House of Commons Hansard Debates for 22 May 1992

Madam Speaker : I had seen the hon. Gentleman. I know that he has been in the House throughout the statement. I regret not having been able to call him, but he is right. I have judgments to make on these matters.

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Small Firms

Question again proposed, That this House do now adjourn. 11.32 am

Sir Peter Hordern (Horsham) : The House will be aware that pressure has been applied for some time about taking action on the late payment of bills which, regrettably, has become a feature of our commercial life in recent times. I accept at once that the Government have plans to encourage the prompt payment of bills, in particular by Government Departments. They are to be congratulated on that initiative. I do not think, however, that the proposals that require large companies to state in their annual report and accounts how quickly they pay their bills or the proposal that prime contractors or Government Departments must include a clause in their sub- contracts committing themselves to pay sub-contractors promptly within 30 days go far enough.

Let us suppose that a prime Government contractor pays its suppliers within 30 days for Government business. What is to prevent that same firm, to compensate for that, delaying the payments to other suppliers for non- Government business? Why should it be only firms tied to Government contracts who pay their suppliers on time? The principle of taking action on late payment has been accepted by the Government for all their own contracts and I think that the commercial world would like to see similar action taken on late payment of bills for other contracts. The Government cannot seriously imagine that the prompt payment of Government contracts will in itself be sufficient to change what is now regular commercial practice--the withholding of payment long after the due date. Hon. Members are aware, from their many constituency and surgery cases, of the way in which large companies deliberately manage their affairs and cash flow in order to retain their money for as long as they can and to leave payment as late as they possibly can.

In the case of large Government contracts, sub-contractors may have to declare that they will pay their bills within 30 days, but what is to happen, I ask my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh), who I am so glad to see is to answer the debate, to the sub- contractors of the sub-contractors? They will know that the original sub- contractors for Government business will be tied to 30 days. Armed with that information they will then be able to borrow from their banks and delay payment themselves, which is a very convenient way of making money. That cannot be intended. It is a very bankable proposition. The bank knows that payment will be made by the main sub-contractor within 30 days, because that is a condition of getting Government business. Therefore I have no doubt that the sub-contractors to the Government sub-contractors will make full use of that bankable proposition. Unless my hon. Friend can advise me otherwise, there is no reason why all the stages downwards, through the sub-contractors for major Government business, should not also be tied to the 30-day rule. When he replies to the debate, I am sure that my hon. Friend will be able to give me the benefit of the expert advice that is available to him.

I am not the first hon. Member to raise the question of late payments in the House. Most recently, my hon. Friend the Member for Newark (Mr. Alexander) introduced a

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10-minute Bill, just before the election. Before that, my hon. Friend the Member for East Hampshire (Mr. Mates) introduced a Bill making late payment a statutory offence, but his Bill, alas, was talked out.

I ask my hon. Friend to understand and sympathise with the position of small businesses today. I am sure that all hon. Members have had representations made to them by small businesses. During the boom, many of them borrowed on the security of their homes. I suppose that one could argue that they were ill-advised to do so and that they should have known better. But what business man would turn away business on the ground that he did not like the general outlook for business? What support does he have now from the banks? That is a new factor. One reason for raising this subject today is the extraordinary pressure that has been exerted on small businesses by the banks. As my hon. Friend knows, the banks are in a very severe mess, first because of their large loans to Latin American countries and secondly because of the huge loans to the property sector, lent on property values that have turned out to be grossly exaggerated. Now that they have lost all that money, or cannot claim it back for many years, they are turning to small businesses to get what they can out of them. They are calling in loans and applying pressure upon small businesses. That is a serious matter for all small firms and it is not surprising that they are in such difficulty. When one adds the unscrupulous practices of some companies deliberately delaying payment for goods and services as a matter of commercial practice the situation is very serious indeed. All the large companies are well regulated. Their payment systems are heavily computerised and notices of regret are sent out to small companies saying that an administrative hitch has occurred and payment cannot be made. That is a regular commercial practice and it is a disgrace. We know that it is going on and it is time that the Government took action to stop it.

Last February, the Right to Interest Group produced a table backed by the Forum for Private Business, Inter Justitia and Dun and Bradstreet. It showed that it takes 81 days from the date of invoice for the average business debt to be paid in England and Wales. That is 51 days after the average 30-day terms of payment and gives England and Wales the worst record in western Europe. The group complained that it would not be acceptable for German purchasers, who pay their business debts 18 days after settlement date, to wait 30 days longer for settlement of their English accounts.

