Examination of witnesses (Questions 20
- 39)
WEDNESDAY 28 JANUARY 1998
RT HON
JOHN PRESCOTT,
RT HON
MICHAEL MEACHER
AND MR
JOHN ADAMS
Mr Grieve
20. I do not want to get bogged down in
details about housing developments, I appreciate there are difficult
decisions to be taken. On the one hand the Government has come
forward with really quite exciting proposals for a complete strategic
review about sustainability which includes housing and includes
considering a whole number of parameters, some of which you have
just touched on. Most housing development and planning tends to
be projected some distance into the future. You have a situation
at the moment where you are going through that strategic review
process but at the same time you are taking decisions, such as
the Stevenage decision or West Sussex decision, which are decisions
which once taken and inscribed within the planning process are
going to be written in stone and then will go ahead in some form
or other, but without the strategic overview having yet been arrived
at. I appreciate that is a matter of time and you need time to
do that. Is there not a danger that in fact you are taking decisions
now which are short-term before you have arrived at your strategic
review and may find thereafter that in fact some of the decisions
you are now taking turn out not to have been necessary? Could
some of those decisions not be deferred until your strategic review
has been completed?
(Mr Prescott) I am sure there are many times in
the short period I have been in this job when I would have liked
to have said "stop the world, I want to get off" and
I am sure I will have that experience many more times. If I could
answer specifically your question. I am required, of course, to
give answers or not give answers in a certain time as set
by the statute itself. I do not have the luxury of saying "stop".
I can either say "yes, I am going to do that" or call
the case in for my decision. Either way I have to do something.
If I do nothing I merely confirm whatever the inspector has said,
whether in the Stevenage case or in West Sussex. Therefore, the
timetable is partly given for me. I am sorry that I am not able
to get my statement out to make whatever changes I think are necessary,
but that is on the way now. Do not forget that most of those projections
for household growth, and all the controversy about projections,
have never been far wrong frankly in the need for housing. Population
growth, for example, has been predicted in many ways. Somebody
suggested to me that the Humber Bridge was based on a population
growth that did not materialise in the way it was expected. I
think in housing predictions we have been much more successful
in getting nearer to what was needed. I think the evidence is
clear about that. What we are talking about is projections for
2016. I do not see that all these kinds of decisions are cast
in stone as to how you achieve it, how the household growth will
take place. I think there is far too much of the argument driven
by politicians into a statistical debate about whether 50, 60
or 75 per cent of houses should be built on brownfield sites by
2016, when the whole thing could depend on how successful you
are in building houses in the city. That is where I am trying
to say our priorities should be. I do not feel that decisions
that are taken now necessarily will fail to be influenced by any
change in policy in my statement to the House.
21. I am interested to hear this. I appreciate
your difficulty and I appreciate, for instance, population growth
or housing need projections. Are these not the precise areas,
if we are going to be having sustainable development, which are
going to be addressed in the strategic review, and in particular
the extent to which the Government may be capable of influencing
housing demand and the areas in which it may be located, so that
we have two steam engines going off in slightly opposite directions
at the moment? Presumably you might agree, I do not know, but
if indeed we are on the continuous trend towards the sorts of
housing growth projections which you are operating on, the idea
of sustainability over a 100 year period rather goes out of the
window, does it not?
(Mr Prescott) I am not sure it does. The need
for housing presumably, whatever our environmental requirement,
is whether you feel happier living in the city than the green
fields and their wonderful environmental surroundings. It is a
balance, is it not? Presumably people do like to have a reasonable
house and reasonable accommodation in which to live, and we have
to balance that against the other requirements about where you
may live. My judgment is that we are far too pessimistic about
how many people might live in the towns and the cities if we were
to make them much more attractive to live in. Therefore, once
you get the decisions at the bottom right, the decisions as to
whether the proportion of new housing will come in urban or Green
Belt or countryside will be affected more by those decisions than
by trying to say we are going to enforce this kind of target——
I think on the projections for housing, even under the figures
that have been given—you said four and a half million—which
meant we have been building about 170-odd thousand houses a year
since 1991; under the previous administration about one million
houses had already been built—there will still be only be12
per cent of our land mass in urban areas by 2016. We already have
12 per cent as Green Belt. There is an awful lot of green area
left. I think we have got to look at the totality of it. I am
quite prepared to do that and that requires me to give an answer
to the House on my conclusions very shortly.
Dr Iddon
22. Can I turn to government targets and
setting targets for greening departments? Do you, Deputy Prime
Minister, believe that we need to set more comprehensive targets
and ensure that all government departments and indeed local government
departments adhere to these targets, targets for energy use, traffic
reduction, water conservation, recycling of paper and other materials?
Do you also believe that the annual reports ought to examine these
targets set at the beginning of the year and quantify the progress
that individual departments have made? Some departments are making
good progress; some are not. We are not all up to the same speed.
