must begin at home, in our childhood. The research study examined a representative sample of young people. In it, the desirable score relating to being in touch with nature was 1.5, but that score was achieved by only 21% of children. There were big differences between boys and girls, between different parts of the country and, in particular, between urban and rural areas.

I happen to think that this matter needs to be addressed by the Government. We urgently need to amend our education legislation to make the teaching of sustainable development a duty. Many people agree with me on that, including educationists and practitioners who run field centres. The national curriculum can no longer overlook an understanding of the natural world. If the Government were to take on board that sentiment, it would chime with the direction of travel of the natural capital committee’s recommendations, and I ask the Minister to consider this possibility and to take up the matter with Ministers in the Department for Education.

Finally, there is a need for a long-term policy framework that supports and incentivises organisations, including financial institutions, to value and report on natural capital. Arguably, however, the committee’s report is a statement of intent rather than a clearly defined route map. At this stage, it is much more about generalities and intentions than about clear recommendations. As the committee moves on from its first report, it needs to be much more direct and much more forward, and it needs to build on its clear set of principles by making specific recommendations—advice on offsetting, for example.

When the Government come to review the natural capital committee in 2014, I hope that they will take some of those issues on board. The natural environment White Paper sets out an ambitious vision for nature and our natural capital assets. Genuinely embedding the value of natural capital into the fabric of economic decision-making is crucial to achieving that vision. The Government must now build on the work of the natural capital committee.

[Roger Williams (Brecon and Radnorshire) (LD)]

I, too, congratulate my hon. Friend the Member for Beverley and Holderness (Mr Stuart) on securing this evening’s debate. I thank the right hon. Member for Meriden (Mrs Spelman) for speaking so knowledgeably about this issue; she was responsible for seeing much of what we are discussing tonight come to fruition.

The coalition agreement stated:

“The Government believes that we need to protect the environment for future generations, make our economy more environmentally sustainable, and improve our quality of life and well-being.”

Following on from that, the Government published the White Paper, “The Natural Choice: securing the value of nature”, a recommendation from which led to the setting up of the natural capital committee to provide independent advice to the Government on these important matters.

It was done against the background of a previous century in which the world population had increased by 50%; there was a fortyfold increase in industrial output; and an increase of 16 times in the amount of energy used, greatly increasing emissions from sulphur and carbon. The natural capital was obviously put at risk by such a great increase in activity, and no policies were in place to ensure that it could be sustained and maintained.

Let me draw a comparison between us getting to grips with the concept of natural capital now and what happened at the first Rio conference when the issue of sustainability was first put forward. It was difficult at that time to get people to understand what was really meant by that concept, and I think we are still wrestling a little with it at the moment. Sometimes the interpretation of sustainability is used to promote a particular argument or project that we might wish to advance.

I was in a little chapel in Bryn Pont in Pontfaen in my constituency last night, where the Breconshire young farmers were having their harvest festival. They took the service themselves, being wonderfully able people. As I listened, I was thinking that, because of their role in land management and land ownership, they will be the people on whom much of this responsibility will fall. I wondered how they would grasp this concept of natural capital.

I am sure that the people in the committee who wrote the report are very able and that they followed fully the academic rigour and, indeed, the financial accuracy necessary for such reports. However, I think that the committee has a little way to go when it comes to explaining the subject to other people. It will be advising the Government on policy, but unless people understand and can align themselves with that policy, it will be extraordinarily difficult for them to deal with it. For example, the report offers the following:

“Definition of natural capital asset: Define the component of natural capital under consideration, the temporal and spatial scales being considered and the relationship between the natural capital asset and the services it provides, directly or in conjunction with other assets”.

I am not sure how that can be translated into user-friendly language. What I am sure of is that a great deal of work will be required to enable people to associate themselves with the project.

We have been given an example of the way in which natural capital can be used to assess the effect of a particular development, and then to offset it by replicating an environment or ecosystem that may have been damaged by that development. I think that the concept has a great deal to offer. I know that the Secretary of State for Environment, Food and Rural Affairs is particularly interested in using offsetting to allow economic development to take place in areas where it has been problematic in the past, and I attended a debate in Westminster Hall during which the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles)—who is responsible for planning—spoke about developments in national parks and how they could be facilitated. However, I think that we must approach the process with considerable caution, because it is sometimes almost impossible to replicate ecosystems that have been damaged by development. It may work in some instances, but in others the environment will be so pristine that it will be impossible to replicate it elsewhere.

Mention has been made of the value of children and young people who have experience of the countryside and take part in activities there. On Saturday night I attended the first showing in Wales of a film called “Project Wild Thing”, which explained how we could encourage young people and give them opportunities to make the most of their experience in the countryside. There is also a National Trust programme entitled “50 things to do before you are 11¾”. I shall be sending a copy to my grandson, who has already undertaken one or two of the recommended activities. If we ensure that our natural capital can be maintained, it will greatly benefit the development and health of our children.

[Joan Walley]

Does the hon. Gentleman agree that it is important for all Members to do their utmost to arrange screenings of “Project Wild Thing”, which was launched by the Royal Society for the Protection of Birds in the House of Commons last week?

