16:59 Dr Whitehead

I suggested that it is worth examining the EU ETS’s structures in respect of the countries that fully participate in it but are not EU members. There are particular regulations relating to that, but those countries participate fully in the EU ETS and are not just observers at the table. They are bound by what happens in the ETS, but they are active participants in shaping it. I hope at the very least that, in our future relationship with the EU ETS, we aim to be a full member and sit round the table, even if we are not a member of the European Union, so that the fact that the development of the EU ETS reflects our country’s priorities for the decarbonisation of our industries and for climate change is fully taken into account.

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17:09 Mr Hurd

For the record, I am neither nodding nor winking, but I thank the hon. Gentleman for a typically thoughtful and constructive response. He is probing exactly the right issues, which are the effectiveness of the cap and the right mechanisms for accelerating the withdrawal of allowances. Without effective action there, we are unlikely to get the robust price signal which he and I want, and which will drive the behaviour we want. I thank him for his constructive attitude to our approach to energy-intensive industries. It is a difficult balance to get right, but he and his colleagues know that we have done a lot over the years to try to protect our energy-intensive industries in this process while trying to ensure that they are fully incentivised to pursue energy efficiency and decarbonisation.

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