I hope that I do not offend my hon. Friend's sensibilities, because I have never thought of him as a Euro-fanatic and I hope that he will forgive my saying that this is one matter where the Community is right and we are wrong. Interest rates are lower than a year ago, but they are high in real terms and will remain so for some time. Enormous sums are owed to banks, which have been instructed to press small business hard for payment. Many businesses are deliberately delaying payment as a matter of commercial practice. The Government seem to think that the problem can be met by them paying their bills on time, which they should anyway, and requiring sub- contractors to do so as well.

That response is quite inadequate. Nothing less than a change in the law will do. My hon. Friend the Minister

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knows that the Law Commission studied this matter in 1978, before the problems were anything like as acute as they are today, and drew up a draft Bill as an appendix to the report. Lord Stanley of Alderley moved an amendment to the Administration of Justice Act 1982 designed to ensure that the Law Commission's recommendations were implemented in full. My right hon. and noble Friend Lord Hailsham--it is easy to see where his sympathies lay--opposed the amendment on the ground that it was controversial. Some bodies, such as the CBI, opposed the proposals, but the CBI would naturally do so. The Government have no duty to the CBI, which represents large and medium-sized firms which it suits to delay payment. That is how they make a lot of money. The Government have an absolute duty to ensure that the wilful delay in paying bills is ended. That will be achieved only by legislation. All other Community countries, except for Greece, Portugal and Ireland have such legislation. I understand that similar conditions apply in many American states.

What is wanted is the attachment of interest on late payment. Nobody in the House today would dream of paying their Inland Revenue bills late because of the consequences of doing so--interest is applied at once. Interest is applied at once if payment is late on our Barclaycard or Access bills. It is a simple matter to put right. Late payment is a serious problem and small businesses, which face severe difficulty, need to be helped. I fear that the Government have not acted with sufficient force to correct this injustice, which will not go away. The Government must be seen to act, just as Governments throughout the Community and other parts of the world have already acted to ensure that the prompt payment of bills is an accepted standard. This abuse must be put right and I ask my hon. Friend the Minister to do what he always does--to excel himself when he has the opportunity and to make a firm statement about the Government's intentions.

11.44 am

The Parliamentary Under-Secretary of State for Technology (Mr. Edward Leigh) : With the leave of the House, may I welcome you, Mr. Deputy Speaker, to your new post? I am very pleased to see you in the Chair.

I am not sure that I can excel myself, but I appreciate what my hon. Friend the Member for Horsham (Sir P. Hordern) said about the importance of the problem. No one denies that late payment is a problem for business, especially small businesses. Outstanding debt has a severe effect on their cash flows and threatens their survival.

The House is indebted to my hon. Friend the Member for Horsham for initiating this debate. He rightly mentioned the difficulties that have been faced by small businesses in the recent recession and, to use his own words, I can understand and sympathise with the conditions under which they are labouring. I was going to deal with my hon. Friend's calls for legislation at the end of my speech, but as this is a timed debate I shall deal with them straight away and then return to what the Government are doing in seeking to set an example.

Many surveys confirm that businesses are worried about current payment practices. According to a study carried out for the European Commission in 1989 by Price Waterhouse, payment terms are regarded as a problem for

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businesses in all member states except Denmark and Germany. In the United Kingdom, a survey by the Confederation of British Industry at the end of 1990 revealed that late payment was seen as a serious problem by most small firms. One in five small firms even thought its survival to be threatened by late payment. The CBI noted a marked deterioration in comparison with the previous survey four years earlier, in which only one small firm in 10 felt at risk. Delays of between 15 and 45 days beyond the terms agreed in the contract were common. One in five firms was accustomed to waiting more than 75 days to receive payment. My hon. Friend is right to highlight the severe problems that business is facing.

There have been calls from some quarters for the introduction of legislation, which my hon. Friend repeated, to tackle late payment through a statutory right to interest on overdue debts. We are keeping the issue under constant review, although it must be said--this is the difficulty under which we labour--that to date most organisations representing small firms remain sceptical that legislation will improve the late payment problem. The federation of small businesses, the CBI smaller firms council and the Institute of Credit Management have remained firmly opposed to legislation. Indeed, some argue that it could damage the small firm sector. They fear that legislation might encourage large firms with buying power to impose longer payment terms and that it would be used only against small firms.