(Mr Prescott) Where you can use targets, I am
a convinced fan of them. We must be then measured against them.
Obviously, if you are not successful in achieving them, then you
must explain why. That very process concentrates the attention
on those making the decisions to do better next time. The targets
are important, and as you know with the water companies we made
it very clear to them that we wanted targets set for leakages.
We had to vary them from company to company. We knew the objective
we wanted to achieve. We also said "We want targets because
we want to measure your performance over this period of time".
We did not want to set a target of ten years and then find in
year nine they had not achieved it. The important thing with targets
is the auditing of them, the monitoring process. That is why your
Committee is so important. I think probably departments should
consider the objectives which have been set for them, measuring
how they have achieved them in their estimates and then being
challenged and perhaps interviewed by yourselves on those achievements
of targets. In transport, clearly, it is going to be easier to
do that; in other areas, it is not so easy. Certainly, in all
those, targets play an important part and we intend to see they
do.
Mr Truswell
23. Could I just follow up this discussion
about targets and objectives because one of the concerns I have
is that, unless they are fixed within good, effective, rigorous
environmental management systems, they are perhaps not as effective
as they might be. If I could just take you to paragraph 13 of
the memorandum that you submitted I hope I am perhaps being uncharitable,
but there appears to be a slightly lukewarm attitude towards management
systems and I wondered if you could just clarify how quickly you
expect key government departments to move towards establishing
environmental management systems so they do have this rigorous,
disciplined framework within which to operate. The paragraph also
makes reference to the fact that such systems have been of benefit
in the private sector, but there are examples, such as local government,
of where they have been applied within the public sector and I
think there are probably lessons to be learned. Could you give
us some idea about how you would want to roll out those management
systems, because the way it is phrased here perhaps does not convey
as determined an approach as you might want to suggest.
(Mr Prescott) We are as a department actually
preparing the policies for greening Government and targets for
each of the departments. That is the work we are embarked upon
now. Hopefully soon you will be able to make a judgment about
those targets set within the management systems to achieve the
objectives we have set. Obviously, with this kind of increased
importance being given to it and your Committee being established
to measure our performance, we need to have targets by which we
can say this was what we set ourselves and how successful we were
in achieving it and face your criticisms if we were not. It is
an essential part of the auditing process. It is much easier to
do it in the Public Accounts Committee because it is measured
in money anyway and you can make a judgment as to whether you
have achieved it or not. Here, we have got to develop a very important
environmental targeting system to allow management systems to
know what they are aiming for and to judge whether they are successful
or not. We are certainly doing that. It is a matter, I think,
as I said before, of changing the culture and attitudes on these
matters. With the establishment of the ENV Cabinet Committee,
I will be responsible for seeing that they achieve that. You will
be wanting to watch. I will be wanting to be sure that those departments
can come along to your Committee and give a good report on what
they have done. What I will aim to do, and we have already talked
about this, and what we have to recognise now—and this is
the importance of your Committee, I believe—is that you
will have to go before a public accounts committee in this sense,
the Environmental Audit Committee, and they are going to judge
you on whether you did it. All ministers like to think they are
being successful in their departments and we all hope that we
are, but that will be judged here in your Committee. I think it
is absolutely crucial that that is done, so the target system
is being arranged. Regarding local government again, if I take
Local Agenda 21 which came out of the Rio agreements for the sustainable
development programme, we relaunched it again. I think only something
like 50 per cent of the local authorities have signed up for it.
If I talk to some local authorities, some of them might say, "Well,
the Environmental Committee only looks after dogs fouling and
parks or something" and it is not given a high priority.
We do want to change the priority. Local Agenda 21 does allow
us to give targets for local authorities to set up a strategy
for action. When we come to the Transport Bill in traffic management,
we will want to look at targets. Indeed, those targets are involved
in one of the Private Members' Bills we have before the House
at the moment. I am a great believer in targets. They sharpen
up management and once people are accountable, as they are through
your system, it will do a great deal of good bringing about the
greening of Government. Politicians say, "That is what we
want to achieve"; we are now saying, "We are quite prepared
to be measured by it".
(Mr Meacher) Can I just add to that? As John has
said very forcibly, we are very keen on targets. He himself said
in answer to the previous question that very important targets
are laid down in water. We have also done the same with regard
to air quality. We are urgently reviewing the National Air Quality
Strategy. We have passed the Air Quality Regulations[5]
which has initiated a system of local air management. More particularly,
we do intend, as part of the Sustainable Development Strategy
Paper at the end of the year, to include a list of targets and
indicators there. I am extremely keen that it should not just
be a sort of archival list of 120 targets which gather dust without
really being monitored and checked, but it should also include
a key set of core indicators which are resonant with the public,
which are measurable in a precise way and which I believe could
give as much salience to social and environmental objectives as
we currently have with economic goals like balance of payments,
interest rates and unemployment. I think that is extremely important.
