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Mr. Butterfill : My hon. Friend will appreciate that the difference between us and the French is that when we abolished exchange controls we had a sound Conservative Government, whereas they still have a Socialist Government.

Mr. Lilley : That is true, but the French Government have that fear. Some believe that there is something intrinsic in the French approach to tax which makes the problem greater, but I believe that those who are willing to evade tax are also willing to get round exchange controls so there will be little change.

The second reason for not supporting a withholding tax is that it will not work. Instead of the money going from one European country to another, it will leave the Community entirely. New York has no withholding tax, Swiss fiduciary accounts have no withholding tax and the

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Bahamas have no withholding tax. A chain of tax havens would doubtless spring up--I know that some hon. Members are experts on this--all around the Community to provide a home for such funds. Thirdly, the proposal is potentially damaging not just because it would drive Community money abroad but because foreign money, although itself exempt from the tax, would resent coming here because much Japanese, American and middle eastern money would object to having to identify and go through the bureaucratic procedures of proving residence to reclaim or escape the tax. Most damaging of all is the effect that a withholding tax would have on the commercial markets and the wholesale markets. In such markets, one cannot identify money that is constantly changing hands or decide who owns it and who is, therefore, liable for tax. Many legitimate commercial transactions would be driven offshore. The German experience shows that the effect of that would be to raise interest rates in the Community relative to outside.

The Swedish Government already find that they can borrow in deutschmarks at a lower interest rate than the German Government can since the introduction of the German withholding tax. We do not want to see a similar burden inflicted on European Governments and industry as a whole. I am happy to say that we are not alone in opposing the measure--which requires unanimity, as does any change in value added tax. My hon. Friend the Member for Wokingham (Mr. Redwood) can therefore rest assured, as can the hon. Member whose tripartite constituency I can only get right once in the course of debate, the hon. Member for Carrick, Cumnock and Doon Valley--

Mr. Foulkes : Say it again.

Mr. Lilley : Not twice. The hon. Gentleman can rest assured that we are able to uphold the pledges that we gave the electorate in respect of zero rates of VAT. We have given a further assurance that we will not abandon our right to retain zero rates.

Mr. Robertson : That was a very interesting reply, proving that the Minister can count up to three twice. It must have been a written answer. The election commitment was that there would be no end to zero-rating on the commodities to which he referred. Why is there no similar guarantee that the Government will not abandon zero-rating on books, periodicals and newspapers?

Mr. Lilley : Except in the exceptional context of a general election campaign, it has never been the practice of this Government or previous Governments to give pledges restricting their rights in respect of taxation --certainly not at this season of the year.

Mr. Spearing : There is a very important point at stake. The Minister asserts that the Government have a right, under the respective treaties, to retain zero-rating. I wish that I was as confident as the Minister about that right. If it could be tested in the European court, has he any reason to suppose that that court would find in the direction that he suggests?

Mr. Lilley : I have every reason to suppose that. Had there been even the slightest grounds for testing the right of the British Government to retain zero rates, the Commission would have included them when it brought its

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case on our rights before the court. It did not because it knows that there is no conceivable reason for testing that right. My hon. Friend the Member for Stamford and Spalding (Mr. Davies) raised a matter related to capital movements--the issue of a common currency in Europe--and gave an extremely lucid account of the monetary arrangements now, and those required for it. Much of his analysis--and the problems that he identified--would apply just as strongly if we linked our currency closely in the ERM as is done at present. As for my hon. Friend's business man, I advise him on my own experience to suggest that his constituent tries another bank where he will get a much better and lower- cost exchange rate. I agree with him that business men in general would like greater currency stability in addition to lower cost of currency exchange. To some extent, currency movements reflect underlying economic changes and we cannot get stability in currency unless we have stability in the underlying economic relationships--above all, the elimination of inflation in all countries concerned. That is why we want convergence in economic performance--not towards the lowest common denominator or towards the average, but towards the best in Europe.

In the few seconds that remain, I wish to refer to the extraordinary intellectual confusion that reigns on the Opposition Front Bench. We know where the Opposition used to stand on the European Community. They were opposed to it in constitutional principle because they believed that membership of the EEC overrode the power of this democratic Parliament. The right hon. Member for Chesterfield (Mr. Benn) and others still believe that, but the hon. Members for Hamilton (Mr. Robertson) and for Carrick, Cumnock and Doon Valley are tentatively and partially in favour of certain aspects of the Common Market. It is interesting that they are in favour only in respect of social policies, by which they mean the very policies that this Parliament and the British electorate will not endorse. They look to the continent for allies in trying to secure the implementation of policies that the British people have three times rejected through this Parliament. By contrast, the Government seek to pursue in Europe the same policies that we have applied with such great success--electoral as well as economic--in this country.