I know a bit about the subject, because I well remember our hon. Friend the Member for East Hampshire, (Mr. Mates) introducing the Interest on Debts Bill in 1990. I took part in the debate when we devoted an entire morning in the House to the problem. We faced a problem then similar to that which we face now. There was a complete division of opinion among organisations representing small firms on the best way forward. Some point out that suppliers that are owed money would still have to take the customer through the court system, which they are reluctant to do for fear of losing future orders. Suppliers can stipulate credit periods and interest penalties as part of their contract terms under existing laws, although I accept that a small company looking for business is unlikely to want to impose difficult terms on an important customer.

We remain strongly committed to ensuring that the Government lead by example on prompt payment. Baroness Denton, the new Minister for Small Firms, is prepared to follow up personally any cases of alleged late payment to small firms by Government Departments. In addition, she is considering what other measures may be necessary to encourage prompt payment by other public sector organisations.

Let me say a little about what the Government feel that they can do. I am sorry that I cannot offer any obvious solutions to my hon. Friend other than to say that we recognise that there is a severe problem. There is also a division of opinion among those representing small businesses and we must keep that under constant review. For those reasons, the previous Minister for Small Firms asked all major Government purchasing Departments and their executive agencies to undertake surveys of their payment record during the financial year 1991-92. Departments were asked to provide information on the percentage of invoices paid within the agreed terms or, when none had been agreed, within 30 days. They were

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also asked to ensure that they had in place systems that enabled them to continue to monitor their payment performance.

The results of the survey will be published shortly. The early indications are encouraging and suggest that the majority of Departments will report that they paid 80 per cent. or more of their sampled invoices on time. If so, that result will be in line with that of a survey undertaken by Graham Bannock and Partners in September 1991 into the attitudes among small firms of selling to Government. Seventy five per cent. of the small firms surveyed said that they had not experienced any delays in payment from Government Departments.

It is interesting to compare that result with experiences in the private sector in Germany where payment practices are generally considered to be exemplary. In 1991, agreed terms were observed by 73 per cent. of German firms. Therefore, the United Kingdom Government record would appear to compare very favourably with that of the Germans.

Government Departments and their executive agencies are well aware of the need for prompt payment to suppliers and contractors. Treasury guidelines to Departments state :

"The timing of payment should normally be stipulated in Government contracts. Where there is no contractual provision or other understanding, departments should pay within 30 days or on receipt of goods or services or the presentation of a valid invoice or similar demand for payment, whichever is the later".

Measures to strengthen the guidelines further were announced in the 1992 Budget. To help encourage prompt payment of bills by Government contractors to their sub-contractors, all Government contracts are to contain a clause requiring the supplier or contractor to pay its sub-contractors promptly. In the absence of normal practice to the contrary for that type of contract or other special circumstances, the commitment should be to pay the sub- contractor within 30 days of receipt of a valid invoice or similar demand for payment as defined by the contract.

I made a careful note of what my hon. Friend said about sub-contractors and sub-contractors of sub-contractors. It is very difficult for the Government to go right back down the supply chain because, after all, we are talking about freedom of contracts for contractors. Sub-contractors can and should have payment terms in their contracts and enforce them in their credit management and, if necessary, in the courts. That is the most that I can say about the problem, which I recognise. I am grateful to my hon. Friend for raising it and, perhaps now that he has done so on the Floor of the House, we shall be able to consider it again.

Departments are also introducing their own initiatives to ensure prompt payment. The Department of Transport and its agencies, for example, have set up a number of telephone hotlines to help suppliers and their contractors with payment issues. Although that is very encouraging, it is not perfect. I recognise that and my hon. Friend is right to draw attention to it. I am aware that there are a number of problems, especially in the construction industry but time does not allow me to deal with that.

Where late payment to small firms occurs, the fault is by no means always with the Government Department. Many delays are the result of inaccurate or poor invoicing by small suppliers. One component of Government

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measures to encourage prompt payment has been to provide guidance to small firms on how to invoice properly and introduce effective credit management systems.

The Government also have a responsibility to ensure that good services that they purchase are to an acceptable standard and that proper use is made of public funds. Payment delays will inevitably and quite correctly result where there are disputes over quality. I shall now mention action to improve payment practices in the private sector, an issue which I know especially concerns my hon. Friend, although I am sure that he does not think it wrong for the Government to do what they are doing in trying to set a good example. Of course we want prompt payment to become normal practice, not only in the public but in the private sector. The Government have introduced a number of measures to encourage that.

