PRIME MINISTER …

PRIME MINISTER                                                      July 2006




MY PRIORITIES FOR DEFRA

Thank you for your Personal Minute setting out the key challenges facing my
Department. You asked for an initial assessment of my priorities going
forward.

I am determined that Defra should make the fullest possible contribution to
meeting the overarching challenges for the Government which you set out.
But it is the environmental challenge you identify which is our ultimate test.
This letter sets out how I and my colleagues intend to do that.

Refreshing Defra's strategy

Since my arrival in Defra we have been examining our aims, priorities,
engagement with citizens and businesses, and alignment of policies, finances
and organisation. That process is still going on, but I want to share with you
our initial thinking.

Our licence to operate

Our starting point is that there are certain things we just have to get right,
because they are key to the needs of our customers and to our reputation as
a Department. Most obviously, it was clear when I arrived in the Department
that we needed to engage swiftly on the single payment to farmers. We have
made progress but there are still big challenges ahead.
Under Margaret Beckett, Defra went a long way to re-establish public
confidence in government's ability to handle animal health crises. I am
determined to maintain that confidence while sharing more responsibility for
high levels of animal health and welfare with the farming industry. The other
major risk we manage is on floods. This is a major area of spend for Defra,
where we know we need to maximise efficiency. We need to manage growing
flood risk as we face the impact of already unavoidable climate change,
striking the right balance between defence and other sustainable risk
management approaches including adaptation and building resilience to
flooding, and between support from the taxpayer and the beneficiaries.

We also need to maintain the confidence of people in rural areas that the
government understands their concerns. In the long-run, I believe that must
mean mainstreaming rural issues across government. I plan to work with
Ruth Kelly to develop a positive approach to "places" that works for rural
communities as well as those living in towns and cities, seizing the
opportunity offered by the creation of the Department for Communities and
Local Government.

Our mission

The challenges we now face in the environmental arena are of a different
order of magnitude: quite simply they come down to the fact that as a nation ­
indeed, across much of the globe ­ we are living beyond our environmental
means. The best illustration of this is the fact that if everyone in the world
consumed as many natural resources as we do in the UK we would need
three planets to support us. So, put simply, I see Defra's mission as enabling
a move toward what the WWF has called "one planet living".

The clearest evidence that we are living beyond environmental means is the
threat of dangerous climate change. The scale of this threat, to human life
and to the natural resources and assets on which it depends, for everything
from oxygen and clean water to healthy soils and flood defence, means that
this simply must be our top priority. We are on track to exceed our Kyoto
target, but we know that is just a start. Domestically, we need to maintain our
focus on the long term trajectory towards our target to reduce carbon
emissions by 60% by 2050. The Emissions Trading Scheme decision I was
able to announce is a declaration of the Government's intent to move us
towards that long-term goal as is the Energy Review across a wider canvas.
Interim targets are also important and we have said we will look carefully at
the legislative framework for this (sometimes called carbon budgeting).

Of course, a strong domestic commitment on climate change is meaningless
without international action. But it gives us leverage as we press for a new
international agreement on stabilising emissions, keeping up the momentum
you generated at Gleneagles a year ago, and is the right thing to do.

There are other pressures which we need to tackle urgently if we are to live
within our environmental means, by continuing to push forward with action at
national and EU level to improve water and air quality, manage soils
sustainably and halt the decline in biodiversity. I am keen to improve our
understanding of the services that whole ecosystems provide, and how we
can value these services. These could be powerful conceptual tools for
helping government to design future policies in a way which reflects the true
cost of depleting natural resources.

High impact policies

With this mission of "one planet living" steering the Department, and climate
change and natural resources the evidence that we are most clearly living
beyond our environmental means, I see a number of issues that we simply
must prioritise, even if it means making some tough decisions and trade-offs.