The British Government's position on Europe is very clear. We believe that a Europe with less government is good, a Europe with more freedom for its citizens to trade, travel, meet and compete with each other is better and a Europe that is open to the world is best. By and large, that is the philosophy behind the measures incorporated in the document, which are being pursued with the development of the single market. There are, of course, always difficulties and tendencies in the other direction. That is why my right hon. Friend the Prime Minister sounded the alarm at Bruges and warned against moving away from that path. We believe that a Europe with more government would be bad, a Europe with more government and more centralised government would be worse, and a Europe with more centralised and protectionist government would be worst of all. We can win in warding off those dangers, and most of the battles against regulation and supranational edifices, and against a fortress Europe.

Question put and agreed to.

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That this House takes note of the White Paper Developments in the European Community January-June 1988' (Cm 467).

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Air Pollution

10 pm

The Parliamentary Under-Secretary of State for the Environment (Mrs. Virginia Bottomley) : I beg to move

That this House takes note of European Community Documents No. 5142/88 and the Supplementary Explanatory Memorandum submitted by the Department of the Environment on 20th February 1989 on air pollution from municipal waste incineration plants ; and calls upon the Government to support the introduction of appropriately stringent controls on air pollution from such plants.

The motion concerns two pieces of draft European Community environmental protection legislation--the two draft directives on the control of atmospheric pollution from new and existing incinerators burning municipal waste. Negotiations have so far centred on the first directive, on new plant, on which the presidency hopes to be able to reach agreement at the next Environment Council, on 2 March. There is a possibility that the second draft directive, on existing plant, could in its turn be agreed at the June or November Council. Tonight's debate allows hon. Members to consider the legal and political implications of these two draft directives. Parliamentary scrutiny procedures have now been concluded in the other place and a report is expected next month. Tonight's motion leads the way to formal agreement to these directives when negotiations with other member states are concluded.

Hon. Members will want to know at the outset that the deposited document cited in the motion has been significantly modified in relation to the new plant directive during the course of negotiations. The draft directive for existing plant is expected to be amended in line with these changes when it, in its turn, comes up for detailed discussion.

I would like now to set out the main features of the new plant directive and then to explain how the text has changed from the initial draft set out in the deposited document and then go on to outline remaining issues to be decided before agreement can be reached.

The new plant directive, as a daughter directive of the air pollution framework directive, would require all new incinerators to use the best available technology not entailing excessive cost to minimise air pollution. It would require them to meet prescribed emission limits and combustion conditions, and to comply with proposed requirements as to their equipment and operation. Emission limits are proposed for dust, heavy metals and acid gases. Less stringent emission standards would apply to incinerators with a nominal capacity of less than 3 tonnes of waste per hour. Continuous measurement of dust, hydrochloric acid, carbon monoxide and oxygen is proposed for plants of over 1 tonne an hour, and periodic measurement in the case of all other controlled substances.

Until cost-effective dioxin measurement techniques have been developed, the directive requires surrogate or indicative measures to ensure the prevention of dioxin formation, prescribed combustion conditions requiring a temperature of at least 850 deg C and a minimum residence time of two seconds. Member states would be able to authorise exemptions to permit innovative combustion or gas treatment technologies, provided that higher levels of polychlorinated dibenzopara-dioxins and polychlorinated dibenzofurans would not result. Plants would be required

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to have auxiliary burners to prevent the temperature of the combustion gases falling below 850 deg C and for use during start-up and shut-down operations.

Emergency measures to ensure compliance would have to be taken in the event of limit values being exceeded. Plants which continued to fail to comply after remedial action had been taken would be closed down. In the event of breakdowns or stoppages of purification devices, plants could be authorised to continue operation in breach of the limit values--although still subject to a temporarily relaxed limit in the case of dust emissions--for no more than eight hours' continuous operation and no more than 96 hours' cumulatively over a year. During such periods, all other operating requirements would have to be observed. The directive permits a further derogation by the competent authorities for the smallest plants, of less than 1 tonne per hour, where further special conditions apply, provided that the Commission is firstly consulted about such proposals and then informed of them. The dust limits with which such plants must comply are then relaxed. The draft directive on existing plants lays down a timetable under which existing plants would have to meet interim standards for dust emissions within five years and full new plant standards within 10 years.