Could I just say we are extremely keen to strengthen and make
robust environmental appraisal systems. We are doing that in various
ways. The KPMG report[6]
which was published last year did indicate that the 1991 guidance
to departments called "Policy Appraisal and the Environment"
did need a simpler guide for policy makers. We are hoping to launch
the first of a number of documents to achieve that in the next
few weeks. It is also true that, under a procedure for ministers
which was issued in July 1997 shortly after we came to office,
the memorandum for Cabinet and ministerial committees should give
details of significant cost benefit effects in respect of the
environment. There is a very determined attempt to instill into
departmental and cross-departmental thinking specific, manageable
targets which will be monitored and indeed checked by you but
also by us, including the Green Ministers. Indeed, Green Ministers
are committed to doing regular, collective reviews of the quality
and scope of environmental appraisals in their departments, so
there is a great deal going on to achieve these purposes that
you speak about.
Chairman
24. Are those environmental appraisals available
to this Committee?
(Mr Meacher) They are not at the present moment
of course yet undertaken. If you ask for them, I am sure we would
release them to you.
Mr Thomas
25. I welcome what you say about targets
and in particular the drive to get environmental targets given
the same attention by the media and across Whitehall as economic
indicators. I wonder if you could say a little bit more about
how you intend to monitor those targets within Whitehall, perhaps
before we start getting our teeth into those targets. Will, for
example, the Cabinet Committee be monitoring the achievement of
those targets across government? Will the Green Ministers' group
be looking at each others' success in meeting those targets?
(Mr Meacher) That is primarily a matter for Green
Ministers. As I said, Green Ministers have the responsibility
for making sure that systems are effective, that they achieve
the policy goals which are set by the Cabinet Committee. Of course,
it is a matter for departments themselves and the Secretaries
of State of those departments to ensure that the environmental
objectives which apply to their departments are achieved. Green
Ministers are not a set of green policemen. Our job is to ensure
that people think environmentally and set targets, which we will
certainly look at and comment on and the Sustainable Development
Unit will certainly take a view on, but it is for them to implement.
That is the kind of thinking that we want to see through Whitehall.
It is not all done by our department; we want all departments
to do it themselves.
(Mr Prescott) I think also, addressing one of
the weaknesses in these matters, we can come along to you and
say, "We chair this committee and these ministers are doing
their jobs. Then they have to go and talk to their Secretaries
of State", and all the kind of departmental projects that
will face ministers who are not the Secretary of State with regard
to junior ministers involved. Your opportunity is to pick those
that you feel you might want to examine to see how well they are
doing; what difficulties do they find when they have agreed it
in the council and they go back to their department and say, "Yes,
we have heard what you said about that, but we have got this kind
of priority"? The measure of success is how effective they
are in going into their department. I am going to be one of the
people saying, "What are you doing?" They are people
I am going to issue targets to to see how they are doing and I
am going to be using this Committee to say, "You are going
to the Environmental Audit Committee. I hope you can explain it".
Chairman: We are all
going to be leaning on them very hard indeed.
Mr Robertson
26. Can I move on to green taxes and government
policies?
(Mr Prescott) I cannot say anything about taxes!
27. Nobody else will either! Generally on
government policy, Mr Meacher made a comment earlier on about
sustainability meaning satisfying the needs of today without compromising
future generations' needs. I do not think it is possible of course
to satisfy the needs of today in a sustainable way. I think we
have to give something up or else the whole thing will not work.
I do not think we can satisfy ourselves and preserve the environment
for the future, but is the government going to be prepared to
apply taxes in this way? It could work either way. They could
either get less revenue, in which case that is going to be difficult
for them but it would encourage sustainability; or it could work
the other way. There could be certain taxes applied or tax reliefs
given and so on and so forth. There are two ways of looking at
it. Some might lead to less government revenue; some policies
might be unpopular, but if the government is really interested
in sustainability that is the sort of thing it is going to have
to do. Are they prepared to do that?
(Mr Prescott) I think in regard to taxation we
have to think of the Chancellor of course and his priorities in
these matters. It is the same for any government. The Chancellor,
in his statement of intent on environmental taxation, in the Budget
statement of July 1997, said that the growth should be environmentally
sustainable. He was quite prepared to look at the fiscal framework
to achieve those objectives. That is not unique. I think the previous
administration started the landfill taxes and other matters. We
have made it clear with the duty on petrol and other forms of
fuel. We have also indicated that, in the areas of aggregates,
I think in the last Budget, we said we were reviewing that and
the possibility of water pollution charges. You have to make a
judgment on these matters but I have no doubt, if you are following
the line anyway that the polluter pays, you are involved in some
kind of taxation. That is a general principle that is applied
to all governments and is still relevant to a number of situations.
