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Mr. Rowe: My hon. Friend had left the Chamber when I pointed out that the Government's response to the report
noted that if there were a disagreement between the agency and the Government, they would expect that to be discussed before the agency went public. We are all aware of the extent to which Governments can twist arms.
Mr. Loughton: I am grateful to my hon. Friend for making that point; he is right.
I do not see what the problem is. If we are to respect the agency for the objectives that we set for it, our aim should not be to muzzle it. Whatever twist of language the Government use, what they have been talking about constitutes muzzling.
The Select Committee on Environmental Audit, on which I serve, has certainly not shied away from publishing damning reports, even with its in-built Labour majority, in its role of scrutinising Government policy across Departments. That has proved to be one of its strengths, and long may it continue.
I shall deal with some of the specific criticisms in the report. It refers to allowing the agency to regulate industries in a more flexible way on a sector or cross-sector basis, or companies on a company-wide basis. That has merits because one-size-fits-all regulation is often not appropriate, especially if it does not acknowledge existing best practice in certain areas. It has merits especially as--however much we might object--the Chancellor of Exchequer is considering exemptions and agreements for reductions, on an industry-by-industry basis, when he eventually applies the energy tax if the agreements are reached by the next financial year. Such proposals would fit that type of regulation.
The second criticism is about what I call the "not me guv" mentality, to which the report refers. The report queries the responsibilities of different sections of the agency. There is precious little co-operation between relevant departments, and matters are pushed around from one department to the other. The Committee comments that perhaps the agency should create a team of specialists in particular fields, who are easily identifiable by their customer base. That is a strong recommendation.
There is cross-cutting across local authority boundaries. A great deal of waste and a lack of accessibility is caused by dealing with so many different departments, all with a degree of overlap. The agency is not so much a one-stop shop as a multi-shop department store spread across many sites.
Another point, which is not made in any great detail in the report, is that £108 million--almost a fifth--of the Environment Agency's budget, which is now up to £623 million, is spent on administration and a further £13.5 million on pensions, compared with the £156 million that is spent on capital expenditure and investment. That suggests that we are not getting value for money, given the cost of administration compared with that of delivering serious results, the capital spend and the investment in environmental control. Perhaps the Committee will return to that point, because it was not dealt with in much detail.
Another criticism involves the management, staff and charging structures. Having worked with the Environment Agency, the south-east area office of which is based at Worthing on the edge my constituency, I agree that it has a fully committed staff. I have nothing but praise for the way in which the people with whom I have dealt at the agency have executed their functions, especially during the recent
flooding problems, which we have experienced so badly in my part of the world. However, low morale is certainly an issue, and high staff turnover can only decrease the agency's effectiveness.Perhaps the familiar idea of the poacher and the gamekeeper applies. Much more attractive financial rewards are available in the private sector, which is trying to recruit people to avoid being hit by the regulators. A good analogy is the financial services world, which I know well, where, because of the growth in regulation--some would say over-regulation--there is a shortage of qualified staff. People can virtually name their own price, as individual private firms bid for them so strongly, leaving many vacancies in the official regulator. When trained, its staff tend to leave and enter private practice. That problem needs to be addressed.
We need to look at the management structures--not least at this matrix management business--but not at the expense of simply jacking up the charges for the regulated customers, particularly as the standard and speed of service often leaves a lot to be desired, as the report states. We need to be able to offer value for money. As my right hon. Friend the Member for Suffolk, Coastal said, there is a simple formula by which the Environment Agency's charges cover its costs. If its costs go up, so do the charges. That is no incentive in terms of the charges that it can levy, which people have to pay.
I like the idea of incentive charging. Again, we have lessons to learn from the world of financial services, in which firms that have earned a good reputation for compliance and customer service are inspected less regularly, although they will still suffer the full rigours of the disciplinary process if they commit a misdemeanour.
That fits in well with the vision of the agency's new chairman, whose consultation document says that the agency will rightly be assessed by the lack of need to take enforcement action, not simply according to the frequency with which inspections take place. The hon. Member for Denton and Reddish and my right hon. Friend the Member for Suffolk, Coastal made that point, which I strongly support.
I am slightly unclear about the report's intentions regarding penalties for offenders. At one point, it refers to the naming of offenders as a "hall of fame" exercise and to a "serious lack of judgment" and "seeking cheap publicity", but then it says that the Committee is very much in favour of the concept of naming and shaming. There seems to be a slight contradiction.
Mr. Bennett: If we are going to name and shame, we have to get it right, so that the shame sticks and it is not possible for someone to shuffle it off by saying that the statistics were not right or we made this or that mistake. If it is to be done, it has to be done well. We wanted to ensure that it was done right the first time.
Mr. Loughton: I completely agree with that sentiment. The report seemed somewhat ambiguous, but if that is the intention, I would welcome any practical proposals on how we can make that happen.
Many of us are frustrated about the inadequate level of fines that have been meted out up to now. It is patently absurd that a company can save hundreds of thousands of pounds by short circuiting proper waste disposal, taking a
calculated decision that it will at worst face a fine of about £20,000, if it gets caught, the chances of which are not high in any case.The proposal of my hon. Friend the Member for North Wiltshire (Mr. Gray) about the possibility of referring cases to the Crown court, where fines can be greater, is certainly worthy of further consideration. If we are serious about environmental regulation, we must have serious financial penalties available for serious misdemeanours, balanced with a lighter regulatory hand on the majority of institutions that, to coin a phrase, do their bit. We must also make it as straightforward and as affordable as possible to comply with the regulations in the first place.
People from my local Environment Agency office have been conducting "stinging" operations. They engaged six different firms to dispose of six different piles of rubbish, which had been marked. I was appalled to learn that only one of the firms disposed of the rubbish in a legal and environmentally acceptable way. The other five fly-tipped it, dumped it elsewhere or inappropriately put it with other rubbish. Prosecutions are now being pursued against those firms, and quite rightly so. They should have the book thrown at them.
One of the worst infringements occurring at present is dumping and fly tipping, which has certainly increased since the introduction of the landfill tax, although I am fully in agreement with that tax and believe that we must pursue serious reprisals against those who try to get round it. Our environmental police may not wear uniforms, but their effectiveness as an environmental law enforcement body can only be enhanced by their being clearly identifiable as a determined and effective deterrent, not afraid to pursue offenders. With the help of the courts, we hope that they will be able to get a result.
I welcome the report's praise for the agency's improved transparency and accessibility: its open board meetings; the fact that it was the first Government agency to hold an annual general meeting for the public; the availability of information on its website; and especially the availability of flood mapping through that site in the near future, which can only be a good thing. I am concerned, however, about the report's recommendation:
- It is important that the Agency recognise that Regional Development Agencies are here to stay.
The main issue, which has been mentioned by just about every hon. Member who has spoken today, is flooding. I reiterate the praise given to Environment Agency staff, who worked like Trojans during the recent crisis. They worked particularly hard in Sussex, my part of the world, where Peter Midgely--the head of the local agency which is based in Worthing--has appeared in just about every news bulletin about the local floods. He looks
increasingly stressed, tired and overwhelmed, but he and his staff have coped incredibly well. I am sure that he will reintroduce himself to his family when the flood waters have gone down. His area includes Lewes, Uckfield, Robertsbridge, Selsey and Chichester, all of which were particularly hard hit. I know that the Minister, who visited many of those sites--
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