Hon. Members may find it helpful if I set out the main changes that have been made from the original text of the directive relating to new plants. First, the scope of the directive has been reduced to clarify the intention that industrial waste should be caught only if it is similar in composition to domestic refuse. The directive specifically excludes a number of other waste streams such as chemical, clinical and sewage sludge, which are expected to form the basis of further directives in due course. My hon. Friend the Member for Isle of Wight (Mr. Field) will be pleased to know that plants burning specified "refined waste derived fuel" may now be excluded by the competent authorities from the provisions of the directive if compliance would entail excessive costs or be inappropriate technically, provided they comply with the requirements of the air pollution framework directive and do not burn other waste materials. Secondly, the size categories have been changed from two sizes above or below five tonnes to three sizes--that is up to one tonne per hour, between one and three tonnes per hour, and over three tonnes. The derogation for small plants in tourist areas has been replaced by slacker emission limits, for dust and hydrochloric acid only, for all plants under 1 tonne an hour, with a further exemption possible subject only to an even slacker dust limit where the competent authority thinks it necessary. The last exemption is still under discussion.

Thirdly, in line with United Kingdom practice, all discharges must be through a stack of adequate height, and there must be control over the whole process.

Fourthly, monitoring conditions have been changed. Following our pressure, the generous averaging periods have been significantly tightened. Instead of a daily limit, the largest plants must meet an hourly carbon monoxide limit. That of course, indicates the effectiveness of the combustion.

Mr. Peter Rost (Erewash) : In the modification to which my hon. Friend is referring, has any further consideration been given to higher temperature combustion as a solution

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to dioxins? Many experts believe that that is not a solution and is not necessarily the right way for the Community directive to proceed.

Mrs. Bottomley : Consideration has been given to dioxins. The proposal is that combusion should take place at 850 deg C for at least two seconds, but it is still subject to further discussion and refinement. The monitoring conditions have been changed. Following our pressure, the generous averaging periods have been significantly tightened. Instead of a daily limit, the largest plants must meet their hourly limit.

The other substances to be continuously monitored have to comply on a rolling weekly rather than monthy basis and keep within a 30 per cent. tolerance each day. It has now been agreed that it is only cost-effective to require the smallest plant to monitor most emissions periodically. The United Kingdom, however, believes that all plants should continuously monitor carbon dioxide.

Fifthly, and again in response to United Kingdom pressure, the maximum permitted breakdown periods for the purification devices have been significantly reduced, although, in our view, not yet sufficiently.

Sixthly, there is no longer a requirement for a mandatory environmental impact assessment. The Commission has accepted that it is too early to extend that directive, which lists municipal incinerators as a category of industry for which an assessment may rather than must be required. But, of course, local authorities will be able to require an environmental impact assessment for a major new municipal waste incinerator should it believe that it would be helpful when determining the planning application.

There remain, however, a few points at issue. Recently, there has been increased pressure to reduce the dust limit for the largest plants--that is those over 3 tonnes an hour--from 50 to 30 mg per cubic metre. We consider that excessively costly, since it would restrict the choice of abatement technology by forcing all incinerators to use bag filters ; the 50 mg per cubic metre limit would also allow electrostatic precipitators, which is the more normal technology in the United Kingdom. We see no reason to go below the 50 mg limit, which was agreed for large combustion plant.

This is not, of course, to imply complacency. We are indeed actively encouraging the development of new technology which would allow more restrictive emission standards to be achieved at an acceptable cost. Only last week I announced the award of the first grant under the environmental protection technology scheme. It was for research into a new type of polymer-based filter suitable for the control of dust from municipal incinerators. If the research is successful we would aim to promote the adoption of this technology widely through the Community.

The United Kingdom sees some illogicality in the stance of those member states which favour very strict emission limits, but then prefer to monitor over long averaging periods. Although we have been successful in persuading our partners to agree to a certain amount of strengthening here, we do not believe that the directive is yet tight enough. Good carbon monoxide control is essential for effective combustion control, so we consider that all plant, regardless of size, should be subject to hourly rather than daily averaging. We are still pressing our European colleagues on this point.

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The Department of the Environment, in the light of those directives generally, and the implications for those involved has set up an informal working group, including representatives from local authority associations and other interested professional organisations to consider the draft directives. It is particularly concerned to try to evaluate the implications of the existing plant directive, and so has conducted a simple survey of the views of those local authorities which are currently operating municipal waste incinerators.

Most of the incinerators currently operating in the United Kingdom were built in the late 1960s or early 1970s. Some have been the subject of significant complaint that the emissions cause nuisance, and recently there has been concern about possible emissions of dioxins to which my hon. Friend the Member for Erewash (Mr. Rost) referred. The number of United Kingdom plants in operation has fallen steadily over the past 10 years so that now there are only 35. One of them is under 10 years old, 21 are between 10-15 years old and 13 are 15-20 years old.