In October 1991, we published "Making the cash flow", a guide to prompt payment for suppliers and customers, large and small. More than 75,000 copies have since been distributed to firms of all sizes and their advisers, and the guide has been very well received. It is aimed not only at customers to persuade them of the benefits of paying suppliers promptly but at suppliers to encourage better credit management. A recent survey for Barclays bank revealed that 46 per cent. of small companies surveyed were doing nothing to address their outstanding debts. In addition to changes to Government contracting guide-lines, the 1992 Budget also included announcements of other measures to tackle late payment.

New company reporting regulations for large companies are to be introduced, which will require disclosure of payment performance. Suppliers would then be able to avoid more easily doing business with those firms where payment is or could be a problem. In addition, potential customers will be aware of which businesses are not treating their suppliers professionally and which, therefore, might also treat customers badly.

There will be improvements to small claims court procedures, making it easier for those chasing debts through the courts. A range of court reforms have already been introduced which are beginning to benefit those chasing bad debts. Summons requests can now be

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processed within 24 to 48 hours through the summons production centre established in January 1990. Plaintiffs can issue most summonses in the courts of their choice, irrespective of where the defendant lives or carries on business. Certain functions such as applications to vary orders and for attachment of earnings orders have been devolved to court staff to fix rates of payment. Procedures for dealing with business debtors have been standardised. Guidelines for court staff explain that if a business cannot pay its debtors, it should normally be wound up or made bankrupt unless a voluntary agreement, which is acceptable to the plaintiff, can be reached. As a general rule, judgments and orders should therefore ensure that business debtors are paid within three months. I am sure that my hon. Friend will regard that as a step forward.

Development funding is being made available to trade associations in sectors where late payment is a significant problem to support new prompt payment initiatives. These could include telephone helplines, counselling services, seminars on effective credit management and the development of common, sector-wide contract arrangements. We also welcome initiatives by others to encourage prompt payment. I was pleased to hear, for example, that nearly 400 companies have already publicly signed up to the CBI prompt payment code.

My hon. Friend mentioned European initiatives. The European Commission is about to publish proposals for EC-wide action on late payment. These are likely to address payment by the public sector and cross-border trading. We shall be consulting widely on the proposals and my officials will be keeping in close touch with their Commission colleagues to keep them abreast of the reactions to the proposals of small firms and their representative bodies.

Unfortunately from my hon. Friend's point of view, I cannot promise instant legislation because there appears to a difference of opinion in the business sector, but I hope that he will think that the Government are setting a good example and ensuring prompt payment of their contractors and, where possible, of their sub-contractors. we are also ensuring that we are not only setting an example by encouraging business to establish codes of practice to deal with this serious problem. The House will welcome what my hon. Friend has said and I hope that he is satisfied with what I have said in reply.

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Toxic Waste (Ellesmere Port and Neston)

11.58 am

Mr. Andrew Miller (Ellesmere Port and Neston) : I am sure that it goes without saying that the importance of the chemical and allied sector in my constituency cannot be emphasised sufficiently, but it is an industry which, by its very nature, creates a fair amount of waste, some of which is dangerous.

Only last week, Sir David Attenborough spoke in glowing terms of the changing attitudes of the industry in the past 40 years. He was speaking at the Chemical Industries Association Ltd's awards ceremony for young achievers. I am pleased to say that Michelle Aspinall who is a constituent of the hon. Member for City of Chester (Mr. Brandreth) and works in a factory in my constituency, was the recipient of an award. The hon. Member for Chester and I both praised her for her achievement.

In his address Sir David stressed that one of the great changes that had taken place in the industry was the growing enthusiasm of young people in the industry for environmental issues. There is insufficient information in this country about many areas of environmental concern, but there have been a fair number of interesting epidemiological studies on environmental issues involving the handling of substances that we all now know to be dangerous. However, there is little real evidence on the issue that I am raising today.

Naturally, the fact that the evidence is not available causes fears in my constituency. There is a certain amount of anecdotal evidence about leukaemia clusters and the like--and it stems from the fact that in the United Kingdom there are no reliable statistics on waste produced or disposed of in the United Kingdom. That judgment comes from volume II of the second report of the Select Committee on the Environment 1988-89-- "Toxic Waste". I believe that the situation has changed very little since then.

