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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 1 357-i
House of COMMONS
TAKEN BEFORE the
Environment, Food and Rural Affairs Committee
NATURAL ENVIRONMENT WHITE PAPER
Wednesday 29 JUNE 2011
peter unwin, pavan sukhdev, patrick TEN brink, dr andrew clark, chris knight, martin harper and ellie robinson
Evidence heard in Public Questions 1 - 39
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Taken before the Environment, Food and Rural Affairs Committee
on Wednesday 29 June 2011
Miss Anne McIntosh (Chair)
Mrs Mary Glindon
Examination of Witnesses
Witnesses: Peter Unwin, Director General, Environment and Rural Group, Department for Environment, Food and Rural Affairs, Pavan Sukhdev, leader of The Economics of Ecosystems and Biodiversity Project, Patrick ten Brink, Institute for European Environmental Policy, Dr Andrew Clark, Head of Policy Services, National Farmers Union, Chris Knight, PricewaterhouseCoopers, Martin Harper, Royal Society for the Protection of Birds, representing Wildlife and Countryside Link, and Ellie Robinson, Assistant Director, External Affairs, National Trust, gave evidence.
Q1 Chair: Good afternoon, ladies and gentlemen. I welcome you all to our seminar on our inquiry on the Natural Environment White Paper. We are going to hear from you in groups of three. I will introduce you in turn. Each of you will speak for five minutes, and then we will have a broad discussion before we hear from the next group of witnesses. As I call each of you, perhaps you would like to give your name and position for the record. Peter Unwin, you are very welcome. Would you like to start?
Peter Unwin: Thank you, Madam Chair. I am Peter Unwin, Director General for Environment and Rural Affairs at DEFRA. We think that the Natural Environment White Paper is a major opportunity for the environment. Fundamentally, it recognises the importance of nature not just for the intrinsic reasons for which we have always cherished it but also because a healthy natural environment is essential for our future economic prosperity and security.
The paper builds on two ground-breaking studies: first, John Lawton’s report last year, "Making Space for Nature"; and, second, the recently published UK National Ecosystem Assessment. We also draw heavily on the excellent work done by Pavan Sukhdev and his TEEB report, about which you will be hearing shortly. To put it into context, it also leads into an important series of related publications across Government, including: the waste review published last month; the England Biodiversity Strategy which is to come out shortly; the draft national planning policy framework; and the Water White Paper to be published later this year.
The White Paper sets out four themes backed by 92 actions. The first is to protect and improve our natural environment. You will be familiar with the proposals to establish nature improvement areas and local nature partnerships. We will also be piloting a system of biodiversity offsets to help local authorities and developers and get better value for the environment. The White Paper recognises the crucial role played in nature by our farmers and land owners. We will be working with farming and environmental interests over the next year to ensure that we can achieve two of our goals in DEFRA of increasing food production and improving the environment.
The second theme is about our ambition to create a green economy that recognises the value of nature. That is very much part of the Government’s overall growth agenda. We want to lead the world in putting nature at the heart of our economic planning, and we will do this by including natural capital in our national accounts and establishing an independent natural capital committee to report to and advise Government. The role of business is absolutely crucial here. Ian Cheshire, chief executive of Kingfisher, will head a business-led ecosystems market taskforce, which will review opportunities for UK business in the markets in green goods and ecosystem services. Major companies like Unilever, Nestlé, Sainsbury’s, Marks & Spencer and Puma are already leading the way in going beyond carbon to take account of natural capital in their business model and accounts.
The third very important theme in the White Paper is to reconnect people and nature. We are all aware of the extent to which that disconnect has grown and the impact it is having on everything from health to education. The White Paper, for example, will remove barriers to learning outdoors and provide a new green area designation to allow people to protect spaces and areas that are really important to them in their locality.
The last of the four themes is on international leadership, building on the role that the UK Government and Secretary of State played at the Nagoya conference last year and, through that, leading to reform of the Common Agricultural Policy and the Common Fisheries Policy and looking forward to the meeting 20 years on from the big Rio conference to be held again in that city next year.
I want to finish these brief remarks by emphasising that the White Paper has been produced through a very collaborative process, working with Departments across Government, with NGOs, business, organisations like GLOBE and many individuals up and down the country. We could not have produced it without their help. A lot of the ideas in the White Paper have germinated from people round the table today. Equally, this is not an old-fashioned White Paper where Government set out what they are going to do. We will not be able to implement it without the involvement of those same organisations and individuals. We have provided the tools here for people to use, but we will have to work with people to ensure that they are used. We look forward to doing that and working with them to achieve together the ambitious goals that the White Paper has set out.
Q2 Chair: We are very grateful to you. Perhaps I may now invite Pavan Sukhdev to address us. Again, just say where you are from. Perhaps I may congratulate Pavan publicly on the medal that he is due to receive today from the Institute of Ecology and Environmental Management. Obviously, you lead in this field and we are very honoured to have you with us this afternoon.
Pavan Sukhdev: Thank you very much for your remarks. I appreciate the note of congratulations. The work of TEEB on the economics of ecosystems and biodiversity, which I led, has been very much a collaborative effort involving more than 550 scientists, economists, ecologists and environmental economists. I am delighted to acknowledge and thank DEFRA for the role they played, not just in terms of the financial contribution, which is always welcome, but also in terms of the significant commitment of time and energy of many of its officers.
The review of TEEB recommends among other things that the idea of mapping ecosystem services and attempting to place values on them should be conducted not merely as a global study or assessment but also as national studies and assessments. In that context I am delighted that the Natural Environment White Paper very much meets some of these needs. It is also important to recognise that TEEB is not a cost-benefit-based solution for global stewardship of the planet; it is very much a mature and multi-layered approach towards valuation, which can happen on a societal plane, by demonstrating value and eventually by capturing values through ecosystem service payments. Once again, I am pleased to note that all of these aspects are taken into account in the White Paper.
In particular, I am delighted by Her Majesty’s Government’s keenness to participate in WAVES, a wealth accounting and valuation of ecosystem services project organised by the World Bank. Also participating in it are countries from the developing world, such as Colombia and India. It is good that the UK will be able to contribute through DEFRA and a community of experts who have been involved in both the White Paper and the TEEB study.
I feel that the need for national accounting is paramount because that is what focuses policy and public attention on the importance and size of natural capital and the sheer value of services that are delivered to the economy and to people. Action on a smaller scale is also important. It is good that there is an acknowledgement here that valuation as a process can apply different criteria at different scales, so the same ecosystem service valued for the purpose of national accounts may have one treatment, and value for the purpose of paying for environmental services to a community or individuals can have another treatment, and that flexibility needs to be recognised and understood.
Lastly, I am also very pleased to note that the White Paper will issue new guidance for businesses by 2012 on how to measure and report corporate environmental impacts. I am reading an extract from the paper. This is particularly important, because I see the role of the corporation going forward as the most significant form of agent in the economy and as an agent of change. That is something we should not underestimate. We need to engage corporations, in this case in terms of issuing guidance for businesses.
I believe that Her Majesty’s Government should also look at involving as deeply as possible the Institute of Chartered Accountants of England and Wales, where there is already a committee, led by the chairman himself, on the need for valuing corporate externalities. I believe that Her Majesty’s Government will get significant support by involving the Institute of Chartered Accountants in England and Wales, and in other parts of the country, as their goals are congruent. It is in their interest that the impacts of corporations should be disclosed eventually in the accounts of business. Of course, it is the wish of Government that guidance to businesses should be about not just measuring and mapping their impacts but also managing them, and in order to manage them you need the information that we describe in one of the TEEB reports, "TEEB for Business".
All in all, I am delighted to welcome, and congratulate you on, the White Paper, and I wish you the very best of success over the term of this Government in implementing its many excellent recommendations.
Q3 Chair: It is not actually our White Paper. We shall be scrutinising it quite critically, but we welcome most of its contents. Perhaps I may introduce Chris Knight from PricewaterhouseCoopers-our white knight?
Chris Knight: Possibly. Green knight. Anyway, thank you very much for the opportunity to participate. We really appreciate this. I am an environmental scientist by background. I work in the sustainability and climate change team within PwC, so the comments I am about to make represent those of an organisation that is trying to embed a lot of the thinking in this White Paper already within companies in the UK and overseas. We strongly welcome the White Paper. Its language and thinking is consistent with the work we have been doing as part of TEEB, and consistent with the work we have been doing with the World Economic Forum and the World Business Council for Sustainable Development. We strongly welcome the language and thinking within the White Paper.
We work globally. A lot of my projects are overseas in countries experiencing biodiversity loss and ecosystem degradation at a much higher rate than in the UK. There are a lot of innovative activities in those countries, but if the language and thinking in this White Paper is implemented, I think it puts the UK within the dozen leading countries in the world looking at this issue. We absolutely welcome the content of the White Paper.
Just to prepare for this session, we consulted a number of companies in different sectors: the utilities within the water sector; the aggregates sector; the development sector; and also some fairly unique institutions like the Millennium Seed Bank, for example. The overall reaction from all of the people we consulted was very positive. They definitely appreciated the White Paper. Some of those people also commented that it represented a step change in thinking within the Government. There have been a lot of positive reactions to the White Paper in the private sector.
In particular, as Pavan said, the companies we spoke to welcomed the idea of guidance coming from Government on how to account for ecosystem externalities, dependencies and the kinds of things that Puma is working on. We are also pleased to see Puma’s case study within the White Paper. A lot of the companies we spoke to have said they will take part in biodiversity pilot projects as well; they would like to be involved in those, so that is really positive.