We cannot achieve our goals without action at the European and international
level. Many of the outcomes we are seeking are set, rightly, by the EU
because environmental issues do not respect national borders. Our long term
aim must be to create a global carbon market underpinned by a goal for
stabilising climate change. Working closely with Margaret Beckett and Hilary
Benn, we must continue to play a lead role in the EU and internationally to
reach a post Kyoto climate change agreement, further CAP reform, a
successful outcome to the Doha Development Round and to embed better
regulation.
(i) Energy
As a government, we must ensure that our collective efforts ensure that
we move toward a lower carbon future for all. (It is worth noting that our
fuel poverty targets are made much more challenging by rising energy
prices, even with the additional resources the Chancellor made available
at the Pre-Budget report.) This means delivering the positive vision of the
Energy review, looking at both new ways of delivering energy supply
through greater decentralisation, where I see a big role for local
authorities, further action on demand by households, and stimulating
technological solutions through the new Environmental Transformation
Fund and the National Institute of Energy Technologies the Chancellor
announced in the Budget. I will be working with Ruth Kelly and Yvette
Cooper on how we can move to low/ zero carbon development and how
ambitious we can be about raising standards in the UK's underperforming
existing housing stock. We need to make the most of the new Planning
Policy Statement on Climate Change to start to lock in low carbon living.
And I will be working closely with Douglas Alexander to develop ideas on
how to tackle the problem of rising carbon emissions in the transport
sector. This will include developing a successor to the voluntary
agreement with car manufacturers to improve the efficiency of new cars,
including the examination of mandatory options. We must also secure the
long term future of the EU Emission Trading Scheme, and examine how it
can be expanded to other sectors.

(ii) Water
The threat of drought in the South East has brought home the problem of
the supply and demand balance there ­ which will be exacerbated by
climate change. We need to continue to work on a long-term solution
while ensuring that the companies act to minimise impacts now. Ian
Pearson's Water Saving Group is tackling demand: we will look at the
scope for accelerating the growth of water metering from its current level
of 28% in areas of water stress, and with Ruth Kelly we will be consulting
this summer on new regulations to make the water appliances in our
homes more efficient.
(iii) Waste
Rising levels of waste are another symptom of failing to live within "one
planet" limits. Waste itself is a major source of greenhouse gas emissions
from landfill ­ and there is a high degree of popular reluctance to site
adequate facilities to deal with the waste we create. Through the waste
strategy review I want to put in place a comprehensive approach from
minimisation, through recycling, to recovery and use of energy from waste
which will enable us to match the high standards achieved by some of our
European partners. We cannot pre-empt Sir Michael Lyons'
recommendations , but I am personally interested in whether variable
household waste charging might have a role to play here (this is not
"double charging" but means setting a new and higher bar on what
constitutes acceptable individual behaviour.) Finally, we must respond
positively to the CoRWM report which offers us the prospect as a country
of achieving consensus on the nuclear waste issue.

(iv) Food and farming
Farming is not separate from the rest of the department; it is central to it.
Nor is it separate from our wider ambitions for the country. The food and
farming sector is at the frontline of our approach to both climate change
and the natural environment. Alongside its important economic and health
impacts, the food sector leaves a very significant environmental footprint.
Farmers and foresters manage some 80% of our land, and play a crucial
role in preserving the beauty of the countryside and the biodiversity and
natural habitats within it. Farmers are also integral to our response to
climate change mitigation and adaptation. Our goal must be to develop a
profitable and competitive domestic farming industry which is a positive
net contributor to the environment, while reducing the environmental
footprint ­ at home and abroad - of our food consumption. Developing a
shared agenda with the industry, founded on a long term view of the
funding and policy framework, to move toward a vision of "one planet
farming" is a high priority. We will shortly be launching our revised Action
Plan for delivering the Sustainable Food and Farming strategy for the next
three years and I hope that, alongside a renewed drive on schools and
health catering, we can deliver gains for farmers and the environment. Our
domestic work must go alongside work with our European partners to
   secure further reform of the Common Agricultural policy as part of the
   Commissions review of the EU budget in 2008-9.