If you want to use economic instruments, whether as incentives
or sticks, in order to achieve objectives, the arguments about
whether you want to get more growth in green belt areas or more
growth into the urban areas and whether you might pay for that
from that kind of tax from houses that may well be built in green
areas are another consideration. The other principle of course
is the old argument that goes on about hypothecation. I think
it goes on in every department and you, Chairman, as an ex-Minister
will recognise this, and I have heard the question constantly
from within government, as to whether there should be a connection.
Interestingly enough, whilst Treasuries have been always prepared
to consider new ways of raising tax, they have not so easily agreed
to how it should be distributed. Those issues are very much to
the fore in transport and very much to the fore in environmental
issues. They are certainly very much to the fore in the minds
of people who have to pay the taxes, who often are a little bit
more disposed to pay it if they know it is going to go in a certain
direction. That is at the heart of any transport issue at the
present stage. These are the general principles. Yes, we do see
taxation playing a part in those. It is not unique to this government.
We are giving a little bit more impetus to it. That is perhaps
because environment is becoming more and more important in these
issues. Certainly that will be playing a major part in our considerations.
At the end of the day, we are the ones that designate the policies
in these areas. The Treasury makes the decisions but it requires
very close cooperation with us and we will see how successful
we will be with that in the future.
Mr Blizzard
28. Governments can have all sorts of policies
and governments can organise themselves in various ways. History
perhaps shows that, unless they really win the hearts and minds
of people, change is not effective. I wonder what systems you
have in place to really win the hearts and minds of people on
environmental sustainability, and I mean really win the hearts
and minds because, as we know, a lot of people sit in their cars
complaining about all the congestion and everybody using their
car. There are lots of people who sit on the edge of the green
belt, looking over the fields and saying they do not want it built
on just because they would like that field themselves.
(Mr Prescott) These are important issues. I do
not think that we are ahead of the public on these matters. Frankly,
I think they are ahead of us and they have been for a while. It
requires us to make some rather courageous political decisions
which are not always popular. Look at the controversy that surrounds
any tinkering around with regard to household growth that we have
seen in the last few days. The policies are controversial. Probably
they should be and a proper public debate should take place. It
is up to the politicians to be clear about what they want to do,
what those objectives are and to convince people of them. You
have given me a good example when you talk of cars and public
transport and whether people will make the choice to move from
a car to public transport. I often think of the example here along
the river. My bus comes from Clapham, the number 88. We come along
and we see buses waiting to get a space, caught in what is supposed
to be a bus lane because cars have nipped in to the front by the
roundabout; the bus gets held up by the cars. I have no doubt,
if you improved the priority for that bus, not only would it be
good for the bus, but for all public transport and for the environment;
I do wonder though whether the car driver may necessarily get
out of his car. What they usually say perhaps is, "I want
public transport if the beggar in front of me will get on the
bus so that it will be quicker for me to come in by car".
I think you are going to have to make judgments about that. My
priority is to give higher priority to public transport, to give
higher priority to the mobility, frequency, reliability and availability
of the public transport system. If a bus is whizzing past people
while they are stuck in their car, they might think: well, I will
leave the car and get the bus because it is reliable, or I will
use the underground because it has now been invested in and it
is reliable and a good service. You have to show the change to
encourage the public that it is working that way. There is one
other aspect of it, I think. If you look at exhaust gas emissions
and how we are actually polluting the air in our cities, most
people are now beginning to get extremely worried when they see
the deaths[7] that occur
from this kind of pollution and they recognise that the dirty
end of the pollution is at the lower level in our city areas.
It is our young children who are going through it and we have
to do something about it. I think when they read those kind of
figures and statistics, they say, "Time for change".
It is time for change and I hope to meet it.
Mr Loughton
29. I agree with most of what you say but
I want to get back to more fundamentals on green taxes and the
question of integrated taxes with the way we build our houses
and the way we put people in boxes. I am not trying to rake over
old ground. Of course, landfill tax, the way we put extra duty
on petrol, the way we use tax advantages for public transport
are all very important, a bit more than tinkering, as you said
just now. However, if we are to address the problem of how we
are going to put these people into houses—apparently we
will have the forecast figures—are you prepared and do you
think that it is the role of your department to be rather more
socially interventionist? The problem is going to be that more
people essentially are living alone for a whole variety of reasons,
as we know. Do you think the DETR should be proactive in telling
the Treasury that, in order to get away from this problem of 4.4
million new houses, we need to have very positive, very savage
perhaps, tax disincentives for people to live alone? You can do
that for a multitude of things. On the one hand, you can be exceedingly
draconian and you can say that anybody who lives on their own
will be subject to a £5,000 fee for doing so—I am sure
you would never envisage such a policy—or, you can increase
the council tax charge, treble it or whatever, on empty properties
empty for longer than a certain period. These are socially engineering
interventionist policies. Do you think your remit travels that
far or really are you saying that what your department is about
is different emphasis on different sorts of taxes on different
elements that might help a bit here or a landfill site there;
and really what we had before dressed up in even more green paper?