As to the four points that those companies wanted us to reflect during this session as areas for the Government to focus on, in terms of implementation of the White Paper, the first is regulation. We heard the comment from a lot of companies that there is not a huge amount of detail on national or local-level legislation to drive through some of the pledges within the White Paper. That was one area where a lot of companies were asking for more clarification, and also an understanding of the links between this paper and the forthcoming Water White Paper, to be issued later this year. They wanted more understanding of those linkages.
There was also recognition that planning policies and systems alone could not bring all of the changes pledged within the White Paper, and there was a reflection of the limitations there. I think there was a realistic view by companies that the Government had to look at a number of different options. There was also concern about funding and a lack of any mention about how this would be paid for and who would have to pay for this within the UK. That is something we can perhaps explore in this discussion. But there are also questions about how you can structure payments for conservation through endowment funds, trust funds and so on. There are some challenges especially at local authority level in terms of their budgeting horizons, which are perhaps typically two to four years. They would be looking at budgeting for investments in natural capital, yet we know that things like permeable road surfaces deliver their benefits and can perhaps last four times longer than conventional road surfaces, but they cost 50% more. Therefore, within a two to four-year budget window, a local authority will not be able to invest in a lot of these solutions.
There are two final areas. One is just the technical underpinnings: the requirement for technical training and continued investment in skills within the UK to support implementation of the White Paper. Some fantastic work is happening in universities, for example in the University of Coventry on sustainable urban drainage systems, and in the University of Kent on agri-environmental economics. A lot of work is going on within the Forestry Commission itself, but it is really a reflection on the need for continued investment in all of that.
Finally, a lot of companies were looking for clear incentives, as well for them to invest both on site in their own offices and new developments in ecosystem improvement activities, but also in terms of land management overall. There are questions about the agri-environment schemes of payments, which have had so much positive impact, and just how this would link to those. There are also questions about asset management plans for water companies and the Water White Paper. How can we make payments for ecosystem services schemes a reality for mainstream companies in the UK?
To conclude, I think there is a lot of experience in the private sector that will be valuable in implementing the White Paper. We look forward to contributing to all of that.
Q4 Chair: I am very grateful to the three of you. Perhaps we may pause there and open up comments. A lot of what at least two of you have said relates to water and the Water White Paper. I would like to place on the record that it is not definitive that the Water White Paper will be published in December. Obviously, it would be a matter of great regret if the Water White Paper was divorced too much from the publication of the Natural Environment White Paper. I am very taken by the focus, certainly at the launch and in the White Paper, on the need to give international leadership and engage more, and at an earlier stage, with the European Union. In this regard, the Water Framework Directive could have huge implications for water companies, farmers and local authorities. I do not get the impression that the Department are engaging at a sufficiently early stage. Peter, could you possibly comment on that?
I also have a query. I know that the purpose of the Public Bodies Bill is to dismantle a lot of arm’s length bodies. There seems to be quite an impressive array of taskforces and committees announced in this. Mr Knight mentioned them. I just wonder for how long these will be in place and how will they be funded. Perhaps Mr Knight and Mr Sukhdev could deal with the business of placing a value on water-I know that we will look at that in more detail-and with the economics of that, but also looking at water storage upstream. I have a project where I would welcome any water company who wished to contribute to it, but they are not stepping forward. Is it because they have not got the money to invest? Is it because the technology does not exist at this stage? Is it because it just does not stack up? Perhaps you would answer in that order, and then colleagues will step in as well.
Peter Unwin: I shall come back on those points. First, on the timing of the Water White Paper, our business plan states that December is the target for it, and we are firmly committed to that. We very much hope and expect to be publishing it in December or earlier. You are absolutely right that it will pick up a lot of the themes coming out of the Natural Environment White Paper and build on them. The current focus on the drought we have had-notwithstanding the recent heavy rain, we still face a serious situation in many parts of the country-indicates the challenge that the Water White Paper faces. It is going to be a lot about the long-term challenges we face in this country against the pressure of increased demand and climate change in ensuring we have sufficient water and that we abstract it in an environmentally sustainable way.
We are very heavily engaged in the Water Framework Directive. Only yesterday Caroline Spelman, the Secretary of State, told me that she had been talking to her colleagues at the Environment Council last week about the need to push forward the Water Framework Directive. One of the problems with water, frankly, is that the Water Framework Directive was introduced, but all the other older directives remained there, hanging on to it. Our view in a sense is that the more we can focus on the Water Framework Directive as the vehicle to drive forward our water policy, the better. That is the line we are pushing very much with Commissioner Potočnik and other member states, and we are getting quite a bit of support for that view.
On payment for ecosystem services, some of the water industry is at the forefront of this. United Utilities with their two SCaMP projects, now followed, I think, by South West Water and others, have got some schemes where they are paying farmers to reduce pollution at source. It is cheaper for them to do that than to treat the polluted water downstream. That is an excellent example of the way we can have something that leads to lower bills for water customers and enables the farmer to pollute less without having to pay a financial cost for that.
As to arm’s length bodies, in DEFRA we have reduced the number from 80 or 90-odd to 39, so we have got some credit in the bank, but we have been very careful and selective in the institutions we have set up here. The main one is the Natural Capital Committee, which is not a statutory arm’s length body but an expert committee that will advise Government. I think it is absolutely crucial to get that advice into the Treasury in particular, because it will advise the Economic Affairs Committee chaired by the Chancellor. But we have stated clearly that we will review it at the end of this Parliament, so it is timely in that sense. It will be for the Government to decide before and after the next election whether and how that committee should continue. The Ecosystems Services Task Force run by Ian Cheshire has been set up with the specific task to come up with ways that business can get more involved in payments for ecosystem services, and I think that is due to report and finish its task by 2013. We have been very careful in setting those up, mindful of the policy on arm’s length bodies to ensure that we do not create more of what might be called quangos.
Pavan Sukhdev: My comments would be of a general nature, rather than particular to Britain, but I hope some of them may be of relevance here. It is generally the case that the supply side of fresh water is not sufficiently reflected in studies on ecosystem services, and the role of ecosystems to provide water regulation is generally not widely reflected in policy dialogue. Having said that, I am sure that in the UK this understanding is here. I would imagine that the need to manage protected areas and their role in absorbing and recycling fresh water, and the need to manage the agricultural communities’ and farmlands’ inputs to fresh water management-both on the quantity and quality side-will be recognised and built into your Water White Paper; the same goes for the risks and uncertainties associated with the onset of climate change effects and the manner in which that increases the need for focus on ecosystems-perhaps an even greater focus because of the higher risks as we move into the next few decades. I think these are issues that need to be reflected in any White Paper on water. I very much hope that yours will do so.
My last point is about the value of ecosystem services. Apart from carbon storage, it is generally found that the value of fresh water regulation function is among the highest, so it is worth recognising that some of the work that has been done by the ecosystem assessments and reflected in the White Paper will be of value to whoever is preparing the Water White Paper.
Chris Knight: The sense we have from speaking to water companies in particular about their involvement in payment for ecosystem service schemes and payment for environmental services schemes-I can think of other water companies that have been involved in those-is that they tend to be driven partly from a desire to manage biodiversity impacts and partly by people who specialise in biodiversity and ecology. Our sense is that they are not generally implemented through a desire to improve capex and investment planning, and they do not come from the heart of those companies. I think that if the Water White Paper can provide more guidance to help water companies and others look at investing in ecosystems from the perspective of return on investment-as the TEEB report and other studies have shown, it makes sense to invest purely on an economic basis in ecosystem services, rather than technological fixes in some circumstances-that would be very useful for the water industry.
Q5 Neil Parish: I have several questions. I think it would be a very good idea to value everything, but in the end how do you value food production and the need for food production, especially in view of climate change and the scale of food production that this country needs? I would like to know where the balance is. To what extent do you take permanent grassland and its environmental benefit into consideration? How does that link into the value of tourism? Sometimes these are rather competing interests, especially when you are trying to conserve an area.
My other questions are quite different in a way. At the moment we are short of water and are worried about drought, but there are times when we have floods. There are parts of the country-for instance, Somerset-where you could store water to prevent towns flooding. The trouble is that at the moment most farmers are just compensated for income forgone, rather than being compensated in a positive way, because the value of storing that water, rather than letting towns like Taunton and Bridgwater flood, could be quite considerable. Are you addressing those things as well? I am just interested in the practicalities of all this. It sounds all very lovely, but I am just wondering whether in the end, in American terms, it will amount to a hill of beans.
Pavan Sukhdev: You will find it curious that the TEEB study does address fresh water storage and the need to look at land management projects, but very much in the developing world, because that is where the crying need for flood management is. Having said that, countries like Switzerland and the UK, which are very far from the developing world, are experiencing that. Although the science is always uncertain, that appears to be due partly to the nature of climate change.
What we need, perhaps, is for some of the techniques reflected in TEEB to be applied to the context here, and to look at reforestation, afforestation, the sequestering of grassland and other such activities as providing an additional value in the form of reduced risk of flood damage. Having said that, there is an opportunity lost, especially in grasslands, which potentially is a large agricultural output, and that could only increase. This is a dynamic situation where today’s output may not be a good reflection of what you can achieve in a particular area from an agricultural point of view.