I want to raise the issue of organo-halogens, especially polychlorinated biphenyls. The Minister will know that those substances are known to be carcinogenic, which gives rise to serious concern in this country and throughout the world. Such compounds are extremely toxic and persistent and they are biocumulative--that is, they stay with us throughout the food chain. It is important that positive action be taken to control the handling of such materials, especially their disposal. It is vital that they be disposed of in circumstances that are scientifically proven to be safe and which are acceptable to society as a whole.

For some time, throughout the United Kingdom, there have been rumours and counter-rumours about the disposal of PCBs from Western Australia. It always seems odd to me that the people of an enormous land area such as Western Australia are concerned about PCBs being incinerated in their communities, yet in this country, which covers a much smaller geographical area, PCBs are often incinerated--both in my constituency of Ellesmere Port and Neston and elsewhere. There have been debates in the House in the past about a similar facility in Pontypool.

The concern about the waste from Western Australia was brought to my attention by a Labour party member

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from one of the Knowsley constituencies who visited Australia in December 1990 and brought back a press cutting from the Perth Sunday Times, under the headline :

"UK ideal for WA waste".

I hope that the whole House would denounce that statement. The United Kingdom is not ideal for anybody's waste.

That press cutting contained some authoritative statements by senior officers of the Western Australian Administration, to the effect that large volumes of intractable waste needs to be disposed of, and that Cleanaway-- an Australian public company with a United Kingdom operation--had a high- temperature incincerator at Ellesmere Port, near Liverpool. On receipt of the cutting I had a series of exchanges with the directors of Cleanaway, the company involved. As the House knows, 50 per cent. of that company is owned by GKN and the other 50 per cent. by Brambles, the parent company of Cleanaway Australia. Brambles Australia sent a facsimile to Cleanaway, which was subsequently passed on to me by the technical director. In effect, it says that the cutting came from a minor newspaper and was not quite correct. It said :

"This article was one of many hundreds that came out in the press following the announcement in November of the government's decision not to proceed with a high-temperature incinerator at Corowa In summary, the article appeared in what appears to be a small regional newspaper following the decision on the Corowa site."

That statement gave a certain amount of comfort to people in my constituency and it was followed by a letter from the company, again making it clear that the Perth Sunday Times article was not known to the technical director. The letter said that the importation of PCBs into the United Kingdom was

"purely a matter of conjecture on the part of the journalist who wrote the article."

At about the same time, the shipping company Carpenteria International stated its intention to ship to the United Kingdom material for destruction at the ReChem plant at Pontypool, and also at Fawley.

I have discussed the matter with my hon. Friend the Member for Torfaen (Mr. Murphy), who regrets that he cannot be here for this debate on a subject dear to his heart. Unfortunately, he has had to attend a funeral today--I am sure that the House would wish to send our sympathy to him. He has told me that the situation in Pontypool causes concern equal to that expressed by people in my constituency. My hon. Friend and I are both determined to continue to campaign on the subject until positive results are forthcoming.

Despite the assurances that have been received, it is clear that plans are afoot to import into the United Kingdom toxic materials for incineration. During the general election campaign I was asked by the local media to comment on the latest news about shipments authorised by the Western Australia Government to leave Fremantle en route to the United Kingdom. I was pleased to be able to respond by giving an unequivocal assurance on behalf of my party, following discussions with my hon. Friend the Member for Dewsbury (Mrs. Taylor), the shadow Minister for environmental protection. She said in a press statement that Labour's manifesto promised that trade in toxic waste would be banned. That was not a spur-of-the- moment decision ; it was firmly contained in our manifesto.

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The current position is explained in a letter from Cleanaway which--coincidentally I am sure--I received this morning. A copy letter to local councillors was enclosed, setting out the details about Australian imports. It is clear that the imports will not necessarily be in large tonnages, but in dribs and drabs. The company clearly intends to import material half way round the world for incineration in the United Kingdom, close to a residential area. From my comments about Carpentaria's involvement in shipments to ReChem, it is clear that similar projects are under way which will affect the Pontypool area.

The position is changing rapidly throughout the world. In the United States, the Senate is now dealing in committee with the Hazardous and Additional Waste Imports Act 1991. In recent years, 89 less-industrialised nations have banned waste imports and many have called on the United States to stop exporting waste. The European Parliament has approved a ban on waste exports to developing countries and the EC has already banned all waste exports to former colonies in Africa, in the Caribbean and in the Pacific area. There have been many scandals over the years concerning the trade in waste. In the run-up to the Rio summit, let us now take a positive step and protect our people by boldly saying to the world that this trade must stop. I call on the Government, in the interests of the health of my constituents and in the interests of their peace of mind, to block any proposals now, or in the future, to import any toxic material into the United Kingdom for incineration or for any other method of disposal.

