Climate Change Bill [HL]

I was going to intervene later on a related matter, but it has come up now. I should like to make a couple of points because I think we are talking at cross purposes. The reason for the confusion is that there is no fiscal delivery mechanism in the Bill, which I shall discuss in an amendment that we will consider at a later date. To get to 20 per cent, 40 per cent, 60 per cent, or whatever, there will have to be a painful fiscal tax—or whatever we call it—delivery mechanism. We have to find, at some stage, a way of getting a price tag into the Bill and some broad-brush ideas. There is no point in having so-called dramatic carbon budgets for the year two thousand and something or other if we have no idea about the fiscal side of the equation. If people say that we cannot be very precise about that, we are being jolly precise about the other side of the balance sheet. This must involve either tax increases—balanced with some other reductions, but with a net increase of tax in this field and maybe with some degree of hypothecation—or the allocation or purchase of tradable permits or subsidies of one sort or another. That is how the whole thing will work. These are at the heart of the action that will be very painful for many people. I do not see how this part of the Bill can accommodate the point that the noble Earl wishes to impart. It is a very important question, but first we must see what the price tag will be. That will be reflected in the world price of carbon, whether there is a European carbon tax, what happens to European emissions trading, and all of the rest of it. That cannot be the job of the Committee on Climate Change either; we have got to leave it for now. It is a Treasury matter and the central fiscal responsibility will be for the finance Minister at the Treasury. Hence the separate mechanism that I will propose a week on Monday in Amendment No. 182B. I will explain to why I am not proposing an amendment here. The central fiscal problem will arise from the fact we have a double bind with carbon. Increasingly, we have reports about shortage of reserves and exploration problems. That drives up prices on the normal supply-and-demand basis and there is very low elasticity of demand for carbon; hence home heating. You cannot suddenly turn it off without freezing to death and you cannot suddenly and easily halve overnight your car journeys. The tax increases of 50 per cent or so cannot be stealth taxes. They have to be explained to the public and we have to start now to explain them and their order of magnitude. The trouble otherwise will be that people will say, ““You agreed on this Bill but you did not tell us what it really meant. It was a false prospectus. You didn’t tell us anything about the taxation consequences—doubling the price of heating oil and so on””. That is why politicians are often accused of duplicity—unless we believe that what I am saying is absolutely wrong. Well, if it is wrong, let somebody say so. If noble Lords suspect that it is correct, we had better start to get our act together. People have talked about a new politics; well, goodness gracious, the real change in politics—this is new—is that we have got to produce tax and expenditure projections over 20 or 40 years to go along with the so-called carbon budget. The word ““budget”” normally—if I may be pedantic and semantic for a moment, as other noble Lords have tended to be—is, in a sense, a weasel word. It tends to imply that we know something about finance when actually we do not. That is just a taster of what I think has to be in the Bill, but it cannot be in this part of the Bill.