Most United Kingdom plants fall within the upper size range proposed in the draft directive for existing plants, having a nominal capacity of six tonnes per hour or more. Only three have a capacity of between 1 and 6 tonnes per hour, and we are not aware of any below this limit.

Most United Kingdom incinerators are therefore over 10 years old and, without modifications, would be expected to reach the end of their useful working lives over the next few years. From the information that we have gathered in the survey, it appears that almost 50 per cent. of existing United Kingdom municipal waste incinerators are likely to close by the mid 1990s. In only a small number of cases was the prospect of the draft directives stated to be a prime reason for their impending closure.

Of those incinerators likely to remain in operation, all would require some modification or the retrofitting of equipment to meet the draft directive's interim standards and, ultimately, the full standards for new plant. The most commonly quoted needs would be for the fitting of auxiliary burners, the provision of additional monitoring and recording equipment and the addition of new or improved abatement equipment such as electrostatic precipitators or gas scrubbers. Unless the directive as finally agreed provides flexibility in the requirements for temperature and residence time for existing plant there may be a need for even more extensive adaptations.

Many operators have pointed out that a significant increase in costs will be inevitable in implementing the draft directives. However, with the possible exception of the tighter dust limit that some member states are seeking, it is clear that the provisions of the directives are broadly in line with those that will result anyway from the higher standards that Her Majesty's inspectorate of pollution will be requiring for domestic environmental reasons. We estimate that the cost of building a new plant to meet the directive standards would be between £35 million and £40 million, including heat recovery, which we expect most of them will wish to include. As for existing plant, the informal working group further estimated that it would cost around £300,000 to convert each unit to the expected interim standards of the existing directive, and on average

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a further £1,200,000 to upgrade each unit to the full standards of the new directive. Most of our incinerators consist of between two and four units.

Although, as I have explained, we do not believe that they go far enough yet in certain particulars, the Government broadly welcome the efforts by the Community to tighten up standards for waste inciner-ation, and I commend the motion to the House.

left 10.15 pm Ms. Joan Walley (Stoke-on-Trent, North) : I have listened with great interest to the Minister because waste management and the control of pollution are high on the Opposition's agenda. We welcome any proposals, and these in particular, which will prevent or reduce air pollution.

We welcome what the Minister has had to say about research under the environmental protection technology scheme and about the informal working group which has been set up with local authority representatives, as well as her comments on dioxins and the urgent need for research on the many problems that we know exist. They are all matters that we would like to see strengthened and incorporated in the final proposals.

Having said that, it is important to say that the United Kingdom's waste disposal policy is inadequate. Despite their stated commitment to the environment, the Government have failed in the past 10 years to clean up the waste disposal industry. The waste and recycling industry is not properly geared up and we need real policy and real action. Welcome as the proposals are for existing and new municipal incineration plants, they cannot be isolated and treated separately from an integrated approach.

I urge the Minister to take that into account both in the Government's policy making and in discussions in the EEC. How does the hon. Lady intend to link action on municipal incineration plants with action on landfill sites, stricter enforcement and monitoring of all waste disposal and the provision of capital and revenue money to finance the investment that is urgently needed throughout the industry, particularly that provided by the public sector? Let us be clear that Britain has no overall waste management strategy. At present, waste disposal is managed on the basis of the cheapest possible option. There needs to be a stringent regime of licensing and monitoring of waste disposal and recycling to ensure high standards of operation. Proper investment in incineration would make it preferable to landfill as a means of waste disposal both in terms of environmental protection and energy recovery--a point that I was pleased to hear the Minister make.

It is clear that incineration should be allowed only where the most advanced technology is used to ensure that the incinerator is environmentally safe and does not emit any harmful gases or substances into the atmosphere. Without assurances from the Minister about money, we could end up with existing plants closing down, no new investment for new plants and a complete dependence on landfill sites where costs at present are kept artificially low because of the lack of investment in their infrastructure.

The Government have presided over a deterioration in waste management, largely due to financial constraints imposed on local authorities. I read with great interest the report of yesterday's debate in the House on rate capping. We should be aware that if the Government reduce local

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authority expenditure, local authorities will find it difficult to find the necessary resources to carry out some of the proposals in the EEC directive.