(Mr Prescott) I am not against a form of social
engineering that improves the lifestyles of people, whether it
is in housing or education. I think that is what government is
about. They can make judgments about it. I certainly would think
twice before saying, "Thou shalt not live alone". I
would be very unhappy about saying you could no longer break up
as a married couple because you are affecting our household growth
figures; and that it is a pity that perhaps men do not live as
long as women and that is affecting our household growth figures.
I would have some trepidation before I would go down that road.
I do not know whether it has been considered by the Honourable
Member, but the issue is an important one. It is about providing
homes. Targets we can talk about but I really do believe that
a lot more can be done to encourage people to live in our towns.
There is a lot more space to be able to do it. If the economic
instruments are there to be able to make sure that the building
on brown field sites can be cheaper than it is at the moment,
and we can encourage proper, good quality housing in our cities
and we can retain our playing fields; that regeneration plays
its part in bringing people back into the cities, then I do believe,
yes, in that kind of engineering whereby we can influence people
to live in one area rather than another. If I look at Hull, my
own city, where there is a town dock converted into a marina,
my own local authority took the view, having had tremendous bombing
during the war, that all the people would live in green sites.
They bought all the land around the city, which resulted in what
may now be called urban sprawl, and now the difficulty is that
out in that area there are high levels of unemployment; the transport
is so expensive people cannot come into the city. There are great
social problems now coming from a judgment that was made at that
time in the interests of people living out in the country, but
the town centre was completely denuded. Now we have restored the
land through regeneration under the last administration and a
lot of the money went into developing the town docks—all
of a sudden, warehouses that were decaying became desirable sites
for housing, in some cases with room sizes that we would not allow
normally in housing accommodation, but they came back; the city
became alive with all the services that were depended upon in
transport and in housing. I have no doubt people would like to
come back. If I look at Birmingham, once it stopped being "car
city" where the roads went through everywhere and they established
a heart with pedestrianisation, that city began to come alive.
All over Britain, through the regeneration programmes, with the
previous administration, there has been that effect. I believe
you can build on that and I would sooner do that kind of work
which I think is highly important. It will meet the needs of people
who want good quality accommodation, whether they live in the
city or whether they live in the country.
30. I take that on board and I certainly
do not want to be quoted as having advocated the particular policy
I mentioned. I am purely testing your parameters and seeing what
you are prepared to stick your departmental nose into. Will you
give an undertaking? Are you prepared to give an undertaking that,
whatever taxes are raised from green field levies, say, should
be wholly reinvested into brown field costs; that there should
be a no sum gain to the Treasury and that everything should stay
within sustainable environmental development?
(Mr Prescott) I have been an advocate for an awfully
long time of hypothecation in certain circumstances. I do not
change my view about that point. It is a decision that will be
made by government and particularly the Treasury. I could not
give you an undertaking. I am sure your Chairman would say that
every minister who sat in this spot and was asked that kind of
question would give that response and that reply. But I go a little
further and say that I have been an advocate, certainly in transport,
for the best part of ten years—we even got some of it in
one of our manifestos once, about charging in Cambridge, I think
it was, where they wanted to increase cycling and public transport
and put a charge on cars. I was quite prepared to do that, provided
the money went into improving public transport and not providing
more car parking spaces. I think those kind of judgments need
to be made and they are increasingly coming more and more to the
fore. I am more convinced of that view now than I was before,
but the Treasury will obviously make a decision and we will advocate
our case.
Dr Iddon
31. Can I just focus, Deputy Prime Minister,
on one specific tax—and that is the landfill tax—and
ask your department whether it has reviewed how this is operating?
In the eyes of some members of the public, it has two detrimental
effects. First of all, the cowboys who will not pay dump more
on the landscape. Secondly, it is forcing the waste disposal authorities
to go towards incineration, which is not popular, particularly
if the incineration plants are close to population. I am asking
you if your department has reviewed this policy?
(Mr Prescott) I will ask Michael to say something
but it is a very important area. It is again the environmental
balance of arguments about incineration or whether you bury it
in the ground. Of course, you are affecting that choice by the
way local authorities have to pay for either land use or incineration.
It is a very important issue. There are environmental implications
and consequences whichever route you take. Perhaps Michael, who
has been actively involved in that, could give you a more informed
response.
(Mr Meacher) We are reviewing it, or rather, because
it is a tax, it is Customs & Excise of course who are doing
so in consultation with us. It came into operation on 1 October
1996 at a rate, as you know, of £7 per ton and £2 for
inert materials. As Gordon Brown, the Chancellor, did indicate
in his first Budget, he is looking at it and it is of course for
him to come forward with further proposals at a time when he decides.