You really have to look into the future, as it were, and recognise that there are uncertainties. Some of these are positive in terms of agricultural output. There are bigger uncertainties, some quite negative, in terms of further damage, and mitigation of that flood damage is part of the need for upstream management. It is really there. Unfortunately, there is not that much. In Germany there is a fair amount of River Elbe and River Rhine-related upstream management studies, so there are at least some developed country studies of this. I guess one would need to pull together whatever there is and do the best one can.
Q6 Neil Parish: And on food production and the balancing of grassland and the like?
Peter Unwin: On food production, food is very much an ecosystem service. One of the key messages coming out of the national ecosystem assessment is that over the last 50 years or so we have been extremely efficient at increasing that ecosystem service and getting a lot more food from our land. The challenge going forward is to continue doing that, because there is a clear commitment to increase food production in a way that makes sure that overall it is not at the expense of other ecosystem services that we get from land, such as fresh water, biodiversity, etc.
The valuation of food is very much in the mix. We are setting off from the White Paper a one-year study with farming and environmental interests to look at how we can get the right balance and make sure we meet our commitments to increase both food production and environmental outcomes. You are right in a sense; obviously, we cannot pretend that we can measure everything accurately and move straight into an economic model that will run our environment. This is an inexact science and it is very much in its infancy, but we should not let the best be the enemy of the good. If you look at how carbon markets have developed in a way that 10 or 15 years ago would have seemed fanciful, water is the next one to follow. Water is the easiest to value; everybody from industry to Government realises its value. Biodiversity is much more complex, and there you have to include a lot more value judgments as well as economic valuation, but I think asking the question helps you to the answer.
Q7 Mrs Glindon: It has been mentioned several times that the paper is the result of a collaborative approach. In particular, Mr Unwin, you said that the aims and objectives cannot be achieved unless that collaboration continues. A vast array of organisations and agencies with very different stances have been involved in it. Is there anything that you think could be a barrier to continuing the collaboration that has gone into the paper’s production?
Peter Unwin: I think that the collaboration has been very good and encouraging. Obviously, different groups come at it with different interests. I think that in the actual production of the White Paper a lot of the workshops we went through to do that brought those interests together. I would hope-we will hear more later-that everybody feels they have got something from it. Equally, everybody will no doubt say they would have liked more from it to push a bit more of their agenda forward. That is absolutely natural and proper. My hope would be that in going forward we continue the recognition that there are a lot of things to be balanced against each other here and we need something that is going to take account of all of them, given food production and environment as the two issues to balance, but there are many others as well. We have set out the tools here that I hope will allow that collaboration to continue, and I think there is a lot of appetite out there to do it.
Q8 Chair: We will take wider contributions after the next three. Perhaps I may call on Martin Harper from the RSPB to give us the green non-governmental organisation perspective of Wildlife and Countryside Link.
Martin Harper: I am Martin Harper and I am the conservation director of the RSPB, but I am here representing the Wildlife and Countryside Link, which is a network organisation representing 36 voluntary organisations committed to conserving the countryside. I will do my best to represent those 36 organisations and their 8 million supporters. If I stray into RSPB territory no doubt somebody behind me will give me a kick. I want to dwell briefly on why I think this paper is important. If I may, I would also explain why we welcome it, but I will not let down Peter Unwin because I will highlight some concerns as to what we will be expecting as the paper is implemented.
Why is it important? We have heard a lot about the value of the natural environment. The UK national ecosystem assessment laid out the case very clearly as to why it wanted a better investment in nature and why the current way in which we go about decision making is failing to capture some of the values, and, therefore, if we carry on the current approach we will be selling ourselves and our children short. The national ecosystem assessment did a fantastic job, and that flowed very much from Mr Sukhdev’s work.
There is also massive public support for looking after the natural environment. The latest viewing figures for "Springwatch" are something like 3 million. Probably Peter would be delighted to have 15,000 responses from members of the public on the Natural Environment White Paper, which is an unprecedented interest. When the RSPB ran its campaign, "Letter to the Future", calling for better investment in nature, it managed to get 350,000 or so signatures looking for more support in this area.
But the reality is that nature is in trouble. One of the headline conclusions from the NEA was that 30% of ecosystems are not delivering the services to people that they should, and we know that we failed to halt biodiversity loss by 2010. That was why we were delighted that the Secretary of State, Caroline Spelman, signed up the UK to the CBD’s commitment to halt biodiversity loss and begin its restoration by 2020 at Nagoya. In a sense the Natural Environment White Paper is partly the UK Government’s response to that, and indeed fulfils the coalition agreement’s commitment to protect wildlife and restore biodiversity.
Why do we welcome it? First, I should put on record and congratulate the hard work of Ministers and the team of civil servants who worked collaboratively with us in developing this paper. We warmly welcome it. The main reason we welcome it is that the ambition is strong. There are some very clear measurable outcomes that will help to determine whether the Government are successful in living up to their ambition. Why is that important? That is important because there is an obligation to report against those outcomes and it opens up Government to scrutiny, so that NGOs such as us can hold them to account. There are some things missing, and we are looking forward to seeing the content of the England biodiversity strategy and, for example, how species’ conservation needs will be addressed. But we were delighted that not only did the White Paper come up with innovative ways to capture some of the values, particularly the utilitarian ones, in decision making but also recognised that most people feel that we have a stewardship role to look after the millions of other species with which we share this planet.
I shall briefly highlight some concerns. I will be complementing much of what Chris has said, so I will do it in passing. Maybe we can explore it in more detail in conversation, but I do not think there is a clear funding strategy to support the implementation of this paper. We know that there was a significant funding shortfall prior to the financial crisis, in terms of meeting our wildlife ambitions. In his study, Lawton highlighted a figure of between £0.6 billion and £1.1 billion to deliver ecosystem resilience. We are not convinced that the figures on the table are sufficient. There is a huge reliance, therefore, on schemes such as agrienvironment to deliver some of these benefits. Our plea is that these schemes need to work much harder. I say this on a day when President Barroso is meeting 27 other Commissioners to discuss the possible fate of the EU budget. We are hoping for a good outcome from that, but we are fearful.
There are four other concerns I would highlight briefly. Unfortunately, in some of the delivery frameworks that are suggested, in terms of local nature partnerships and the NIAs, there is no clear link between national and local. There is unfortunately an over-reliance on the voluntary approach, an example of that being the way in which we will seek to phase out the use of peat in horticulture. There is insufficient detail as to how the UK will take responsibility for biodiversity on Overseas Territories. Finally, many of the access and recreational organisations of Link are a bit grumpy about the lack of recognition of the importance of access and recreation, in terms of the health and well-being of the nation. But we do welcome it.
Q9 Chair: Perhaps we may turn to Dr Andrew Clark from the National Farmers Union and ask him to give the farming industry perspective.
Dr Clark: Thank you very much for inviting me to participate in this afternoon’s session and also for the opportunity for a farming voice to be heard. For the record, the National Farmers Union represents 55,000 farmers across England and Wales. We calculate that we represent about 70% of the farmed area. One of the things we really like about the White Paper is that it recognises the critical role of farming. Farmers are the managers and stewards of the countryside and the environment. We recognise our importance. We recognise that it is important to develop our stewardship ethic. We also recognise that there are now major expectations of agriculture. It is not just about food production; in fact we are glad to see food production back on the agenda and its importance being recognised, but it is not something we can do at the expense of the environment. That is something Peter and others have already said. But environmental management and care for the natural environment has to go hand in hand with food production, renewable energy production, fibre production and providing access to countryside and heritage. It is not a single hit here; there is a whole range of different demands on the countryside. It is absolutely critical that we recognise those demands and how they fit together. Very often while they might be written about separately in Westminster they will join up in a field; that is where integration happens.
There has been much discussion about the balance between food and environmental security. The mantra of the NFU-I will repeat it-is that we do not see those as in conflict. We see our challenge as producing more and impacting less, decoupling our environmental footprint and impact from the food we produce, but we cannot shy away from the fact that the world’s, and even the UK’s, population is increasing. We have a responsibility to play our role in improving our productivity and contribution to world food production.
I think the White Paper recognises that when it comes down to it, it is about individual land managers. We need to engage with individual land managers and farmers-I prefer the expression "farmer" to "land manager"-in a way that inspires them, celebrates what they have achieved, learns from what knowledge they have and then challenges them to do a bit better. Nobody has a perfect remedy here, but we believe that if you do it on the basis of engagement and encouragement you get a lot farther.
Since 1993 and the time I have worked for the NFU there has been a sea change in farming behaviour, certainly in the last five years. We now have an environmental stewardship scheme that I am proud to say is cutting edge, in terms of European agricultural policy. There is no other scheme in the form of environmental stewardship that engages so many over such a wide area with such a good environmental output. In the recently launched Campaign for the Farmed Environment, where we work with RSPB, DEFRA and other environmental groups as well as farming groups, we have got a method of engaging with a far wider farming and environmental community and harnessing that in a way that fits very well with the big society and localism agendas that are so close to Government’s concerns.
There is a lot of talk about sustainable intensification and what that means. It might be something we will come to in a moment or two. I was in the House last week, and the Environmental Audit Committee asked, "Is sustainable intensification something of which we should be frightened?" I believe unequivocally that it is not. The concept of producing more and impacting less is central to sustainable intensification. I do not think we should be afraid of trying to find ways in which to produce the same or more food using fewer inputs and GPS technology, reversing the decline in productivity we have seen in the last couple of decades and using knowledge transfer and applied research. Those are absolutely critical. Finally in terms of sustainable intensification, we are talking about investing. Critically, all the work we are looking at here, in terms of natural capital and managing the environment, is about investing in people and farms to make them work better.
