Environmental Audit Committee

Barry Gardiner Excerpts

Thursday 8th May 2025 Commons Chamber

[Mr Toby Perkins (Chesterfield) (Lab)]

I am pleased to present the Environmental Audit Committee’s report on the role of natural capital in the green economy. This report was initiated by my predecessor as Chair, the right honourable Philip Dunne, the former Member of Parliament for Ludlow. I wish to pay great tribute to him for his excellent contribution as Chair. Mr Dunne enjoyed what I suspect is an unusual distinction of having both asked questions and answered them in the witness sessions that led to this report. Having originally initiated the report in January 2024 and then seen Parliament dissolve before the report could be published, he was kind enough to return as a witness in December 2024 to brief the successor Committee on the evidence that his Committee had heard and to provide his own insights.

I wish to take this opportunity to place on record my gratitude and, I know, the gratitude of members of the Committee past and present to our former Clerk, Martyn Atkins, who recently left the service of the Committee for a period of absence after many years of service to the House. Martyn has played a huge role in the work of this Select Committee and many others and will be very much missed, as will Chloe Jago, who recently stood down as press officer on the Committee after five years of excellent service to take up a role closer to home.

I thank all those who have contributed to this report, the many people and organisations who submitted written and oral evidence, the Committee staff—particularly Alex Farnsworth, who has worked tirelessly to complete the report—and the members of the current and predecessor Environmental Audit Committee.

Let me turn to the report itself. We were delighted to see that recommendation No. 1—that the Government should produce an impact assessment of the Planning and Infrastructure Bill—was satisfied within a day of our report being published. At this pace, we really could get somewhere. However, we still need to learn more about how the nature restoration fund will interact with biodiversity net gain. I am glad to see that the Minister is here to expand on that in his response.

The Dasgupta review made clear the value of nature. Nature and the services that it provides underpin both our economy and our way of life. In 2022, the Office for National Statistics found that the UK ecosystem’s services were equivalent to 3.5% of GDP, or £1.8 trillion. The UK has experienced significant biodiversity loss in recent decades, with the “State of Nature” report 2023 showing an average of 19% species abundance decline across more than 750 species between 1970 and 2021.

The Committee agrees with the Government that economic and financial decision making should support the delivery of a nature-positive future and we would like to hear a repetition of that commitment and, indeed, to see it actualised in the forthcoming spending review.

The Committee agrees with the assertion of this Government and the previous Government that, in a time of spending restraint, taxpayer money alone is no longer sufficient to deliver the necessary level of environmental restoration, so private finance must play its part. We were pleased to hear from the Minister for Nature that work is ongoing to better quantify the current size of the annual investment in natural capital. The Committee therefore recommends that, within 12 months, the Government provide a report to Parliament on current and projected levels of private investment into nature recovery in England, so that we can see both the progress that has been made and the size of the funding gap.

For the Government to deliver on protecting 30% of land by 2030, they must provide landowners with the confidence to invest in nature restoration. The long-promised land use framework will help, and will give assurance that there is a strategic approach to balance the competing needs for our land in regard to food production, nature restoration, renewable energy, residential and commercial development, and other areas. It will, however, require a natural capital approach to be embedded throughout Government.

The Committee heard concerns that the changes to the agricultural property relief regime had added to uncertainty, although the Government’s decision to give nature investments equal treatment under inheritance tax at least answers the charge that the Government were prioritising nature recovery ahead of food production.

Voluntary drivers of market demand alone will not deliver the demand that the Government need. Compliance mechanisms and the expectation of future compliance requirements will drive market demand, so the Government should look at bringing in increased compliance requirements, such as by expanding biodiversity net gain requirements or mandating corporate disclosure of nature-damaging activities.

The Committee seeks assurances that the proposed new nature restoration fund is an addition to, rather than a replacement for, Government investment in nature recovery. Without clear support for biodiversity net gain, Ministers risk causing uncertainty in nature markets, which could undermine investment in restoring nature. It will be good to hear a full-throated defence of BNG from the Minister in his response to the report—a defence that we heard from him, and indeed from myself, when in opposition.

Although the Committee supports an approach that allows nature recovery initiatives to be pooled, the Government must ensure that we do not end up with nature recovery miles away while there is a further eradication of nature within urban settings. One of the strengths of BNG is that the communities that suffered the nature blight also benefited from the recovery of nature locally. It will be good to get a commitment from the Minister about that principle remaining in place under the nature restoration fund proposals. Nature can grow hand in hand with our economy, and money from growth should go back into helping nature thrive.

The report provides the Government with a road map to restoring nature by capitalising on our huge national strength as a global financial leader. It cautions the Government not to undermine the progress already made and offers our support for the measures that help nature’s recovery come hand in hand with the economic growth that the Government rightly demand.

[Barry Gardiner (Brent West) (Lab)]

I am delighted to speak in support of the Committee’s report, and I congratulate my hon. Friend the Chair of the Select Committee on the way in which he has led the Committee and on how he took up the remnant of this report from the last Parliament as the first report for our Committee in the new Parliament. He is right to recognise that natural capital is the foundation of our economy. With the spending review next month, does he agree that the Government should set out precisely how they have taken a natural capital approach to the evaluation of spending decisions? Does he agree that the new national wealth fund should be empowered to invest in the natural capital project, as highlighted in our report?

[Mr Perkins]

To return a compliment, my hon. Friend is the only person who was there at the start of the evidence and at the end, and we are very grateful for the continuity he provides. He is right that, as the Committee’s report lays out, we need to see a natural capital approach embedded right through Government. The forthcoming spending review is a great opportunity to see that, and I really hope that we do. He makes an important point about the national wealth fund; it provides a huge opportunity and we look forward to hearing what the Minister has to say on that both at this juncture and in his response to the report, which we will get from the Government in due course.