We are also looking at two other matters related to it. One is
the impact of the Landfill Directive from Europe, which has very
powerful influences on landfill in this country. We have in the
UK one of the highest levels of landfill for municipal solid waste,
because of our geology, probably I think anywhere in Europe—it
is 85 per cent—linked with one of the lowest, if not the
lowest, level of recycling[8]
which is about a national average of six per cent. There are certain
areas of the country which are up to 25 per cent but the national
average is six. We are extremely anxious, in line with the pressures
which are now being exerted by the Landfill Directive, to reduce
landfilling substantially and to increase recycling substantially.
Indeed, the limits on organic waste which could be put into landfill,
which were set down originally by the Draft Landfill Directive,
which were that there should be no more than 75 per cent by 2002,
no more than 50 per cent by 2005 and no more than 25 per cent
by 2010, would indeed have had the exact effect that you have
referred to. Because we could not increase recycling fast enough,
it would lead to a huge increase in incineration, which would
be costly. It could even be of the order of £3 billion to
£7 billion according to departmental estimates, a big increase.
I think there are half a dozen incinerators at the moment. That
number might have to rise to 50 or more. I am very glad to say
that, as a result of patient and persistent negotiation in Europe,
we have achieved a very substantial extension of those timescales
which will reduce, substantially in our view, the amount of incineration
that is required to meet those targets. You are absolutely right.
We do need to see a reduction in landfill and a big increase in
recycling. Can I just mention very quickly one other point, which
the Customs & Excise are also examining, and that is environmental
bodies? These were also introduced by the last administration
under the Landfill Tax Regulations 1996. I actually do think it
is a good environmental tax. It does allow 90 per cent of the
tax costs for the landfill operator to be refunded if that money
is paid over to an approved environmental trust for approved environmental
schemes, subject to a maximum of 20 per cent of his overall landfill
tax bill for the year.[9]
We believe that it has worked well but we are reviewing it and
we shall certainly be making a further statement on how that can
be taken further forward.
Mr Dafis
32. On green taxation, the distributional
effect of any decision to internalise environmental costs is something
that is going to become a much more prominent issue. Of course,
it arose with the issue of VAT on domestic fuel and power in the
last government. Can I ask you two things? First of all, on VAT,
is it the government's intention now to reduce VAT on energy efficiency
materials right across the board, not just the ones that have
already been announced? More generally, if you are going to be
considering extending perhaps or continuing the escalator on vehicle
fuel consumption, is it not important for you to understand that
there might be important, negative effects on low income families,
for example, in rural areas? The Institute for Fiscal Studies
published something recently which indicates that the effect is
very, very substantial on low income families and not at all substantial
on high income families. We need a process that puts the whole
package together and if we are going to internalise external costs—and
I can see the case for that is very strong—then we need
compensatory mechanisms to be built into the package at the same
time. We need, therefore, a comprehensive look at green taxation,
without moving into individual decisions as the opportunity arises.
(Mr Meacher) I have a great deal of sympathy with
that argument. It is true that the road fuel price escalator,
which we inherited at five per cent, we have increased to six
per cent. It is a substantial increase in the price of petrol
and diesel each year. You are quite right that the distributional
effects, particularly on poorer families or those living in rural
areas where, I am afraid as a result of transport policies in
the past, they are often bereft of any opportunity to use transport
other than a private car, are something that we have been giving
serious thought to. It is a significant and difficult issue but
I entirely support the principle of what you are saying. On the
VAT question, we have brought down VAT on energy efficiency materials
in government grant aid schemes to five per cent, as you know.
That will, for example, bring about an extra 40,000 or so HEES
(home energy efficiency scheme) installations per year, which
I think is quite helpful. We would like to see lower VAT extended
further but we have to negotiate that matter with Europe and that
is where the matter now stands.
Chairman
33. We have talked a lot about tax. Just
looking for a moment at the spending side, you are very well aware,
as the head of your department, that there is a comprehensive
spending review underway at the moment both collectively, through
the government, and individually, in each department. How are
those reviews in each department taking account of sustainable
development considerations, and are they?
(Mr Prescott) I think that, once we discover where
these extra resources are and the order of priority, that is the
time to make that decision. I will very much be arguing the case
for the environment and sustainability. I think the purpose of
looking at these reviews is to see where the money is spent, can
we do it better and then, of course, when all departments have
done that, there may be some judgments to be made about whether
we want to redistribute those resources. They are decisions the
government will have to make. At the moment, we are reviewing
the departments' expenditure, looking at the best way of doing
it and we are even in the process, for our own department, of
saying whether the order of priority of change in regard to environmental
expenditure, in a very big department like mine spending in many
areas, and also in the local authorities. The essential decision
will come once we have completed the reviews. My department will
be going away in about a week's time to look at all those assessments
and to make those kinds of judgments.