   (v) Land
   We need to start a serious debate about the use of land in England. The
   countryside and green space are highly valued and contribute hugely to
   our wellbeing as well as our national identity. Recent polling by Defra
   shows just how much importance people place on protection of the
   countryside, and maintaining habitats for our wildlife. But Kate Barker's
   interim report raises important issues about how we ensure the best use
   of land ­ for economic, social and environmental benefit. We are always
   going to have to make trade-offs in a densely populated country, but we
   need to be sure that the system we have in place is protecting the right
   land for the right reasons. I am meeting Kate soon to discuss possible
   ways forward.

   (vi) Marine environment
   We want to legislate for an agreed UK-wide regime for the sustainable
   management of the marine environment. We have completed the first
   round of consultation on the Marine Bill proposals and I will be taking
   forward discussions on this important issue.

Achieving our goals together: a new contract with citizens and business

To enable "one planet living", we need to think about different ways of
engaging citizens, businesses and land managers. Recent polling, for
example, suggests that over the past year we have seen a dramatic change
in the public concern about climate change. Research suggests that people
are willing to act, but only if they have some guarantee that they are acting
within a framework which means that action will make a difference.

That's why I'm developing the idea of an "environmental contract" which sets
out the rights and responsibilities of citizens, businesses and government in
achieving environmental goals. It will be based on the principles of reciprocity
and fairness with the aim of making environmentally friendly behaviour the
social norm. It will involve providing citizens and businesses with the
information, incentives, choices and expectations to enable them to change
their behaviour. Part of that bargain needs to be that people continue to see
tangible improvements in their immediate environment around them and have
easy access to quality green space - and this is particularly true of more
deprived communities. We will continue to work with DCLG, Home Office,
Department of Transport and local government to maintain the progress we
have already made.

We know from our research that to have any impact such a contract needs to
be rooted in the way people live their everyday lives, and the areas that have
the biggest impact: homes, household products, food, personal travel and
tourism. Our new waste strategy will be an important test of this new
approach to enabling sustainable consumption and production, which I
propose to set out in a more comprehensive action plan.

A key element of it will be to emphasise businesses' role. I want to work
closely with Alistair Darling and the Treasury to encourage innovation in more
environmentally beneficial technologies, materials, processes and products,
and to use this as a way of increasing competitiveness and building new
markets. We should also ensure that overall Government support to business
enables them to realise the very real benefits of greater resource productivity.

The tools we need to use

As well as reviewing our mission and priorities, and the offer we are making
to citizens and businesses, we have also been looking across the Department
at whether we have the right mix of tools to take forward this agenda.

This is particularly important given the tight fiscal climate facing all
Departments over the coming years. We are determined to play our part, by
achieving more with less. Of course, direct spending is only one of the tools
available in pursuing our environmental goals. Potentially as important are:

  · Procurement, which can be used both to exemplify behaviours and to
    kick-start innovation and investment in sustainable goods and services
  · The planning system, because patterns of development have such
    major long-term impacts on the environment
  · Regulation, which if used sensibly and proportionately can drive up
    product standards, give businesses a level playing field and make it
    easier for consumers to make sustainable choices
  · Fiscal measures and emissions trading which can contribute towards
    more sustainable behaviours
  · Information and engagement, which can unleash the power of
    consumer demand by enabling people to make more informed choices
    in their own lives

We need to make sure we are using these tools to maximum effect in our
priority areas, and I will be thinking with my team about how to do this.

Towards a new approach

In June, Defra celebrated its fifth birthday. The Department has a track record
of achievement on which I wish to build. But I believe that as an organisation
we need to find new ways of working if we are to deliver our new agenda,
particularly when so many of the issues I have identified involve working
across government. We are making a start on establishing the new Office for
Climate Change which will be a key government resource in achieving the
challenging targets we have set. I have asked for the Office to be up and
running by September - it will be based in Defra but staffed by a mix of people
on secondment from other key Departments and will report to a joint
Ministerial group.

This is a Department with a strong sense of moral purpose. My overwhelming
impression from talking to staff at all levels is their passion to make a
difference. The challenges we face are daunting, but with a renewed strategic
focus on making "one planet living" a reality, I think we can rise to them.




                             DAVID MILIBAND