One criticism I have of the White Paper and the general environmental debate that is thrown at farmers is that basically it is too complex; it is almost too sophisticated. There are trade-offs in every activity we undertake. We have spent too little time thinking about what the trade-offs are and about how we can get optimal outcomes that are both productive-we have already recognised that food production is part of ecosystem services-but also address things like water pollution and biodiversity conservation. We need to look much harder at these optimal outcomes, get out of our silos-I am sorry for using an agricultural analogy-and think about a wider way of intervening. I think that for too long we have been looking at outcome, one of them being farmland birds, without thinking about water protection. If we looked at some of the primary resource care, like soil and water management, we might find that many of the biodiversity outcomes come on the back of that.
I have got many other issues but they will come out in conversation. One is about the ability to have a target and ambition. There is great ambition in this White Paper, which I absolutely endorse, but my concern is whether we have the funding and wherewithal to achieve that.
Q10 Chair: That is very helpful. I now ask Ellie Robinson from the National Trust to address the civil society and public engagement aspects.
Ellie Robinson: Thank you very much for inviting us today. My name is Ellie Robinson and I am the Assistant Director of External Affairs at the National Trust. I echo a lot of what has already been said. We really welcome the White Paper; it is a major achievement. Congratulations to DEFRA and the team for pulling together such an ambitious strategy of broad scope. The ambition is brilliant. I think that clear direction is something we have really lacked. To be the first generation to leave the natural environment in a better state than it inherited it, and to move from a nature net loss to a nature net gain, are powerful concepts and they will really help to drive innovation in policy and delivery.
The other key thing is the repositioning of nature as central to economic prosperity and people’s quality of life. It has really helped to take nature out of the environmental silo in policy terms, which is really brilliant. The trust is really keen to play a major role in delivery, and it is as a practitioner that I shall be giving evidence today. I do not want to repeat some of the points that have been made today, given the time constraints. There are three particular areas in delivery terms that I want to highlight. One is that bridging the funding gap between aspiration and reality has been mentioned quite a lot already, but if we are going from the paradigm of protecting nature to one of restoring it over the following decade, that is a huge ambition and the resources needed to do that are significant. Martin has already mentioned how vulnerable we are in relying on agri-environment schemes to work really hard to do the majority of that at the moment, let alone make the step change we all want to see. The ecosystem assessment is a vital platform for doing that.
Innovation in thinking about financing some of this is just beginning. The ecosystem markets taskforce has a vital role to play, and that is really welcome. Some of that opportunity also lies in the public and voluntary sectors, as well as the private sector. We hope that it is appropriately broad in scope. Also, it does not have a blank sheet of paper. We have already discussed in relation to water that United Utilities funds RSPB, the National Trust and the farmers we work with to provide water-cleaning services. The same is happening in some pilots on flood or health. There are embryonic kernels of markets. I think it would be really great to prioritise where we really follow through on the NEAs, so we get some gains as quickly as possible.
One of the risks if we do not make progress in finding these sources of funding is that there will be a two-tier countryside. Clearly, we do not want to wait to implement some of the big new ideas like the nature improvement areas, but if we do not find additional sources of funding, it will drag funding from elsewhere in the countryside, and there is a risk that we will end up with a two-tier system, which clearly we want to avoid.
The second big issue is reconnecting people and nature. Peter outlined that earlier. It is fantastic to see that the potential for health, education and community is huge. It has been one of the big priorities for us. The rhetoric in the sense of what is possible is really strong. However, the detail is lacking. I think the evidence base that is coming through on both social science and medical research is growing every year. I think this is due partly to how the health and education reforms are able to take the potential and embed it in policy development. There are some early steps and some useful hooks, but I do not think the detail yet fulfils the potential. There are some stubborn barriers there, and I think having a further look at this would really help. The ONS measure of national well-being that is being discussed might provide a really useful driver to work out what in particular will help us take nature from a fringe interest in education and health and make it a mainstream contributor.
Our third issue is about the need for a framework for enabling strategic and integrated land use decisions. Andrew mentioned some of the potential tensions and multiple demands on land. Some of the bits of work the Government have done under Foresight have really shown what the huge and competing drivers will be for food, fuel, health, nature and water over the next 50 years, and the forest planners are looking at similar kinds of issues related to woodland and forest creation, among other things. How will we embed geography into decision making? The really key thing for us is how planning reforms do not just pick up the spirit and ambition, but provide a practical framework that allows the value of nature to be embedded in decision making at all levels. There are worrying signs that economic growth at all costs is a clear priority.
Local nature partnerships have been mentioned already. They could be a really useful tool and very supportive, but they do need guidance, resources and strategic connection to local enterprise partnerships if we are really going to make a lot of the words turn into actions that hit the one parcel of land that Andrew mentioned earlier. We are worried that we are rushing these for no particular reason and they are deemed to be fit for purpose.
In summary, the direction and ambition is absolutely great. Our questions are about maintaining the momentum and integrated approach to delivery, particularly across Government but also in DEFRA, and the planning reforms are the critical test. Are we going to find the resources to meet the ambitions over the next decade and beyond? Saving the second pillar is the starting point at the moment. How will we know we are collectively making progress and, if we are not, why?
Q11 Dan Rogerson: The planning stuff really interests me. One question I asked the last time I did a session on this was about valuing landscape. That seems to me to be a harder thing to put a value on than some of the other aspects of the natural environment that are more readily quantifiable; at least you have models there to do it, which is really interesting. There is the issue of reconnecting people with nature. If we have a model that says we want denser and denser populations occupying what is already there with as little added to it as possible, we create a lot more barriers to people connecting with the environment. If on the other hand we are saying we want to look at development such as modern garden cities or whatever, the challenge then is that we are actually going out into that area. Do you have any thoughts about how those kinds of issues could be dealt with?
Dr Clark: I absolutely accept the point in terms of planning. Looking at the development of the national planning framework, it is a high-risk strategy. It is uncertain, in the context of a more locally driven policy environment with a slimmed-down national policy, what will be seen as nationally strategically important, and how protection of the strategic importance of key issues will play out.
From the farmers’ point of view, we are very concerned that the planning framework recognises that there is a role for food production in the open countryside, and that there is a role for processing that food production in the countryside. In other words, the countryside is not seen simply as a place for recreation and cultural rebirth, but also as a workplace and a vibrant economy in its own right.
The national planning framework-DEFRA has a key role to play here-has to strike that balance and recognise that the countryside, the rural areas and rural economy, has to be kept just as vibrant as the rural environment. That is my key concern about the planning aspects of the debate. I hope that when you look at the consultation that comes out before the summer recess, when apparently the framework will be published, we will be able to see something that recognises the rural economy as well as the rural environment.
Martin Harper: I would make just two points. Broadly, I agree with Andrew. First, there is new guidance on the presumption in favour of sustainable development, which worries us. This is the driving force behind the new planning reforms. At the moment the guidance is very much towards encouraging economic growth. Therefore, many of these other interests are likely to be overridden. We are very concerned about that. We would expect sustainable development to be defined on the face of the Bill, if indeed they are going to go ahead with that phrase; otherwise, it will just be a case of presumption in favour of development.
The second point I make is that a very explicit statement emerged from the NEA, which said that, if you want to capture all of the different values that the landscape offers, you probably need to express them spatially. I think it is a mistake that the national planning policy framework thus far is not spatial in expression. If you can express the landscape and try to work out what kind of value different bits of the landscape give you in terms of food production, water quality and access to recreation, you will make different decisions. Those spatial tools will help planners make the right decision, which, hopefully, will lead to reconciling those competing interests.
Ellie Robinson: To add briefly to that, it is a really good question. We have to see how the planning reforms will answer it. In terms of valuing landscape, I think one of the areas in which we have failed in the past, and which the trust is alive to, is how you tap the tourism market and take some of the value from that and put it back into land management. It was mentioned briefly in the uplands work done by DEFRA, in terms of valuing an ecosystem service. There is huge potential there. We have not really cracked that in this country. I think other countries have done better than we have.
The other point is about how local communities in the new local plan system, whether it is neighbourhood plans and then bigger local plans, are able to express what they passionately care about on their doorstep and identify areas that are valuable to them. I think it is hard to see quite how that will play out in reality, but it is a worry because there are not any easy hits or mechanisms to use. We will have to see.
Peter Unwin: On this point and linking it to planning, you may or may not be aware that the Government had a growth review earlier in the year and are now having what they call phase two of the growth review, which I think has five strands. One of those strands is the rural economy, on which DEFRA is leading. It is looking very much at the issue, as Andrew says, of how we can think of the rural areas in terms of economic growth. How can they contribute to their own and national economic growth? In doing that, how can they take advantage of their key selling points? Landscape, tourism and natural capital are one of them, so getting that balance right would be a key part of that growth review.
Dan Rogerson: I think you were hinting that you wanted local authority planning departments to be able to factor all of this in, and the people who take the decisions, of course, are local authority members. It just strikes me that what we do not have really is a toolkit for them to have the confidence to be able to take these things into account. If I look at large developments in a constituency like mine in Cornwall, the council is a unitary authority that is big enough to have landscape architects and so on, but even in the advice they give there does not seem to be a sufficient model there. Could Government be doing more to set out the framework and provide a toolkit to planners and decision makers?