[Roger Williams]

I certainly do. It is a very inspiring film. People will interpret it in many different ways, but I am sure that every way in which it is interpreted, and implemented, will enable children to benefit from it.

I think that the development of the concept of natural capital will be of considerable use to the Government when they are setting policy. However, one Member said that while it was some use if implemented nationally, it would be of greater use if implemented internationally.

Some 12 of the 13 recommendations in the Committee’s first report are process recommendations—they are about the way this should be approached—but the 13th recommendation is about agriculture. It recommends that the common agricultural policy should be radically reformed and that as much of the pillar 1 money as possible should be moved to pillar 2. I think that many of us would agree with that, but it depends on what the pillar 2 projects are. Also, it would be entirely inappropriate for policies to be implemented in this country while we have a single market that would put our farmers at a disadvantage to those on the continent.

There is a graph in the report showing the wheat yields in this country. They have increased from about 1 tonne an acre to about 3 tonnes or more. Sadly, however— and chillingly in some respects—there have been reductions in wheat yields in this country in the last two years. For those two years we will be net importers of wheat, whereas we have been a wheat exporter in the past.

We talk about farmers delivering public services. I think the greatest service the farming community can deliver is a sustainable supply of food at an affordable price. There is therefore a balance to be struck between food being produced by farming and the protection of the environment.

This concept will be very useful and very informative for the Government in delivering their policies, but we need to show that the public understand the concept as well, and are able to engage with it.

--- Later in debate ---

[Mr Graham Stuart]

Thank you, as ever, for your strictures, Mr Speaker.

It has been a great pleasure to take part in the debate. We have heard high-quality speeches from hon. Members on both sides of the House. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) followed my speech and showed a strong understanding of the key issues. My right hon. Friend the Member for Meriden (Mrs Spelman), in so many ways the architect of the current situation, spoke of offsetting and of the economic importance of humble bees and pollinators. The hon. Member for Stoke-on-Trent North (Joan Walley) mentioned the green book—the Minister did not mention that, but perhaps we will hear more from him about it in due course—and the role of natural capital in the sustainable development goals. She also referred to other Departments and asked whether the Minister is in touch with them.

My hon. Friend the Member for Brecon and Radnorshire (Roger Williams) put his finger on one of the most important challenges that we face. For the most part, we are a group of the usual suspects, talking about natural capital late at night. In the Tea Room earlier, a colleague said, “In eight years in this place, I have never looked at the title of the debate and not known what it was about—until now. Well done, Graham, you’ve got a debate I don’t understand.” My hon. Friend correctly identified the importance not only of the Breconshire young farmers, but of communicating properly with them so they understand what on earth we are talking about. If we do not achieve that, in a few years, the same group of usual suspects will be discussing the topic without wider resonance.

[Joan Walley]

Does the hon. Gentleman agree that that is one reason why there should be a measure to include the subject in education legislation?

[Mr Stuart]

I feared the hon. Lady would try to nail me personally on that—I spend my time chairing the Select Committee on Education resisting the forcible addition of financial education and a plethora of other subjects into the national curriculum—but I will bear her remarks in mind and see whether I can reconsider my almost-ideological response.

My hon. Friend the Member for Richmond Park (Zac Goldsmith) made a powerful speech. He said that reconciling the market with the environment is essential to our survival—one of a few memorable quotes from the debate. He also asked whether the Government as a whole are ready for the challenge, which neatly summed up a question included in many speeches.

My right hon. Friend the Member for Hazel Grove (Sir Andrew Stunell), using his experience of Government machinery, focused laser-like on questioning whether the machinery is in place to ensure that natural capital debates are not a minority sport that take place late at night in the Chamber, and that they begin to influence Government policy in all Departments.

Because of my history with the hon. Member for Brent North (Barry Gardiner), it hurts me to say that he made a barnstorming and powerful speech. He spoke of not only halting but reversing environmental loss. He spoke with both passion and knowledge and managed to convey them succinctly and effectively. He said that people in the Treasury could be reasonable as long as we speak to them in their language. He gave us two quotes. First, he said that we use nature because it is valuable, but abuse it because it is free, which goes to the heart of the debate. Secondly, in defence of that approach, he said that promoting the concept of natural capital was not to commoditise nature, but to ensure its protection.

We heard an excellent speech from the Minister, who, as he said, has been interested in natural capital for a long time—he was at the launch of the White Paper a few years ago. He and the other Ministers in his Department have a great challenge, but there is a wider challenge across the Government. That is the central issue. My hon. Friend the Member for Richmond Park made the point that, in future, we need Treasury Ministers and colleagues who do not habitually focus on this policy on the Treasury Bench in such debates. I am delighted to see my hon. Friend the Minister of State, Cabinet Office, the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd), who is the Minister for civil society there as he, too, has long taken an interest in natural capital.

With that, I draw the debate to a close.

Question put and agreed to.

Resolved,

That this House welcomes the Natural Capital Committee’s first annual State of Natural Capital report; and urges the Government to adopt the report’s recommendations and to take concerted action to embed the value of natural capital in the national accounts and policy-making processes as early as possible.