34. I am not worried about your department.
I am sure it will do well. It is the Home Office, the Health Department
and the Social Security Department. Are they taking account of
questions of sustainable development in the decisions they are
taking in the comprehensive review?
(Mr Prescott) At the moment, they are identifying
whether they can produce their particular services as a department
better than they can at the moment. The essential question which
you rightly point out is, if the balance of priorities is delivering
service as they see it, will the arguments about environmental
sustainability affect those priorities? I hope it will. That is
precisely what the Green Ministers should be doing. We have extra
checks against that. One is the Environmental Committee I chair
and of course, as the Deputy Prime Minister, I shall have some
influence on the priorities of overall government expenditure.
Since I carry that title of the Environment Secretary, I shall
certainly see those priorities into the fore. If I fail, I am
sure you will be biting my leg, as I said at the beginning. I
do want to be a successful politician so I shall do my best to
see that I achieve it.
Joan Walley
35. Can I come back for a moment to policy
appraisal? How well Green Ministers can perform that task depends
upon the parameters of what has been set in the first place. Earlier
on, Michael Meacher touched on the whole issue about economic
appraisal and how it is linked to environmental appraisal. Take,
for example, three issues going on at the moment. Local authorities
are currently preparing structure plans that are going to take
us up to the next however many years. There is already a recommendation
from the government officer for the West Midlands that the M6
motorway should be widened between junctions 11 and 16. Take,
for example, also the debate which is going on about sulphur dioxide
emissions. It comes back to how we can effectively, as well as
having environmental appraisal, actually put these environmental
objectives into the heart of the policy making and how we have
the mechanisms then to judge that what we put into the policy
making process can then be seen to be complied with at every stage.
I still do not see how you are actually going to make sure that
that gets put in within the next 18 months while these short term
decisions are still going ahead under the old way of thinking
and not under the new way of thinking.
(Mr Prescott) Of course there are problems from
transition. If I asked you precisely what you think you will be
doing in six months as a Committee and how you will be approaching
it, I do not believe you could be sure any more than I am that,
in this period of transition, we are clear precisely how that
will happen. To take your specific question, if you take the recommendation
of the government officer in the Midland area that there should
be a widening of the M6, I think we made it absolutely clear that
we are now reviewing the road programme. It is not a predict and
build system. We are now talking about different criteria for
that. There will be a report after the White Paper to the House
on the completion of that road review. Also, we have made a decision
in regard to dealing with that particular problem. It might not
solve everything as a solution in that area of road transport.
You cannot solve it just by building roads. I think we have all
come to that agreement. We did agree the new road, the Brimingham
northern relief road, and in that case we took into account a
number of factors. One was that congestion point. You have to
complete some of the strategic parts. Because of the difficulties
of the M6 being built and it not being easy to widen it on the
sections near where it meets the M5, we had to make that decision.
It was all connected to rail and freight as well in that area,
so we made the decision. It was controversial. It involves the
possibility of a toll on motorways as well which raises matters
of how you pay, so in that sense we are in a different policy.
There is a bit of a conflict between what they might want at one
level using predict and build and what we are actually saying
as government. I would also say that Kyoto is going to make a
phenomenal difference. If we set ourselves a legal target, I do
not think it has dawned on an awful lot of departments yet but
that is something we do with environment. They are going to find
that if government is committed to signing up, as we will do in
March, to those legal targets, quite apart from the higher target
we have set for ourselves, then we will be measuring departments'
performances and priorities against the legal objective we set
in signing up internationally, if it is ratified. Those targets
will concentrate minds. It is not just for the Department of the
Environment, Transport and the Regions. Every department in one
form or another is going to be affected by it. When you do that,
you will begin to have a very important effect upon the assessments,
the judgments and the decision making process which at the moment
are still caught on the slow track and the fast track. We hope
to bring them together.
36. On the whole issue of transition, I
think it is important that that advice actually underpins the
basis on which civil servants are currently making recommendations
to ministers.
(Mr Prescott) I agree with that. I get recommendations
from civil servants in my own department, not necessarily reflecting
what I think is the true environmental priority, but it is a process
of change. I have had to bring together the Departments of Transport
and Environment. We thought that was right. We think the integration
of the departments makes a very important environmental statement.
I am bound to say that the two departments did not in the past
arrange to meet very often to discuss essential issues about planning,
roads and everything and that is why we brought them together.
Even in my own department, there requires a certain culture change.
Things are changing. We are doing our best to effect that change
and you will measure our performance.
37. If I may, in terms of the appraisal
which Michael said could be made available to this Committee,
could we also have the basis on which recommendations are being
made in respect of environmental appraisal when it comes to the
widening of the M6?
(Mr Prescott) I think this is a very good example
where we would like to cooperate fully with the Committee and
any request you make will be given serious consideration. I offered
you something else before as well: the possibility of a closer
liaison with the department and yourselves in these matters. If
there are people who want to specialise in certain matters, I
am sure my ministers are available, as well as the department,
to help you understand how we are approaching it and for you to
be able to get access to more detailed information than you may
do from periodic examinations.