12.12 pm

The Parliamentary Under-Secretary of State for the Environment (Mr. Tony Baldry) : The hon. Member for Ellesmere Port and Neston (Mr. Miller) has raised issues of understandable concern to his constituents and I welcome the opportunity to respond.

I fully understand and share public concern about the general question of imports of waste for disposal. There is no question whatever of the United Kingdom being a "dustbin" for the world's waste ; there never has been and there never will be.

Waste comes here because we are equipped to deal with it efficiently, effectively and in an environmentally sound way. Some other countries, on the other hand, have been slower than us to develop their own facilities.

Notwithstanding our own abilities, we firmly believe that the international movement of waste for disposal should be minimised. In particular, we believe that all developed countries should become self-sufficient in the final disposal of waste and dispose of theirown waste arisings. That position is reflected in international legislation, including an Organisation for Economic Co-operation and Development decision- recommendation of 1988 and the United Nations Basel convention on the transboundary movement of hazardous waste and its disposal.

The disposal of waste throughout the world raises questions that can be dealt with effectively only by international action--by world action. The United Kingdom is opposed in principle to the continuing import of hazardous wastes from developed countries. In

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principle, imports of such waste should continue only in respect of developing countries--countries which may, for the foreseeable future, be unable to deal with such waste in a manner that is not detrimental either to the planet or to themselves. We must keep matters in their proper perspective. Only about 5 per cent. of hazardous waste dealt with in Great Britain comes from abroad.

The Basel convention, which came into force on 5 May, is a significant global advance in waste management and we fully support it. The United Kingdom signed the convention in 1989 and has pushed for the earliest possible implementation of its provisions within the European Community so that we can ratify it as quickly as possible. Basel has introduced a global system of controls on the international movement of hazardous waste. Parties to the convention must ensure the availability of adequate disposal facilities within their borders as far as possible and minimise transfrontier movements, ensure that importing countries are informed and give their consent before any shipments, minimise their production of hazardous wastes and provide for the environmentally sound management of wastes for which the parties are to agree guidelines.

At present the controls we have in the United Kingdom over the international movement of waste are those in the Transfrontier Shipment of Hazardous Waste Regulations 1988, which derive from European Community directives. They cover only hazardous waste and they prevent shipments only where these would lead to a breach of environmental or related controls-- for example, if waste were going to a facility not authorised to handle that type of waste. Basel is a development of and a move forward on those principles.

To implement the convention and to deal with other concerns about waste movements of all kinds, the EC has proposed a new regulation which will apply to all shipments into and out of the Community, with the exception of some non-hazardous wastes moving for recovery. We hope that the latest draft of the regulation will be agreed by the Council of Ministers very soon, even possibly next week, following several years of difficult and complex negotiations. We can then proceed as quickly as we can to ratify the Basel convention, in company with the rest of the European Community.

The feature of the current draft of most relevance today is that it will severely curtail the import of waste for disposal from outside the Community and EFTA, from countries such as Australia. Such shipments would be allowed only under a bilateral agreement with the country of export. Those agreements would be possible only where the exporting country does not have, and cannot acquire, the necessary suitable disposal facilities of its own. The aim is to restrict imports of waste to those from developing countries, and not from developed countries.

I understand that the Australian Government have granted an export licence to one or more companies in Australia for hazardous waste, including PCBs, from Western Australia. A contract with an authorised disposal facility is a prerequisite to that licence and Cleanaway has such a contract with one Australian company. But those companies would then compete for a contract to carry out the export. Precisely where the waste went for disposal would depend on which company won. This might be the United Kingdom which has three possible facilities

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equipped to receive PCB waste, including the high-temperature incinerator at Ellesmere Port, but it could be elsewhere, including France.

The United Kingdom has outstanding transfrontier shipment notification documents submitted from Australia under the Transfrontier Shipment of Waste Regulations 1988. However, there are no indications about whether they will be used to cover any of this particular consignment of PCB wastes, or where it might actually be sent--if it is sent at all. The Australian Government have ratified the Basel convention and will know that the convention requires parties not to send waste to non-parties, which currently include the United Kingdom. We are looking to the European Community regulation to encourage developed countries, especially those outside the Community and EFTA, to become self-sufficient in waste disposal, in line with our policy in this matter.