How are local authorities to finance the improvements which both Opposition and Governments Members agree are important? Investments financed by loans already have to be sanctioned by the DOE, so there will be difficulties there. Certainly, changes in the whole aspect of local authority finance after 1990 will result in pressure to finance capital expenditure out of revenue, but councils will also be squeezed by the poll tax on the revenue side. New plants, which would have a capital cost of £15 million to £20 million, could not be built under present Government controls over local authority spending. What proposals are there to ensure that public money is available to finance these new plants, which will be more essential as the costs of landfill sites and transportation of rubbish to these sites rise? Estimates vary as to the likely impact of the EC directive, but even by the most generous, as the Minister explained earlier, only 10 to 14 of the 38 incinerators still operating in the United Kingdom would remain in service once the directive on existing plants was adopted as it stands.

I agree that there would need to be an average of £2 million or thereabouts spent per incinerator to upgrade them to the new standards set by the Minister, with knock-on investments on extending plant life being necessary to justify installing the new control equipment. Operating costs would also rise and throughputs in some plants would have to be reduced to comply with the minimum residence times proposed.

We believe that this is all vital expenditure. Will the Minister give an assurance that this money will be given the same kind of priority by the Government as that which they are now giving to financing the public relations aspect of the sell-off of the water and electricity industries?

This alarming picture of the amount of investment that is needed in waste incineration plants is a direct result of Government failure to recognise the importance of waste management. Designed in the late 1960s, the majority of incinerators are 10 to 15 years old and of a very basic design, which, as the Minister explained, does not provide for a modernising capability. If a plant is to be economic it needs to recover energy and we certainly believe that the waste recycling aspects of this kind of activity are most important. To fit an old plant with pollution abatement devices, auxiliary burners and waste heat recovery systems would mean completely rebuilding, at present-day costs of £20 million to £40 million plus. In fact, a minimum throughput of a quarter of a million tonnes per annum at £12-14 per tonne would need a plant of £30 million.

The Greater London council, in its wisdom, was prepared to budget for the long-term needs of Londoners in respect of municipal waste incinerators, but will this Government, when it comes to it, prevent equally caring councils from doing likewise? Will there be a commitment by the Government that local authorities will be able to have the means to invest in this kind of expenditure?

Sheffield is an example of an authority which runs its own incinerator in the middle of the city and runs district heating from this. Sheffield would wish to comply with the EC regulation and is constantly pressing for capital allocation from the DOE. If there is no specific allocation for the changes, I believe that the city would be in extreme difficulties in meeting the proposed incineration changes.

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The mechanism is there to retrofit the incinerators, so will the Minister undertake that there will be sufficient allocation of grants to local authorities and waste disposal authorities, and will local authorities be allowed to carry the debt charges if that is indeed the only way of financing the most important changes needed? If local authorities will not meet these costs, is it the intention of the Government to make the private sector meet the costs through higher charges to the consumer? In Newcastle, in Tyne and Wear, the private sector was approached because the local authority could not meet the costs. The plant at Newcastle was not considered economical, but it has a throughput of 350,000 tonnes per annum while most other plants are smaller at around 100,000 tonnes.

The issue of public health lies at the heart of this discussion. It is not necessarily the case that "Where there's muck there's brass." We are talking about a cost which is as much about the cost to our health as it is about pure economics. It is vital that the Government should explain their policies about municipal waste incinerators in the context of recent consultation documents. We have received many of these from the Department of the Environment and it is important that we link this discussion with the need for an entirely integrated approach to waste management.

The Government's Green Paper on the role and functions of waste disposal authorities intends to put at arm's length the local authority-owned companies which will deal with waste disposal. The direct implication of the paper is that the arm's length companies will have to raise money from the private sector. The private sector may be willing to ensure the continued full productive life of plants, but based on the assumption of waste continuing to go to a plant for the foreseeable future. With incineration costs at £12 a tonne and landfill disposal costs at only £2.25 a tonne, that is open to question.

In my area in Staffordshire, the Stoke-on-Trent incinerator is the principal long-term waste disposal facility for the north of the county. The waste disposal authorities will understandably be reluctant to allocate capital now when they could face losing facilities in competitive tendering. The preliminary estimate to adapt the Stoke plant for the five- year interim period is £2 million out of a total department budget of £4 million revenue and just £1 million capital. A plant with a 15 -year life ahead of it might be closed down, with grave implications for landfill and unregulated tipping in the area. Tomorrow we shall be debating the problems resulting from unregulated tipping in the inner cities.