Joan Walley: Through
you, Chair, I would like to take that up.
Mrs Brinton
38. I wanted to take us back a little bit
more to the question of local government. I am pleased that the
Deputy Prime Minister has actually singled them out and said that
they must have strong targets, but what I want to ask him about
is how they are going to be monitored. Going back to the question
of energy, the previous government did in fact set targets on
energy efficiency and for about two years hence. There was no
check or balance at all on how those were going to be monitored
so they were completely and utterly useless. Also, it is not just
a question of perhaps monitoring or indeed setting targets. How
do we bring local authorities to account and how do we say, "Look,
this is not good enough. How are you going to get better?"
Are there going to be penalties or sanctions in any way? It is
no good just rapping them over the knuckles and saying, "Do
better next time", because they will just carry on in the
same way.
(Mr Prescott) I would like to think that they
desire to be cooperative with us on these matters. I think Local
Agenda 21 identified sustainable development priorities for local
authorities. Over 50 per cent of them have actually signed up.
I addressed them, I think about a fortnight ago, asking if more
of them now would sign up, and in their programmes to us, in all
the areas where we have to agree their public expenditure proposals,
we can have some influence. I take the example of traffic management.
In our cities, if you want good air quality or if you desire better
public transport or the movement of motor vehicles, they are going
to be targets. Local authorities will obviously have to fill out
their transport plans to achieve those objectives, so you are
able to say to them, "Look, this is what government wants
to achieve but you are the agent of delivery", because the
solution is not the same in every city. Central government can
set targets, but I do believe it is important for local authorities,
in partnership with us, to help deliver them. We cannot do it
on our own. The local authorities are absolutely crucial for that.
I do not want to be going in with a big stick. I do want to discuss
with them what the objectives are and I have no reason to believe
that they will not implement them, certainly when they are on
brown field sites. There is now an audit being done of all the
brown field sites and areas. There are big arguments about making
judgments on how many people living in the city are in the green
belt area. We do not really know and yet there is a whole national
argument going on about this fact. We do not have the information.
I want to work with the local authorities. Local Agenda 21 gives
me an excellent opportunity to put environment and sustainable
development at the centre and I hope councillors will in future
want to sit on an environment committee as eagerly as sitting
on the resources committee. That is what we seek to do by Local
Agenda 21.
Mr Savidge
39. Do you think there will be any advantage,
Deputy Prime Minister, in considering setting up a green tax commission
to actually look at broad policy and see if it is possible to
look for consensus on potential environmental taxation?
(Mr Prescott) I am sure it is an ideal situation
for your Committee to be examining the departments about their
role in fiscal matters. The Royal Commission on Environmental
Pollution has looked at green taxes in the context of their two
recent reports on transport. I might say there have been some
very good recommendations out of the Royal Commission on precisely
about this point on tax and how it is related as an economic instrument
to achieve environmental objectives. Setting up a Commission takes
quite some time, in order to get involved in that, and I think
the subject of green taxes is an ideal one for this Committee
to consider. I think it is an ideal forum to debate the things
we are doing. A debate has started and the government will have
to respond. The Chancellor has already done that by saying that
it is an important element to his decision of raising taxation
in this country.
5 Note by witness: The Regulations are set in
S.I., 1997, No. 3043; these require local authorities to assess
air quality in their areas against objectives set for seven key
pollutants, and take action where there are problems. The objectives
set in the Regulations for benzene, 1,3 butadiene, carbon monoxide,
lead, nitrogen dioxide, PM10 and sulphur dioxide are the same
as those set in the National Air Strategy. The Strategy also contains
an objective for ozone. This has not been included in the Regulations
as local authorities are unable to control levels of ozone in
their areas due to its intenational/transboundary nature. Back
6
Experience with the "Policy Appraisal and the Environment"
Initiative, July 1997, DETR. Back
7
Note by witness: The Department of Health Committee on
the Medical Effects of Air Pollutants recently concluded in their
report The Quantification of the Effects of Air Pollution on
Health in the United Kingdom that between 12,000 and 24,000
vulnerable people may be brought forward and between 13,000 and
23,000 hospital admissions and re-admissions may be associated
with short term exposure to air pollution each year. Back
8
See supplementary memorandum. Back
9
Note by Witness: Under the tax, landfill operators may
claim a tax credit worth 90 per cent of any contribution they
make to an enrolled environmental body for spending on an approved
project, subject to a maximum credit of 20 per cent of their landfill
tax liability during any one tax year. Environmental bodies are
registered by an organisation called Entrust who also approve
projects. These can be for a range of environmental purposes including
land reclamation, research into and development of waste management
practices and the provision of public amenities in the vicinity
of landfills. Back
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