Q12 Chair: Perhaps we may broaden it a little. We have tried to break it up into chapters 1 and 2 of the White Paper. It is a bit like the Bible. I would like to build upon some of the questions we have had and the common strands that have come through. I would like to be quite provocative, if I may. I think one of the reasons we are not doing very well in retaining water on farmland is not to do with lack of compensation; it is because of legislation already in place that flatly contradicts what the White Paper and businesses like water companies, with which I am sure farmers would like to work in conjunction, would like to see happen. My understanding is that any water that is retained on land in any volume is deemed to be a reservoir. We have the Reservoir Act 1975 with guidance to elaborate, and the Flood and Water Management Act 2010, which run completely counter to trying to bring the farming community together with water companies on upland storage, which we explored a little in our uplands report, and which I think the Department is exploring in its White Paper. Are there any ways we can get over this barrier? You might want to elaborate on the points Mr Parish raised about compensation, but my understanding is that water in any volume retained on land constitutes a reservoir. Dr Clark, I think I am right in saying that no farmer in his right mind would want such a reservoir on his land.
Dr Clark: I think you would be correct. We have to be very careful, when we are retaining water on land, about whether it is wash land on a temporary basis or more permanent. I suspect the Environment Agency would take different views on whether it is permissive wash land or an easement. Either way, from a farming point of view, if it is done with agreement and on a catchment scale, we would expect to see an additional service coming out of farmland helping to manage water flows within a catchment. That has to be done on a catchment scale, with a view to what the costs are. Some of the problems are not so much to do with the regulations about whether it is or is not a reservoir, or whether you need planning permission for that kind of thing; it is about the site’s capability in terms of hydrology to undertake a catchment of that scale, and what impact you need to have in terms of controlling floods.
It is also a matter of compensation or payment for service. At the moment, some of these services are taken for granted, in the sense that land floods and that is fine; you have got a free service there. It is not built into the investment decisions, for example by the Environment Agency or developers who might be increasing the flux of waters going through catchments. They are not contributing to it either. There is a range of issues on this; it is not simply a matter of regulation.
Peter Unwin: I am not an expert on reservoir legislation, but I assume there is a difference between water permanently stored and water temporarily stored during times of high flooding. I would hope that the new system of funding that we are moving to on flood risk management, which is more locally driven, will enable this issue to be looked at. I know that this issue has been debated a lot in the past in terms of compensation for flooding, which in some cases may be natural and in some cases may be water deliberately diverted. Obviously, there is a difference between the two. Certainly, the Environment Agency is working much more towards local solutions that might enable that kind of thing to be looked at.
Martin Harper: Perhaps I might make one point about the uplands story to which reference has been made a couple of times, particularly with regard to the relationship between United Utilities and RSPB. We did enter into that relationship to try to improve the biodiversity interests of a large suite of the uplands in the North West. The returns have been good, and not only for wildlife, in terms of getting about 12,000 hectares of SSSIs into better condition; it has also helped some of the downstream water quality effects and has helped save United Utilities between £1.2 million and £2.4 million.
We have done that by United Utilities working with us and farmers to try to get them to enter into schemes to do grip-blocking, keep water on the hills and also reduce stocking rates and changing moorland grazing and burning regimes. That example is a way of getting those multiple benefits. I think it is exactly the kind of message that the NEA was trying to get across. Think big and at scale; think about the right interventions to deliver these multiple benefits.
Q13 Neil Parish: Paragraph 9 of "The Natural Choice" White Paper says: "The Economics of Ecosystems and Biodiversity study shows that protected natural areas can yield returns many times higher than the cost of their protection. There are multi-million pound opportunities available from greener goods and services, and from markets that protect nature’s services." I am very interested to know: where is all this money coming from?
Pavan Sukhdev: Some of these are public goods and services.
Q14 Neil Parish: You can value them, but where physically will it come from? Will it come from the Common Agricultural Policy or water companies? You can value what you like, but it does not create a bean in the end.
Pavan Sukhdev: It flows into higher agricultural productivity, greater resilience and less flood damage and therefore less cost to the Exchequer. These are things that you do measure at the time. They happen, but you tend not to associate the causes. What we are saying is: let’s value the causes as well and, therefore, reflect that understanding in the policy. Patrick authored a study that reflected the global benefits of protected areas. Perhaps he might like to comment on the chapters in his report and summarise them.
Q15 Chair: Could you formally introduce yourself for the record?
Patrick t en Brin k: I am Patrick ten Brink of the Institute for European Environmental Policy, and co-ordinator of "TEEB for Policy Makers". I am a colleague of Pavan’s. Thank you very much for letting me speak. On the issue of value, I think there are real values in-your point on the "beans"-water provisioning. It is in the private sector in a range of countries, for example in France with water, in Belgium with beer, and in Germany with soft drinks.
Q16 Chair: Who owns the water companies in France?
Patrick t en Brin k: It is Vittel in France; it is Rochefort in Belgium. I cannot remember the name of it in Germany. In other countries there is also public support for farmers, for example in some regions of Germany, Japan and in Mexico. They can be from the local to the regional to the national. These are not pilot schemes; they are actual practical schemes.
Q17 Neil Parish: How is the support given?
Patrick t en Brin k: It depends on which country you are talking about. Sometimes they can be in direct payments, for example a payment for ecosystem services just like, as now, exploring whether you should move away from compensation for flood control and towards an actual payments system, because there is a psychological difference between compensation and payment.
Q18 Chair: Could I put the question a slightly different way? What we have picked up from just about every witness we have heard from is that there is a gap between funding and the aspiration. The RSPB, NFU and National Trust have all said that this afternoon. PricewaterhouseCoopers said there is no clear funding strategy; there is an over-reliance on agri-environmental schemes and as we speak we do not know what the future of the next round of CAP reform will be. You bring the benefit of what is happening in other countries, but we are looking at this White Paper, how the targets that have been set in it will be achieved, whether the funds are sufficient and, as Mr Parish said, where the funds are coming from. I do not think that we as a Parliament or Committee would be happy if the money came entirely from public funds. That is not what it is about.
Martin Harper: I think this is a crucial point. In a sense I am not surprised that the Government were unable to come up with all the answers in the period of time. The RSPB produced a report looking at innovative financing options last October and they looked at a range of issues, from the idea of conservation with credits, through to various forms of taxation, through to payments for ecosystem services, as well as more creative partnerships between private and public. What we had hoped for was a more comprehensive assessment of the different mechanisms at government’s disposal and a clearer signal about which ones would be pursued with vigour. There is a proposal for conservation credits to be piloted, which we welcome. Our strong view is that this will be successful at delivering real income only if it is a mandatory system. We were hoping to hear something about taxation, particularly about a peat levy. This is a Government committed to generating more revenue through green taxes.
Q19 Chair: I am sorry-what levy?
Martin Harper: Peat. A levy on the use of peat in horticulture. Peat, rather than Peter over there.
Chair: He will feel we are picking on him.
Martin Harper: We were hoping to hear a little more about whether there would be new ways of generating revenue. I think we have not quite got the answers yet. We are a bit disappointed.
Chris Knight: Just for the record, I would not say we claim that there is no clear funding strategy. We do not know whether or not there is a clear funding strategy.
Q20 Chair: I am just playing back what you said.
Chris Knight: In that case, perhaps I may change what I said.
Neil Parish: You are not a politician, are you?
Dan Rogerson: Or clarify it-you misspoke.
Chris Knight: I would like to clarify what I said, yes. Unfortunately, we have to draw on examples outside the UK because that is where most of the experience on payments for ecosystem service projects is. Mr Parish asked who would pay for this and where it would come from. If you look at the US markets for habitat banking, currently $3 billion has been traded, mostly provided by the private sector, in habitat banking credits, or biodiversity offsets-which is a different term for a similar thing-and, if you look at the voluntary carbon markets, about $300 million has gone into reforestation projects, again most of it coming from the private sector.
Q21 Chair: Should we be getting football clubs to contribute to such a habitat bank?
Chris Knight: If they want to do that, I think we should be able to provide them with the guidance and means to do it.
Q22 Neil Parish: Can you explain to me exactly how this money is provided in the States?
Chris Knight: It is through a mixture of regulatory requirement for developers to minimise their impact on biodiversity and then, for unavoidable impacts on biodiversity, to devise and put money into schemes to restore conservation values off-site.
Q23 Neil Parish: Is it right that they build in one area and compensate in another?
Chris Knight: The compensation is conducted in advance to ensure there is like-for-like compensation. To minimise the risk that any conservation values will be lost, the restoration happens in advance and these are called habitat banking credits. Those are sold to developers who wish to offset their impacts.
Richard Drax: It is, in effect, section 106.
Chair: On a national rather than local scale.
Neil Parish: The only thing is that the States is a much larger land area.
Q24 Chair: Is it parallel with the emissions trading scheme, if they are to be trading credits?
Chris Knight: The key difference is that there is a requirement for local equivalence, so you cannot offset biodiversity losses in one area in a state 2,000 miles away. That would be a challenge for the UK in how it trials biodiversity offsets in principle because of population densities.
Pavan Sukhdev: I make two points in response to Mr Parish. One is that wetland banking markets of the kind in the US hinge upon the regulation that created them, so it is very much the role of Government to be able to recognise costs where they have been incurred and ask for compensation through the creation of such market schemes. That is neutral to the Exchequer; it goes from one pocket to another.
But I think the second point is that, through assessments such as the National Ecosystem Assessment and its reflection in the White Paper and other papers that follow, there should also be recognition of direct and indirect benefits. For instance, the indirect benefits to agriculture of a better regulated flow of fresh water, or the indirect costs to municipalities and towns to clear flood damage as it happens, need to be captured; otherwise, by measuring only at the time of the event you are in a sense neglecting the cause of the event. The economics of the cause have to be managed, as well as the after-effects. Once again, it is a question of which part you take the damage in. You might like to invest in prevention rather than cure. Of course, this needs to be explained to the voter because nobody likes spending money today.