The United Kingdom is virtually self-sufficient in disposing of its waste. Records for hazardous waste exports show only 500 tonnes exported for disposal in 1990-91 and that traffic is to cease, thanks to the co- operation of the United Kingdom company involved. The majority of wastes that we dispose of in Britain are produced here. As I have said, only about 5 per cent. come from elsewhere. Our procedure for disposal licensing and pre-notification of the movement of special waste were forerunners in European legislation and in 1988 we were one of the earliest nations to implement transfrontier notification procedures for hazardous wastes under an EC directive. Incineration is an important waste disposal option.

High-temperature incineration employing state-of-the-art combustion and emission control systems provides an essential long-term secure disposal option for a broad spectrum of organic wastes, including PCBs. Of course, it is quite rightly a sensitive issue, but the public may be reassured that the tight environmental regulations that are applied to incineration--and, indeed, to all waste disposal methods--ensure that there are no dangers from the incineration process. Modern high-temperature incinerators are safe and do not produce highly toxic emissions as some have claimed.

Although alternative options are increasingly being investigated, and some are being developed commercially, they provide at present only a partial alternative to high-temperature incineration for a limited range of specific wastes.

Mr. Miller : I was concerned about the Minister's comments regarding the safety of modern incinerators. Can he tell the House the evidence on the basis of which that statement was made? The waste coming out of incinerator chimneys is a matter of great concern to my constituents, as is the chemical make-up and disposal of the ash.

Mr. Baldry : I can assure the hon. Gentleman that, in his constituency and elsewhere, incinerators are monitored, scrutinised, regulated and reviewed toughly and tightly by Her Majesty's inspectorate of pollution. If the hon. Gentleman has concerns about the effectiveness of the regulatory controls, he may wish to discuss them in detail with HMIP. I am sure that the inspectorate will be only too happy to go through with him the controls, standards and tests that it uses to ensure the highest environmental

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standards for incinerators in Britain and to ensure that they cause no danger to the hon. Gentleman's constituents or to the environment as a whole.

The alternative of storing waste that would otherwise be disposed of by such means presents its own problems of safe containment, to say nothing of the difficulties of choosing and agreeing a suitable location for storage. Even in the wide ranges of Australia, those issues do not go away. So the environmental impacts of using incineration need to be compared with the environmental consequences of using alternative disposal methods, such as landfill. Modern incineration can offer a good disposal route for these wastes in which the various release routes by which pollutants can reach the environment are tightly controlled.

As I said, the Ellesmere Port incinerator is registered by Her Majesty's inspectorate of pollution. Before a certificate of registration is granted Her Majesty's inspectorate of pollution must be satisfied that the operator is using the best practicable means of preventing harmful emissions and rendering harmless any that cannot be prevented. Later this year, the plant will be subject to the new controls included in part I of the Environmental Protection Act 1990. Under those provisions Her Majesty's inspectorate of pollution will apply integrated pollution control, which addresses releases to all three media. This entails looking at the best practicable environmental option for dealing with potential pollution from the process and requires the application of the best available techniques not entailing excessive cost--BATNEEC--to prevent or minimise the emission of prescribed substances and to render harmless other emissions.

I understand the hon. Gentleman's concerns, but the plant at Ellesmere Port has already demonstrated its ability to meet the new standards. It is fitted with comprehensive monitoring equipment for the measurement of releases and Her Majesty's inspectorate of pollution regularly conducts independent confirmatory exercises. We should not underestimate the effectiveness of our monitoring and controlling procedures or the standards of our waste disposal industry.

In addition, the European Commission has recently sent to the Council of Ministers for consideration a draft directive on hazadous waste incineration, which will introduce strict combustion conditions and emission limits across the Community. We welcome the move towards common tight standards in the interests of protecting public health and the environment and we shall be looking closely at the details. PCBs are chlorinated organic compounds, which, because of their stability and good die-electric qualities, have been widely used around the world in electrical equipment such as transformers and capacitors. They have subsequently been found to accumulate in the tissue of plants and animals and are probably carcinogens. Countries around the world are phasing out existing uses, and the United Kingdom is committed to doing so by 1995, and by 1999 at the latest. Disposal is by means of high-temperature incineration under careful conditions. Such incinerators are relatively few and far between, even in the developed world at present. The risks from PCB wastes should be properly understood. They are not instantly poisonous or highly flammable. The risks lie in their persistence and accumulation in the environment and also in the

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possibility of dioxin emissions if PCBs are incinerated under less rigorous standards than those used by our own waste management industry and its regulators.

