Climate Change Bill [HL]

My Lords, I thought that the Liberal Democrat question was about taking the clause out altogether. This is Report stage; it is not Committee stage. I probably cannot answer the noble Lord’s question because unexpected events are unexpected events. The Committee on Climate Change will be a can-do committee and we are a can-do, open, transparent Government. As soon as there is a need to make a move, it will be announced. Scrutiny, clarity and transparency are crucial to this Bill, but I cannot begin to think on the unexpected. As the noble Earl said, this amendment was tabled in Committee. I am happy to repeat part of my explanation on why 1 per cent was suitable to be borrowed from a future budget. It is true that the banking provisions reward good behaviour by providing an incentive to overachieve against the carbon budget and the borrowing provisions allow the Government, in strictly limited circumstances, to borrow a small amount from the next budget. As I explained in Committee, the 1 per cent figure is not a number plucked from thin air. It simply reflects the likely situation when there is an unexpected shock or an event towards the end of a budget period. It may be that, with the ebbs and flows of a budget period over five years, there is nothing in the bank. But if it is towards the end of the budget period and would lead to the risk that the budget was being missed, obviously that would be a good opportunity. The 1 per cent was chosen because analysis suggested that allowing up to 1 per cent of a future budget would be consistent with the rise in emissions that may result from an unexpectedly cold winter or uncertainty surrounding emission data. It is based on evidence which shows that since 1990 there have been large emission rises due to three unexpectedly cold winters over the period, the coldest of which led to emissions being in the order of 3 to 4 per cent higher than the preceding year. This effectively means that if 0.8 per cent of the subsequent budget was borrowed—that is, 4 per cent divided by the five years of the budget period—the shock could be absorbed with a 1 per cent limit on borrowing, and the budget would still be met. This would not be the case if the limit was set at 0.5 per cent. The 1 per cent borrowing limit is based on looking at what has happened since 1990, which is a fair time to go back. In the period, three winters were much colder than in the preceding years, and that gave us emission rises of between 3 and 4 per cent. The overall figure was not higher, but the range showed that a 1 per cent borrowing would mean that consistently we would be able to cope with it. The noble Earl, Lord Cathcart, asked me some questions going back to Amendment No. 16 which I did not really understand. I shall take advice and, if need be, I shall write to him because I do not have anything I can use to answer him now.