Peter Unwin: I wanted the chance to come back and speak about funding. Obviously, it was raised by most colleagues round the table.
Q25 Chair: Perhaps I may also throw in that someone said it was too complex.
Peter Unwin: Dealing first with funding, as I think Martin said, John Lawton’s report talked about numbers of between £0.6 billion and £1.1 billion a year as being necessary. I think John Lawton himself said that that was a long-term aspiration. If you look at what we are spending, it is about £500 million a year, so £0.5 billion, against that from public money. A big majority of that is agri-environment schemes. It is worth noting that in the spending review, when we saw cuts of 20% or 30% across a lot of DEFRA’s other budgets and the budgets of other Departments, agri-environment schemes have carried on more or less at a flat level, so they have escaped those cuts. Within that high-level stewardship, schemes have gone up by 80%.
In addition, one of the few bits of absolutely new money that we got in the spending review was £92 million towards the Water Framework Directive, which will mostly feed into this White Paper’s objectives. Therefore, the main expenditure in the area of this White Paper was protected within the spending review, whereas we had to take some very serious cuts elsewhere. I say that recognising that people like Natural England and the Environment Agency, obviously, had their budgets cut likewise across Government, but we should not underestimate the political imperative that is placed on keeping this money in there.
The second point is that this is not all about Government money. John Lawton himself said that we had to look for other sources. That is why we are looking for payment for ecosystem services and the kinds of schemes that Martin talked about, with United Utilities, farmers and other water companies doing similar things. As to biodiversity offsets which are piloted in the White Paper, we learned a lot from habitat banking in the US and other places in developing those. We have introduced them on a voluntary basis, and we are already getting quite a lot of interest from both developers and local authorities. To explain the point about national and local, a tonne of carbon in Bradford is the same as a tonne of carbon in Beijing as far as concerns climate change, so you can trade them quite happily. Biodiversity in Bradford is not the same as it is in Beijing, and so you have to look at it differently. Section 106 agreements in the past have worked on a site basis and have often led to a bit of compensation on the site that is not particularly efficient and is then forgotten about once it has been left. This gives local authorities the ability to collect contributions from developers across a number of sites and then invest it strategically in something important in that locality, so you will get much greater value for money out of that.
The third and final point on funding is that, as Martin said, this is all about getting better value for money as well. That is why we are looking at agrienvironment schemes both in the current round and in future negotiations going on in Brussels at the moment to try to get greater value for money out of those. But it is also about how to get value for money out of the huge input into this area from the third sector and volunteers right across the country. There I think local nature partnerships will be vital, because what we hope is that NGOs, local authorities and others will come together and decide on the real priorities in this area and give a framework within which that volunteering can take place. Again, you can get a lot more bang for your buck out of that if you run it properly. I think Government have largely protected money in the spending review in this area. Lawton is talking about the long term, so let’s see what future spending reviews will bring. But we have to get more private money in and more value for money out of what is paid in by Government and the huge local and voluntary effort that goes into this.
On complexity, putting together the framework for this White Paper was a difficult task. Martin referred to the 15,000 responses. Everybody wanted everything in this White Paper. The natural environment embraces everything we do, so in one sense it was always going to be complex. We have tried to focus on these four themes to give it some shape and to write it in a language that not only experts will understand, but I recognise that one can always do better at that. I think we rely on bodies like the National Trust and the RSPB, which can be a huge help to us in selling these concepts nationally, because people will read the RSPB or National Trust magazine more than they will read the Government’s White Paper. Getting the message out about it to the great British public is one of the challenges we face, and we want to work with others on this.
Ellie Robinson: On the issue of funding, I do not know what the plans are in DEFRA to resource and support the innovation in markets. Presumably, there will be some support for the taskforce, but one of the key things is to have the capacity in the Department to drive some of the innovation that Martin talked about, incubating ideas and looking at what regulatory framework Government can provide to help create fledgling markets or take-off points. One of the things we have found in trying to gain a market value from ecosystem work over the last few years is that there are real barriers to making that work. We tried to get value from the carbon market for peat restoration. It is fraught with difficulty; none of it is easy, as you would expect with any fledgling market. There is a real need for some economic and policy capacity from Government to help and work with us and obviously with the private sector.
To go back to the United Utilities discussion, Martin was talking about the SCaMP project. That was really hard won. In the price review in 2009 we worked really closely with them for them to be able to use their core capital investment money on land they did not own, but the trust owned, to support our tenant farmers, because the SCaMP was on land that they owned. Each time it is very hard for water companies to be making the case that investment in paying farmers upstream is a legitimate use of water customers’ money. I think that was part of the point the Chairman was driving at at the start, and it is a real one. Chris made the point that the NEA should give companies a lot more confidence to be able to say that the use of their capital to deliver these outcomes is an absolutely legitimate use and a return on their investment, and it is, but we are talking about big shifts in culture and the kinds of frameworks that enable business to make these innovations. It is not easy. We took five years trying this in flooding, health, carbon and water, and it is slow progress. I am just backing up the fact that the regulatory point is critical for innovation and take-off.
Patrick t en Brink: I also support that last point. It is very important that other countries have already done that as well. In terms of other funding sources, there is a major opportunity in terms of the wider cohesion policy, because there is a new move and priority towards green infrastructure, which are not just connectivity but also agricultural land, forest land and all the rest of it. There is a potential source of funding through that in the reform of the cohesion policy. Within the Common Agricultural Policy a lot of people argue for public-
Q26 Chair: Does that not apply just to southern Mediterranean countries?
Patrick t en Brink: No-all the regions with 75% of GDP per capita; other regions are 90%.
Q27 Chair: Mr Unwin, which parts of the UK would fall under that?
Peter Unwin: I think it falls within objective 1 of the cohesion fund, which means it relates only to Cornwall within England. I think there are areas in other parts of the UK.
Q28 Chair: It is very nice for the Cornwall Member present.
Patrick t en Brink: But at least for the Common Agricultural Policy and the move towards public payments for public goods, it all depends on what happens this afternoon, but that movement is happening. We talk about value for money, but I think real physical savings are made in certain things that release funds. Not in the UK, but in Belgium they have done an analysis of flood control, looking at how much you use technological solutions and how much you use wider green infrastructure. They found that they actually meet the same flood risk objectives with much less money, plus co-benefits for other services. That actually saves money and creates funds.
There is a wider issue about fiscal reform, which I think is important. I know that in the UK you have the aggregates and landfill levies, so there is a potential to build on and extend these as well as considerations for pesticides and fertiliser taxes and so on. I think there are a number of sources. Another way of doing it is to follow the Dutch model of tax breaks for certain land use choices. That is for private land owners to make use of tax breaks.
Q29 Chair: That would go down well with the Chancellor.
Patrick t en Brink: It is all in the balance, but I think there are different tools. Looking at this, we have 25 different funding tools for the areas.
Q30 Chair: Mr ten Brink, it would be very helpful if you would share that with us in written form. Mr Sukhdev wanted to come in.
Pavan Sukhdev: I have to leave, because I have another engagement. Thank you very much. Patrick represents TEEB and myself.
Chair: We are very honoured, and we look forward to seeing your medal next time we meet. Thank you very much for being with us. Perhaps we may open the discussion further. We have heard a lot about how there might be more public sector money. As we go round and open a fuller discussion, Mr Knight, you seem to be wearing the green business hat. We have talked about water companies and the Habitat Bank. Can you think of any other co-operative ways where business and local or national government or farmers can work together? Would you like to think about that? I think Mr Parish wanted to come in as well.
Neil Parish: Further to that, has it been considered in the White Paper whether, if you do have a flood area, the insurance companies should pay towards flood protection? They are going to end up having to pay an awful lot of claims because of floods. If we are looking for private sector involvement, it is just a thought that I fire at you. The other one that is probably more difficult is tourism. If the National Trust has people visiting houses and gardens, it can charge for that. You can value tourism; I am sure you do hugely. A lot of those tourists go to upland farming areas because of the hillside and how it is managed. It creates a value in itself, but it does not in itself create a value to the farmer. Do we charge the tourist for looking over the hedge into the hillside? How do we do it? I have difficulty in getting to grips with this. A great deal of valuation is going on here. We value tourism, but how do we actually make that put money into the landscape, not via necessarily Government or CAP support? I do not know who wants to answer the point about insurance companies.
Q31 Chair: I do not think the ABI would necessarily be with you on that. Dr Clark?
Dr Clark: I can say a little about it, having worked with the NFU Mutual following the summer flooding of 2007. There are two points I want to make on insurance companies. Perhaps you should talk to NFU Mutual. The NFU I represent is not the Mutual. The discussions that I had with the underwriters in Mutual were quite clear. Why would they want to pay for insuring people against flooding if the Government were not maintaining the flood defences? Only one place is going to get flooded; it is the area below the flood defences. That is one of the issues.
