Climate Change Act 2008 (2020 Target, Credit Limit and Definitions) Order 2009

My Lords, no, no—everyone knows that that is a good mark for some of us to give to the Government. Both my noble friends on the Front Bench will be highly gratified by what I have just said. Let me mention one or two areas in which they could go further. When I contributed to the debate answered by my noble friend Lord Rooker on 18 March last year, and I said that there ought to be a fiscal impact statement, side by side with the Budget, my noble friend said that he would take that suggestion away. That is one reason—I am sure not the main reason—why these orders appear in this form. Certainly, there is the linking with the Budget. It is the first time that we have £ million, or £ billion, numbers to look at. The noble Lord, Lord Lawson, pointed out that we have a total of £800 billion on the second page of Chapter 7 on building a low-carbon economy. We have a figure for investment of £50 billion: ""Tackling climate change requires substantial levels of investment across all sectors of the economy. The Government’s policy framework is enabling £50 billion of investment over the period of the Comprehensive Spending Review (2008-11)"." That is quite a large figure—there are a few peanuts there, even these days. Other big numbers there are for energy efficiency, renewables support and so on. The biggest number of all is public transport and low-carbon and electric vehicles. That may have a bearing on the next main remark I want to make. In the first set of announcements in Chapter 7, we see that the fuel duty is going up by 2p a litre from 1 September this year, and another penny on top of that in each of the next three years—that is 2010, 2011, 2012 to 2013. Two and three make five these days, but there it goes. I guess that that will have some income-distributional effects. Of course, the great danger of the macro-Stern approach is to say, "There’s no problem, we’re all wealthy, but who’s wealthy and who’s at the bottom of the receiving end?" If it was a poll-tax-on-wheels, or a poll-tax principle, within a nation in the OECD, and north/south in the world, one would be shouting from the housetops that this is not way to get public support for a consensus policy. Therefore, I request my noble friend to commit to track the income-distributional consequences of the measure. I said on 18 March last year that I thought this was a shadow hypothecation. I know that that word is like a red rag to a bull to anyone with a Treasury background. However, the world has moved on and we are in a quasi-hypothecating relationship as regards these figures. They are not normal budget figures but are linked inexorably to a set of targets, which means that we can track them for a good period. If you are going to hypothecate, you can implicitly look at the impact of fuel duty, or installing solar panels on roofs, but as regards the £50 billion and, indeed, the £800 billion, it is very necessary to be wise before the event as there could be a public revolt against all this, even if its merits are confirmed beyond peradventure, if "it’s the poor what gets the blame". That means no more cheap holidays on the Costa Brava or bangers on the road, but if the people with money—I am drawing on caricatures—can pay for more expensive holidays and cars, that is fine. But if we are going to have to cut emissions by 40 per cent or 60 per cent, guess who will be doing the cutting? I think this is the biggest strategic political question we have to face over the next 40 years but we have heard not a word about it—not a word. As far as I am concerned, this is the intellectual hole in the doughnut. This situation arises partly because there is a tug of war between the Treasury and all the other interested Whitehall departments, certainly the Department of Energy and Climate Change. My noble friend Lord Rooker told us not to ask the Treasury to do something about the studies that I was advocating as it is a matter for the Department of Energy and Climate Change. However, when you approach the Department of Energy and Climate Change, it says that it is a matter for the Treasury. Which is it? Frankly, this is a much longer term question than anything to do with party politics. Therefore, I hope that no one will make short-term political points about it. Who are the winners and who are the losers? What is the macro and micro fiscal impact? The Stern report ought to be revisited. The analysis is variable but, apart from some first-class chapters, a lot of it is perfunctory and has not been debated adequately in this House. Stern’s hypothesis is implicitly as plain as a pikestaff—I should like to know whether the noble Lord would challenge it if he were present—which is that we have to choke off carbon demand largely through the price mechanism, unless we are going to shut down for periods due to the collapse of the capitalist system. Minus 4 per cent growth—in other words, 4 per cent negative—will reduce the growth of carbon dioxide. That is a jolly good thing but who will be unemployed and live in poverty as a result? The Green Party and Friends of the Earth explicitly demand that we slow down the rate of economic growth. However, given our productive potential and underlying rate of growth and productivity and all other nostrums of macroeconomics that encourage us to increase our productivity—that does not mean a cut in working hours but work as hard as you can, improve technology and increase GDP so that we keep as far ahead of the Chinese as we are doing—that does not sound to me like accepting a rise in unemployment or a slowdown in economic growth. Again, we could get a lot closer to agreeing with each other if the Government were to say that they will not only track income distribution but agree a separate annual statistical series on this whole financial framework, to see how emissions trading fits into it, and so on. Although there are some very clever people around, I do not know anybody who can intellectually grasp all the double counting or interactions between all these arrangements. Finally, we have to help to demonstrate that, if all this happens, there will be financial transfers, in particular to sub-Saharan Africa, out of the many trillions that we are talking about over the period. It will be many, many trillions. However, we cannot just hand the money over via the public Exchequers to wind up in Swiss bank accounts. This, among other reasons, is why the conditionality principle—even if it is not called that—has to come back to our relations with sub-Saharan Africa, Latin America and many other parts of the world, or there will be a collapse of political support in the OECD. We need some numbers to demonstrate what will be the next financial transfer from the OECD to the G77, and then work out its distribution, both vertically and horizontally. We are at a moment of radical change in lifestyles, although not, I think, the radical change of lifestyles that people called for, somewhat rhetorically. We recognise that there will be qualitative changes in the economy, but they will not happen with confidence until we have a statistical framework, so that practical people have some bedrock of data and analysis, on which we can all agree, to explain the position around the country.