What account has the Minister taken of the implications of the directive for landfill waste disposal? There is great concern about the neglect of landfill sites and severe question marks over that method of disposal. Costs are rising. The greater the demand for landfill, the greater is the need for regulation. Methane gas must be reckoned with. The 80 million tonnes of rubbish dumped in British landfill sites each year produces build -ups of methane gas. In my constituency today two houses had to be evacuated because of a build-up of methane gas. Fortunately the borough council in Newcastle-under-Lyme was able to deal with the problem effectively. However, such incidents highlight the need to consider the long-term effects of the build-up of methane gas.

More than half the landfill sites are located within 270 yards of housing or industrial developments. Although

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landfill will continue, it is not necessarily a cheaper or a less environmentally costly alternative to incineration. As landfill standards are raised and are properly enforced, the differential with incineration is lessened by comparable rigorous enforcement. In their official memorandum the Government state :

"The implications for landfill disposal of stricter standards for waste incineration will have to be considered."

Such vague references to landfill waste disposal reveal the Government's lack of understanding about the need for a co-ordinated waste management strategy. Tighter controls and regulation inspection should be implemented right away. I do not see why we have had to wait 10 years or more for the integrated "Green" Bill about which we have heard so much.

The Oppostion believe that waste management strategy should be based on waste avoidance, waste minimisation, reclamation and recycling. A recent report from Leeds recorded that 70 per cent. of domestic waste consists of packaging and newsprint. It also stated that 15 million drink cans, 35 million food cans, 14 million glass containers, and 5,500 tonnes of newsprint are discarded every day. The technology is available to recover cans from waste at municipal incinerator plants. Greater Manchester waste disposal authority saves £1,000 a week on disposal costs by removing tin plate cans by magnetic extraction from part of the incineration process. The magnets, which remove ferrous materials from the ashes, cost £8,000 in 1987.

I have been surprised to discover from replies to parliamentary questions that the Government do not have centrally full details of recycling activities of that type. Due to poor planning and problems, often of investment, magnets such as those used in Manchester are in disrepair. Under the Government's policies, municipal incinerators are unable to make a significant contribution to recycling. A further benefit that can be derived from incineration as an option for waste disposal is that of refuse -derived fuels, and I listened with interest to the Minister's comments on that subject. The Government said in their memorandum :

"the proposals might also catch the use of refuse-derived fuels, for which the Government does not consider the same standards as appropriate, and might indeed rule out further development of these fuels."

Britain's refuse-derived fuel industry was set back in September when Birmingham city council was unable to make a refuse-derived fuel plant at Castle Bromwich pay its way. A major factor there was that, while the Department of Energy was encouraging such programmes, the Department of the Environment declined to issue an exemption certificate under the Clean Air Act for the fuel pellets. Birmingham is covered by a smoke control order which prohibits the burning of smoke-generating fuel. Clearly, this lack of co-ordination between the Department of Energy and the Department of the Environment demonstrates that there is no overall Government policy on waste disposal and recycling. I hope that when the informal working groups are set up there will be discussion with the local authorities on achieving an integrated and comprehensive programme for recycling and incineration.

If waste is to be incinerated or put to landfill under stringent controls and conditions, as it should be, we must

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consider the monitoring proposals in the EC directive. In this connection, the Government must give assurances that an adequately staffed professional inspectorate will be available to undertake those duties.

In accordance with the Green Paper, authorities must hand the incinerator to an arm's length company and finance must be found for the resulting regulatory enforcement of air quality emission standards, to be under the inspection and control of Her Majesty's inspectorate of pollution. We have heard much about the low morale within HMIP. Present restructuring activities do not seem to be successful and I gather that there are still recruitment problems. The Government's aim appears to be to replace the system of regulating air pollution by the best practical means with a system based on emission limits and self-regulation. This may cut administrative costs, but it will have the effect of destroying the effectiveness of air pollution control in the United Kingdom. So much for the Government's declared commitment to the environment.

Mr. Conal Gregory (York) : Is the hon. Lady putting the onus totally on the state, or does she consider that the local authority should have responsibility? If elected local authorities are to be responsible, they should take initiatives in this area and, from the examples she has given, they have the capacity to do so. Or does she think the whole responsibility should return to the state? She is not giving a clear message from the Opposition.