There is one way in which I think insurance companies can play a role, and it is something that NFU Mutual launched recently in response to the Environmental Liability Directive. Farmers, like other land occupiers, may be open to claims if they cause unintended pollution from their business. Strict liability obviously would have a very significant impact on a farming business. The Mutual now has an advisory arm that helps farmers identify where those risks might be so they can mitigate the risks. In return for getting a very low rate for insurance cover for environmental liability, they take that advice. So, insurance companies can help farmers and land occupiers manage their land to minimise some of the downside risks. That is the key point I want to make in terms of insurance companies. I am sure that when Patrick writes in, it will be among the 26 different ways-or is it many more?-of paying for it. I agree that a tourism tax is one of those ways. There are others-for example, tendering, bidding and using the market mechanism and farmers’ natural entrepreneurial skills to provide this type of service for a payment, and having some competitive bidding process. But for all the different types of approaches that can be taken- whether it is capital allowances, carbon trading, using the marketplace, organic and conservation grade farming-that bring in an income for an environmental service, there needs to be some kind of planning.
As to catchment, we talked about water. You need some kind of plan into which all these individual activities will fit. Similarly, on estuary and coastal management, we could have a free-for-all but it would probably not be a terribly effective way of managing the environment or coastal change.
Q32 Chair: Just before we leave the insurance sector, I remember visiting Cumbria after the 2007 floods. I got the impression that the farmers were the ones who had the greatest debris left on their land, and probably they could not make a claim on their insurers. Has that been rectified?
Dr Clark: No, it has not been rectified. Farmers cannot get insurance cover for debris left on their land or flood damage to crops. As far as I am aware, there is no flood damage and crop protection. There is frost cover. Some farmers take hail cover, but there is no product like that in the markets in Britain. Of course, you do get insurance for your house but not for any of the crops. I think about 42,000 hectares of land were affected.
Q33 Chair: Sheep were drowned and debris was left on the land when the river went down. Mr Knight, do you have any thoughts on more private sector money, apart from the bank and the water companies?
Chris Knight: Again, there are various books with studies of different variations of payment for ecosystem service schemes. A good example, which is nothing to do with farmers, is Mexico, where Volkswagen paid money to land owners in areas surrounding one of its manufacturing plants because it was running out of water. It cost a small amount of investment money, but it safeguarded the water supplies to continue to manufacture engines within that plant in Mexico. There are lots of other examples of payments for ecosystem service schemes, unfortunately most of them outside the UK.
An obvious way would be to stimulate demand for products that UK companies provide that help to safeguard biodiversity in ecosystem services. Some of those products will be usable within the UK, but generally speaking that is an export opportunity for companies. A company like Helveta, for example, is based in the UK but it provides technology to track timber across the tropics. Illegal logging costs about $11 billion a year and that represents a market for illegal operators, but that could be a legal timber trade with an $11 billion value if we could support companies and organisations to track all of that. Likewise, with fish stock there is a huge opportunity to develop technologies to monitor all of that. There are British companies developing hard-standing products to sequester carbon and also nitrous and sulphur oxides. These are technological fixes but interesting solutions to some of the environmental challenges, which, with the right kind of legislation and support, could stimulate more demand.
Q34 Chair: Perhaps we could turn to something said in the introductory rounds about possible over-reliance on the voluntary sector, linking that to strengthening the connections between people and nature. I do not know whether the National Trust would want to lead on that. Ellie referred to trying to unite people in nature. Certainly, there used to be a great many more farm visits before we had all these health and safety rules. Do you have a plan, looking at the White Paper, to see how you can enhance your membership even more and make your members even happier?
Ellie Robinson: Perhaps we can look at that from the educational point of view. Perhaps Martin can come in on that, if you are looking at farm visits. Are you talking particularly about schools, or just generally?
Q35 Chair: I am very mindful of schools. There is still a huge disconnect as regards where meat and milk come from, until you get children from Leeds and Sheffield into the countryside, just locally.
Ellie Robinson: It would be very good to mention that specifically, because it is something that the RSPB particularly led on at least 10 years ago with their rural learning coalition. I will not go into that now. Martin may want to chip in. That sector also includes the education wings of the NFU and quite a few countryside education charities. Largely, that sector, including us and RSPB, is quite well networked, and currently Natural England facilitates us as a kind of education delivery group, if you like. Lots of visits do take place, but what we want to see from the Department for Education is how we can mainstream that so that every child gets a chance to learn outside the classroom as a normal part of education.
Without being prescriptive about it, what are the barriers? New research has been commissioned. Health and safety is sometimes a barrier but that is often the perception more than the reality. It comes down to the confidence and capability of individual teachers. What is it within the more teacher-centric reforms going on in education right now that could really address some of that? We wanted the Department for Education to put more on the table in NEWP. We hope that that will come out of the Department in the coming months. It is frustrating that we have not seen that breakthrough 10 years on to make that a reality for every child.
We are not talking about schools that are good at this and do it week in, week out; there are lots of those. Some children do loads of learning outdoors, and that is fantastic. It is those often in more deprived areas where they do not have a natural environment on their doorstep anyway that would benefit most. The Government have said that they want to use a pupil premium, which is fantastic. We want to make sure that happens in reality, and we are charting progress on that. We are asking the Department for Education what more they will be doing, because we are going to coordinate better as a delivery network so it is easier for schools to access that. I do not know whether Martin wants to say more on that.
Martin Harper: Ellie has done a very good job at outlining the challenge. The benefits are very clear: getting children in contact with the natural environment delivers a huge number of benefits. As Ellie implied, there has been cross-party support for this for the last decade. The frustration is that still something like one in four children is not even going outside to play in this day and age. Formal education was always seen as a guarantee to try to ensure that children had contact with nature as they grew up. Many organisations provide fantastic opportunities for field teaching, but unfortunately some of those are not being catered for. Over the last few years we have been encouraging greater incentives for schools through the curriculum, Ofsted inspection and support for teachers through the TDA, but at the same time it goes back to our earlier discussion about funding and the voluntary approach.
Q36 Chair: I think it was you who said there was an over-reliance on the voluntary sector.
Martin Harper: That is right. If one looks at the blockages and constraints in encouraging more children to get in contact with nature, there is a funding constraint, particularly for some of the schools that do not have big budgets and obviously are under pressure at the moment. We did a little bit of research that looked at all children who were eligible for free school meals being given one free school trip a year. That would cost us £27 million. There is money available through the pupil premium, but it is at the head teacher’s discretion whether to draw down that money to support these things, and at a time when school budgets are tight I am anxious about whether many schools will take up this option. It is an important area, as the Chairman implied in her opening remarks. Essentially, this is an investment in the future. I think the spirit is absolutely willing from across the political spectrum, but unfortunately over the last decade we have not quite come up with the levers to make it happen.
Richard Drax: I have an annual visit. We have just had a visit by 200 children from my constituency in South Dorset to my home. It is quite interesting because out of all the schools that I asked-I must have asked about 30-eight came and about 12 showed that they wanted to come. The cost to the schools is enormous. First, they have to do a reconnaissance for health and safety. The teachers turn up and we say, "Here’s a cow. We won’t put it too close. This is a grain pit," and so on, which is ludicrous. Then they have the cost of the bus, which is extortionate, or they come in a minibus. There is the cost of training people now, because they have to be trained, and pass CAB checks and everything else you can think of. That is more money. Then you get them there. The one person who fell over and broke her ankle was a teacher. All the children went off very happily. That may sum up the whole situation rather nicely. There is a willingness by farmers to get children out. The difficulty is the lack of money and the red tape, basically. The children say they are coming and here is some money from a source, whatever that source may be, and they go out to the farm, which they thoroughly enjoy.
Chair: The other thing is getting them to country shows, for example the Yorkshire show.
Richard Drax: Yes. There are plenty around and plenty of things to go and see. It is just the cost, which is huge.
Ellie Robinson: If it would help, we can send you some further background information about the research that came out last year into the barriers.
Q37 Dan Rogerson: Maybe because we are rural MPs we are defining "experiencing nature" as going into the countryside, exiting the urban environment and going out into what’s beyond. To go to planning again, in terms of what we develop have you got any examples of where parks have been created? Coming back to the point you made about piecemeal development and the ability to pool contributions, if we look at the development on the edge of urban areas, we tend to get a very low-quality play area that lasts for five years and then is vandalised, and then you have an empty bit of concrete or something with a bit of rubberised matting on it, whereas if you aggregated that, as used to happen with urban development, maybe you would get a park at the centre of it. We do not really do that. The Taylor report talked about some of those kinds of things as well. Are there any examples of where that has happened with an urban extension recently?
Martin Harper: As far as concerns the RSPB and many other wildlife organisations, I suppose their version of a park is a fantastic nature reserve on people’s doorstep. I was at Rainham reserve on Friday. We had some school visits there. Rainham is part of the Thames Gateway. There was a vision to try to ensure that we got fantastic regeneration of the Thames Gateway and at the same time having a vibrant and internationally important wetland there. With good planning you can deliver wildlife-rich, fabulous places from which people will benefit. That is why I think building that thinking into the planning system can be helpful. For example, in Scotland through two re-introduction projects in which we have been involved, the white-tailed eagle on Mull and the red kite in Galloway, essentially we have brought back fabulous species into the countryside. We have seen some direct economic benefits in terms of millions going into the local economy and creating full-time equivalent jobs. I entirely agree with your sentiments. I think the planning system should be doing more to enhance the natural environment, rather than perhaps just protect it.