In conclusion, the United Kingdom has extensive controls to protect the environment. We would rather not import waste from other developed countries outside the Community and EFTA, such as Australia. The Government are looking to the new EC waste movements regulations to limit such movements. Existing controls do not allow local authorities or the Government to prevent such imports if all the controls on movement and disposal are being complied with. But the Basel convention prevents Australia from sending its waste here at present, while the United Kingdom has not yet ratified the convention. That should encourage the Australian companies involved to look for other solutions.

Britain has played a leading role in persuading the international community that all developed countries should become self-sufficient in waste disposal. We are strong advocates of the importance of self-sufficiency and are determined that there should be effective global controls on hazardous waste movements.

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UNESCO

12.28 pm

Mr. Cyril D. Townsend (Bexleyheath) : I was privileged to have an Adjournment debate about UNESCO on 25 July last year in the previous Parliament. With your indulgence, Mr. Deputy Speaker, I wish to play this Adjournment debate in a slightly different way. If the House wishes to know my views in greater detail, I happily refer hon. Members to the appropriate columns of Hansard for 25 July 1991. I hope that this debate will be allowed to show the considerable support in all parts of the House for Britain's early return to that important international organisation.

The background is familiar to us all. In 1985, Britain decided to withdraw from UNESCO. I felt at the time, and have felt since, that that was a fundamental error. I am proud of the part that the United Kingdom played in helping to set up that organisation. I told the House last July that Britain had a

"dominant influence in establishing UNESCO at a preparatory conference held at the Institute of Civil Engineers in London Its secretariat was initially based in London. Its first director general was British and its constitution was deposited in London. Its accounts were audited by the United Kingdom Comptroller and Auditor General."--[ Official Report, 25 July 1991 ; Vol. 195, c. 1299.] I have no doubt that Britain was treated favourably as a founder member of that organisation.

We came out against the advice of the Foreign Affairs Select Committee. I hope that my hon. Friend the Member for Broxtowe (Mr. Lester), who was a member of that Select Committee, will catch your eye in due course, Mr. Deputy Speaker. We came out against the wishes of the officers of the Conservative foreign affairs committee and against the advice of those who took part in the debate with the exception of one hon. Member.

I hate the word "universality" : it is crude and cumbersome. However, it puts over an important concept. United Nations organisations are not for picking and choosing to suit the needs of any particular country at any particular time. There is no menu from which one picks one's choice courses.

I am pleased to see my right hon. and learned Friend the Minister of State, Foreign and Commonwealth Office in the Chamber on a Friday. My first basic point for him is that it is very much in the United Kingdom's interests speedily to return to UNESCO because all hon. Members present support Britain having a seat on the United Nations Security Council. We have played our part in that Council in recent years with great proficiency. In particular, I recall the special UN Security Council meeting that we initiated to discuss UN affairs. However, many countries feel that the time has come for Britain to give up its seat on the Security Council. Japan, Germany and the European Community are mentioned instead. Those countries and their diplomats argue that Britain has started to opt out of UN organisations, in particular UNESCO.

If we are successfully to defend our position on the Security Council, it would be prudent to return to UNESCO without delay. If we consult the education, scientific and cultural establishment in this country, it is clear that there is massive support for our rejoining

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UNESCO. Indeed, it is difficult to find a major organisation in that category that believes that we are wise to be playing it as we are.

My right hon. and learned Friend the Minister of State and I have used one argument in the context of the European Community : it is no use standing on the sidelines and shouting. We may not like everything that goes on in the Community, but we must get off the sidelines and on to the pitch and play our part. It is bizarre that in the context of UNESCO, we argue that we can better influence events by shouting to our supporters who have remained on the pitch. When we came out of UNESCO, the Commonwealth high commissioners made representations to the British Government. They said that they were being let down, as did our European Community partners. We have allowed the French, who are no slouches in this regard, to gain influence in UNESCO and to help spread the influence of the French language. Many Commonwealth countries, particularly in Africa, wonder what we are doing.

That is all I wish to say in introducing the debate. I believe that there is ovewhelming support in the House for recognising that a mistake has been made and for returning to UNESCO. That would benefit the United Kingdom and that important international organisation. 12.34 pm

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