Ms. Walley : The Opposition are clearly saying that we believe that there should be locally determined policies to deal with municipal waste, refuse collection and disposal. If, because of the poll tax and rate capping, local authorities lack the necessary finance to do that, they will be unable to find the investment needed to meet the fine objectives set out in the proposals we are discussing. This is the same as the argument we have been conducting on the privatisation of water. Of course we want the necessary pollution controls on bathing and drinking water and refuse and waste disposal, but the money must be found. If local authorities want to find the money to implement these provisions--as the GLC certainly did-- they should not be prevented from doing so by financial restrictions placed on locally, democratically elected councillors by Government. We need publicly owned, democratically controlled local and regional waste disposal authorities, with efficient and adequately resourced licensing, controlling and monitoring of these activities. Incineration is a viable means of reduction ; and proper regulation of, and investment in, the entire process is long overdue. So is the need for Government initiatives to deal with pollution from clinical and commercial waste. There has been no substantial investment on the scale needed during the past 10 years. We shall pay dearly in money and health for that lack of commitment to the basic infrastructure of public services.

As the last phase of municipal incinerator building took place in the mid- 1970s, the units are all coming up for re-boilering and updating. The Government must tell us how they intend to finance that programme.

Environmentally sensitive incineration is to be welcomed, but regulations should be extended to incinerators that are not municipal plants, and to other forms of waste disposal. Pollution control needs to be part

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of a comprehensive waste policy linked to recycling, energy efficiency and conservation. The initiative in waste disposal has been lost by the Government. If the United Kingdom is to incinerate more on its present terms, we shall have to increase imports of technology, because of our poor record--although I welcome what the Minister said about research into this area.

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The directive should provide the basis of a comprehensive, properly financed waste management strategy. As long as the Government continue to respond to the threat to the environment through the laws of market forces alone, the problems will not go away. Environmental protection has a price. We need to introduce environmental values now in the interests of long-term pollution control.

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10.38 pm

Mr. Peter Rost (Erewash) : It would be discourteous not to acknowledge the formidable contribution from the hon. Member for Stoke-on- Trent, North (Ms. Walley), who has obviously done her homework. Although I agreed with much of her speech, I emphatically reject her unjustified criticisms of the Government.

I declare an interest as a consultant to Associated Heat Services plc, an energy management company which operates plants that convert waste into electricity and hot water for district heating. During my long years of special interest in energy efficiency, I have had the chance to inspect incineration plants with the best technology in this country and in Europe. The best plants are those which convert waste into electricity and hot water instead of just burning it. Unfortunately, there are only a handful of them in this country. Incineration has a bad name in this country, mainly because we use outdated technology. As my hon. Friend the Minister said, most of our incineration plants--only 35 of them are in operation-- are old, and their design specifications make it difficult, if not impossible, to meet today's pollution standards, let alone the new ones proposed. In recent years, we have built only two or three modern plants which have the latest technology and which run commercially because they sell electricity and/or hot water.

I am pleased that my hon. Friend was able to inform us earlier that modifications have been proposed to the original directive. It certainly needed amendment. I whole-heartedly support the efforts of my hon. Friend and her officials to achieve sensible amendments. I am still concerned that we may miss a great opportunity to catch up with the rest of Europe by converting more of our waste into useful energy. The United Kingdom incinerates only 10 per cent. of its industrial and municipal waste. In Europe, the figure is 25 per cent. Some countries in the Community, such as Denmark, Germany and France, convert up to 40 per cent. of their municipal waste into electricity and hot water.

The potential in this country is enormous. The waste that we use for landfill is equivalent to about 30 million tonnes of coal a year. Some of the landfill is used for methane production. Hopefully more will be, but it is unacceptable that we should be virtually bottom of the European league in converting municipal refuse into energy, particularly when the economics of modern technology makes it cost-effective.

We have three major incineration plants which convert waste into energy. Edmonton burns about 10 per cent. of London's refuse and produces electricity from it. There are proposals to modernise and to expand that plant through private enterprise consortia which will make money out of it. It will also save ratepayers' money because it will be less expensive than transporting the refuse to be dumped in holes in other parts of the country.

In Nottingham, municipal waste is converted into hot water for district heating and also produces electricity. There is a similar scheme in Sheffield which it is proposed to expand. The hon. Member for Sheffield, Central (Mr. Caborn), who apologises for not being available for the debate, and I had a briefing from Sheffield officials earlier

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this week. Sheffield has problems because it is expanding its district heating schemes. My hon. Friend is aware of the problems, and I hope that they will be considered.

Meanwhile, new projects are going ahead and are proposed. There is to be a major expansion in south London, involving a private consortium. Using the latest technology, the plant will burn refuse and convert it into electricity and, hopefully, hot water for district heating. The fuel that we are talking about--municipal and industrial waste--is a renewable energy resource. It is a non-fossil fuel. It adds to the diversity of energy resources in the same way as nuclear power, and it should not be neglected.