Dr Clark: I was going to go back to the point about reconnection and some of the benefits that the NFU see in getting children especially on to farms. We see it in Open Farm Sunday, and it is mentioned in the White Paper. We put substantial funding into the farming charity FACE based at Stoneleigh, with cells up in Warwickshire. They run an initiative called "Using the Farm as a Classroom". There are fantastic opportunities on a farm to see various parts of the curriculum. There are three big benefits. There is an opportunity to learn about the seasonality of food and reconnecting in that way; there is an opportunity to see how farms work and where food comes from, which for many people, especially in urban areas, is a complete eye-opener. Get them to understand that when they are young. Particularly from our point of view, we think there is an opportunity here to repaint agriculture as a career. So many people seem to regard agriculture as a career of last recourse. We feel that, given the challenges ahead and the opportunities for it to be a vibrant and much-needed industry, it should be the career or choice, not last resort. There are good reasons why we need to have people on farms.
Peter Unwin: To return briefly to Mr Drax’s point about educational visits, there are commitments to that in the White Paper, first to review the health and safety legislation to look at the issue you are raising; second, as Martin said, to enable the pupil premium to be used for these visits; third, for Natural England to provide advice to teachers on them; and, fourth, financial support for school visits continuing through RDP, agri-environment schemes and support for Open Farms Sunday, which you are well aware we had recently. I am not denying that we could always use more money, but I think there is some help there.
On the planning issue, this brings us back to the importance of local nature partnerships because it is exactly that kind of thing we would like them to be doing; that is, NGOs working with local authorities to say areas like Rainham marshes are an absolute jewel in the crown of London’s nature reserves. How can we focus our investment, including public investment, and voluntary efforts on those kinds of areas, rather than being too piecemeal about it, given that we will never have enough money to do everything?
Q38 Chair: Before we release you, perhaps we may ask each of you in order whether you would like to make a key recommendation for taking the Natural Environment White Paper forward successfully, and identify one subject that you think we as a committee should investigate further as part of our inquiry.
Ellie Robinson: It would be fantastically helpful if the Committee could help on the funding issue and look particularly at Ian Cheshire’s taskforce. There are some interesting ideas out there; there is a lot of international experience from which we could benefit, but it is an area where we all need to put in more effort. This is more than about just conventional public funding sources. As Martin said, we have to liberate an awful lot more. Given the discussions in Brussels on pillar 2 today and tomorrow, within the overall EU budget we cannot keep relying on our agri-environment to do everything. It would be great to have your help and support on that key thing.
In terms of an overall recommendation, there is still huge untapped potential for wider social benefit at a community and individual level as a result of access to nature. I think the planning reforms will be absolutely vital in realising that. It has cut across our conversation today. That has to happen not just at a micro-neighbourhood level; it must respect the scale and spatial extent on which ecosystems function, and it is key to social and economic prosperity. Seeing nature embedded in the planning reforms in the way that NEWP has set out is the key test for us.
Q39 Chair: I feel a National Trust membership drive coming on.
Dr Clark: I will bank the fact that you will be looking at funding, so I do not need to cover that one. The issue is one of delivery. How do we deliver in terms of engaging with farmers and land managers? That is absolutely critical. I would like you to consider how you can deliver with the focus on primary resource care, looking at the environment from the bottom up: water, soil and air. What do you get through managing that well? Are we in a sense approaching the environment from the wrong direction? We have been looking at the flowers, bees and landscape. We should look at the fundamentals. The Water Framework Directive requires us to do that, and energy conservation requires us to get ready with fundamentals. Let’s have a look at that.
I do not know whether you asked about this, but I will give it to you anyway. How do we implement this without exporting our problems and our production? I am all for it as long as we do it within the confines of the North Sea and English Channel-
Chair: And the Irish Sea.
Dr Clark-conscious that we are in a global environment.
Martin Harper: One area to which perhaps we have not done justice today, partly to do with delivery, is the link between local nature partnerships and delivering the national ambition set out in the Natural Environment White Paper. There is an enormous amount of enthusiasm for people getting involved and trying to access some of the funding that has been made available for it. Our worry is about two things: one is that the window for accessing the funding is very tight-the end of July-and therefore almost certainly those local groups will work together with existing partnerships to try to access the funds rather than perhaps forge new creative partnerships, as might be needed at some levels. We need to build relationships with internal drainage boards, for example. They will not happen over night. I think that trying to ensure that those local nature partnerships deliver great things locally and also support national ambition is crucial. Perhaps we have not done justice to that today.
If I have one recommendation, it is that I would invite Peter, and possibly the Secretary of State, back in a year’s time to talk about progress. If there has not been adequate progress-I know Peter is a fabulous civil servant with an amazing team and he will deliver great things-or it has not delivered as much as he had hoped, then I would ask what other tools the Government will bring to the table to try to make sure we realise the ambitions in the White Paper.
Chris Knight: I would look at the guidance and the reforms needed to make it easier for the private sector and individual companies and local authorities to invest in some of the things they would like to invest in, which would help to protect environmental services, but at the moment they are not able to do that, or they do not know how to do it. Examples would be things like local authority budgetary time horizons of, say, two to four years when they are planning and investing in infrastructure. That does not at the moment incentivise them to look at longer-term investments. We talked a lot about payments for ecosystem service schemes for water companies. Would it be possible to integrate investments within upland payments schemes, for example, within asset management plans? Is it possible to integrate those? More generally, one of the challenges we encountered in our involvement in TEEB was that we can generate all of the numbers and economics we like to prove that it makes sense to invest in natural capital, but unfortunately the public sector discount rates that are typically used will not allow that at the moment. So, there is a need to look at discount rate practices and see how they can be tailored to different circumstances.
Patrick t en Brink: One thing we have not talked about that is very valuable and that we welcome is the Natural Capital Committee. I think this is a very limited governance approach that will help address the move of nature into the core as a driver for transition to the green economy. The critical issue here is whether that committee will have the resources, stature and audience to ensure that its conclusions and recommendations are duly taken into account. I think that internationally a lot of people will be looking with great interest at the creation of this committee and seeing how it works. The parallel Commission for Sustainable Development, as everybody knows, has been disbanded, but there have been commissions for tax reforms in different countries that have played vital roles, just like the CSD did before. I think they will be very interested to make sure that that has a strong remit.
As to recommendations, we have talked a bit about the WAVES project and the system of natural accounts. I just want to make one point. As Pavan said, this is a fundamental paradigm shift, and it is a slow fuse. You will not get results quickly. A lot of people do not quite understand what it means because they think: how can you get around to having value in accounts? I think it is useful to say there are four steps in this process, each of which is a valuable end point in itself. There are the physical accounts themselves. What is the stock? How much have you got? What is the state of it? It also includes the state of the soil and so on. What are the ecosystem service indicators? These can get back to water storage in soil; it can benefit carbon content in soil, which gets back to climate change issues. What is the value of the service and the changes in the value of the stock, the degradation? We talk about gross fixed capital formation or the depreciation of assets, but we do not have those terms for natural capital. Those have value. Then there is the move towards satellite accounts, and finally integration into the national accounts.
People might jump all the way to the end and say, "This is horribly complicated. We can’t do it. Let’s not invest and put money in," but each of those steps on the road will provide valuable information. That gets back to the spatial dimension. You do not necessarily have to go only global if you do this at a local level around a city or in the functional geography of a river basin. You can have a very good understanding of the interaction between the natural capital and the economic units, whether it is farming or forestry, and the social units, which could be the city or the communities. You could very quickly move to having something very valuable. So, by all means make sure this is supported. It might take a bit of time, but it is worth it.
Peter Unwin: My experience tells me it is pretty unwise for a civil servant to try to tell a Select Committee what to do. It does not normally have a happy outcome, even when one is invited to do that. I think that the areas you have had highlighted here are all good ones to raise. I would like to make a couple of comments. It is always nice to be able to react instantly to something. Martin and I had a conversation a week or two ago about whether the timetable for local nature partnerships was too tight and would lead to existing bodies rather than new ones being set up. Ministers have agreed with his point, so we have extended the deadline to the end of September for initial bids and towards the end of the year for establishing them for precisely the reason Martin has raised.
On Chris Knight’s point about allowing water companies to embed this in their asset management plans, the regulator in the last round has allowed them to charge this expenditure even if it is not on their own land, because of the efforts the National Trust and Government have made, to which Ellie referred earlier.
Going forward, as to what I think is the most important thing, I go back to what I said at the end of my opening remarks. We in Government can meet the commitments we have set ourselves. The bigger challenge is for us to work with business and the voluntary sector to make sure that collectively we all do what we need to do to deliver the White Paper. That is what we have to try to focus on in the months and years ahead. A lot of the issues we have set out here are long-term issues. We will not change valuation of the environment overnight. It is easy for a water company, which can show that it will reduce its charge to customers by investing on a farm. It is much harder where you have ecosystem services and somebody gets it for free at the moment, but you want to bring in a market that means that person will be a loser. These are long-term issues on which we need to focus, and that will require work across all three sectors.
Chair: I thank each of you in turn. I would also like to thank the Committee. We were here until quite late last night. I would like to thank Sarah Coe, who has put the whole afternoon together. I know that one of the Members who is most enthusiastic about this, and I am sure would like to take some credit for it, is Barry Gardiner, who was in the Department. I am sure he will guide us through the inquiry. I note that the author is here; I hope that he will take some pride from the discussions we have had this afternoon. I would like to thank each of you for being so generous with your time. I thank Patrick for joining us from Brussels. We have had a feast of information this afternoon. The introductory remarks have already provided some themes that I hope we will be able to explore later this year. Peter, I am delighted that we heard it here first; it is very good that the Department has made that extension. The Committee thank you most warmly for being here with us and guiding us, I hope, in the right direction, on what is a very ambitious project of which we are delighted to be part. Thank you for being with us and contributing to our inquiry.