Landfill is becoming scarcer and more costly because, rightly, we have to tighten up on the environmental pollution and damage which much landfill is creating. Therefore, the arguments in favour of using waste more efficiently to produce energy by incineration are powerful and should be noted more vigorously not just by the Department of the Environment but by the Department of Energy. There are more than 500 incineration plants in the Community as a whole, and a high proportion of them convert waste into either electricity or hot water for district heating--but that is done on only a limited scale in Britain.

In recent years, technology has moved ahead. Some of that technology comes from the United States and from Europe, which is well ahead of the game-- but our country also has much of the best that is available. Unfortunately, we are not using it as we should. We ought seriously to consider greater use of pollution-free waste to add to our energy supplies and improve energy efficiency. There are available now pre-screening processes that can extract from waste non-combustible, environmentally damaging materials such as metal. There is also refuse-derived fuel in pelleted or floc form that is easier to burn, has a higher calorific value, and produces less pollution. The EEC directive, which I welcome, will stimulate investment-- in this country as well--in up-to-date technology. It would be no bad thing if many of our out-of-date incineration plants closed. It is about time they did and that investment was made in new technology, so that the old plants, which merely waste energy, can be replaced by modern technology that makes use of the energy generated by waste material.

I suggest one or two ways ahead, as constructively as I can. We must make the public more aware of the case that I am trying to argue, not only on environmental grounds but because waste incineration as a means of producing energy is cost-effective. We must also make local authorities more aware of the technology that exists, to get away from the bad name that waste incineration has because of the old techniques, whose use remains too widespread. We must make waste disposal authorities aware that there are cheaper options than landfill and basic incineration. Use of the latest technology can make more money, by converting waste into electricity and hot water. During the crucial five-to-10 year transitional period that my hon. Friend mentioned, the Government should give greater encouragement by allowing local authorities to invest as partners in private enterprise consortia. That will require some relaxation of loan sanctions. As the hon. Member for Stoke-on-Trent, North said, some local authorities are happy to enter into partnerships with private consortia but cannot contribute financially because

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of the existing restrictive loan sanctions regime. Where schemes can be cost-effective and are capable of producing cheaper electricity and heating than other methods, it is a nonsense to hold up investment for bureaucratic reasons.

The Department of Energy could do more to promote waste incineration as a form of renewable energy, particularly in view of the need to diversify sources of energy supply and to provide competition for cheaper electricity and heating. Waste energy production can make a major contribution in that respect ; I hope that my hon. Friend will pass that message to the Department. Unless a more positive strategy is developed, we shall miss the opportunity that the directive thrusts upon us. We will miss the opportunity of exploiting the new technology--other coutries are exploiting it much faster--to produce energy and to reduce wasteful and environmentally undesirable landfill. But, even worse, there is a danger, if we do not develop a positive strategy, that, instead of increasing the percentage of waste that we incinerate and convert into energy--that is the way to catch up with the rest of Europe--we might actually see a reduction. The reason is that many of the existing incineration plants will have to close if they are not suitable for refurbishment, and the new investment that ought to be going into their replacement will not go ahead. As a result, we will drop even further down the league table of European countries that use their waste effectively, efficiently and without causing pollution.

I welcome this EEC directive. My hon. Friend has reassured us that it is being sensibly modified and applied, but there is still a great deal to be done. I hope that she will take note that there is great potential that we should not lose sight of.

10.51 pm

Mr. Malcolm Bruce (Gordon) : First of all, Mr. Deputy Speaker, I must apologise to you and to the Minister for not having been in the House at the beginning of this debate. I did set out to be here in good time, but unfortunately somebody turned off the electricity in the tube. Perhaps the hon. Lady will put a word in with her husband about it. If I raise issues that she has dealt with already, I apologise.

The debate is welcome, and the issues that the EEC directive raises are important. When I read the briefing material, it concerned me, although it did not surprise me, that the Commission had specifically identified the United Kingdom as excluded from the five countries with detailed plans for the disposal of waste--particularly by incineration. The Minister has said that the Government have every intention of responding to the directive. I hope that, in doing so, they will not be restrained by the Commission ; I hope they will feel that this is an issue they can take up themselves with a view to moving forward and starting to formulate a more detailed and coherent objective.

I want to pick up some points that were made by the hon. Member for Stoke on Trent, North (Ms. Walley) and to add my own comments. Municipal authorities will always have an important role to play in the safe and efficient disposal of rubbish. I certainly do not object in principle to the private sector's being involved. I am quite sure that in a whole variety of ways it needs to be involved. Apart from anything else, it has to dispose of its own rubbish. However, I think that there is a slight concern

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