Examination of witnesses (Questions 240
- 264)
MONDAY 14 FEBRUARY 2000
DR PAUL
LEINSTER, MR
NIGEL READER
and DR MARK
KIBBLEWHITE
240. How much do you subsidise that figure of
£18,000? If you are saying that SEPA subsidise their figures,
do you have any subsidies at all?
(Mr Reader) There is no subsidy. We are required by
our financial memorandum to fully recover all relevant costs associated
with regulation and not to discriminate between one class of charge
payer and another.
241. Why are you only going back to SEPA now?
Why did you not sit down with them at the beginning and actually
figure out how you could come up with a common charging scheme
together and, therefore, perhaps SEPA could knock some off the
bottom line, so to speak, if they have got extra dosh?
(Mr Reader) I think that is a valid criticism, that
we should have negotiated earlier with SEPA over this matter.
242. How does your charging structure conform
to the "polluter pays" principle?
(Mr Reader) It conforms to the principle in relation
to the recovery of the regulator's costs. The charge payer is
required to pay the cost of the regulation associated with the
licence.
243. Okay.
(Mr Reader) So our accounts allocate and record the
costs associated with licence regulation and the costs are recovered
through the charging scheme and the accounts, of course, are subject
to external audit.
244. If I can throw one last comment at you
and see how you catch this. For the ordinary farmer sitting there
you are coming across as being very vague and woolly: "well,
we are not quite sure what is going to be required, it depends
on the individual circumstances, it is going to be a lot more
red tape, believe it, guys, it will cost you an absolute fortunate.
We do not know really why we did not sit down with other similar
bodies and see if we could come up with common figures".
You are coming across here as being extremely amateurish and you
still do not know what is going to happen in the future, you cannot
actually look forward more than just a few months' ahead. What
is your reaction to that?
(Dr Leinster) I think that is unjust. I think it is
a caricature. I think that we have worked hard with the industry
to develop a way forward. I think we have got that way forward.
We are working very hard—
245. So the industry is happy with it then?
(Dr Leinster) The industry is not necessarily happy
with it but they are working alongside us. I think that is positive.
I think we will come up with a position where we will get an agreed
position between ourselves and industry as to how we take this
forward. Will any sector be happy where they have to pay charges
where they did not have to pay charges before? No, they will not.
Are we happy when we have to pay taxes and charges when we did
not have to pay charges and taxes before? No, we are not. I think
that is a fact of life. What we need to do is to come up with
the most appropriate way forward. I believe that we are working
hard to develop that. This is a complicated business and we are
working hard, we are devoting resources to this, and I believe
that come early summer we will come up with a solution to how
we are going to regulate pig and poultry intensive farms under
IPPC. Have we made mistakes along the way? Yes, we have. Can we
learn how to do things better? Yes, we can. Do I think we will
come up with a good solution? Yes, I do.
Mr Mitchell: I will remind everybody that we
are running into the time for the next session. David Curry.
Mr Curry
246. How can you work out the charges when you
do not know how many installations there are going to be?
(Dr Leinster) The charges are raised on a per installation
basis.
247. You do not know how many installations
there are going to be, you said so.
(Dr Leinster) Sorry. We carry out the work for a particular
installation and it is the work that we carry out for that installation
which predominantly determines the charges that we levy.
248. So the level of charging will not be likely
to shift. If you were doing, let us say for the sake of argument,
40,000, would the level of charges be different from doing 60,000
or 20,000 on an individual basis?
(Dr Leinster) The way that you get economies of scale
within this is by this development of general binding rules because
that is the way you have this standardised approach. What we are
moving from is the site specific nature, which a number of other
sectors will be authorised under, to a very standardised approach
and through that standardised approach is where we get economies
of scale.
Mr Jack
249. What is the hourly rate that you are putting
in in terms of your costs? I appreciate that you multiply that
by the number of installations, but what is the hourly rate?
(Mr Reader) We have a daily charge rate which embraces
all of the costs associated with the site.
250. What is that?
(Mr Reader) It is £1,215 daily rate but that
embraces all of the costs associated, not just the inspector at
the sharp end but also the technical guidance and—
Mr Curry
251. You can hire Linklaters for less than that,
can you not?
(Mr Reader) It is not a daily rate, it is a method
of recovering costs back to the site.
252. I have always been deeply suspicious of
full economy cost recovery because I want to know what goes into
the full economy. When you did your little catalogue you said
research but that is discretionary, is it not, what research you
do? Are farmers going to be consulted on what research you carry
out?
(Dr Kibblewhite) I think the answer to that is yes.
253. In what way are they going to be?
(Dr Kibblewhite) We have a research and development
programme which is partnered by many other organisations and it
is not unknown for us, in fact it is quite common for us, to put
money in alongside trade organisations or producers so that we
can both come to better solutions to problems that we both face.
254. You are then stating that you will define
the research that needs to be done. If I am a pig farmer and I
am absolutely on my uppers and I am fed up with paying extra for
stall and tether and everything else, and you come along and you
are going to sling these charges at me and say there is something
in there for research, my inclination is going to be "bugger
research", I want to minimise these charges. What choice
am I going to have to take those decisions to minimise my charges?
(Dr Kibblewhite) The Agency has a duty to found its
activities on good science and that requires that we do research
and development. I do want to say that we do not do research and
development in isolation from the industry that it affects.
255. So we are going to end up with the best
research on the smallest industry in Europe, are we not?
(Dr Kibblewhite) I hope we will end up with the best
research and I hope very much we will not end up with a small
industry.
256. Is it true that each Member State has discretion
as to what level of charges they place?
(Dr Leinster) Yes, it has.
257. You said that you had close contact with
your continental equivalents. Have you formed a view on the level
of charges they are likely to impose?
(Dr Kibblewhite) We note that under IPC in the Republic
of Ireland there is already a charge for pig and poultry and this
is measured in thousands of pounds, so whilst that is not an exact
parallel—
258. With respect, thousands of pounds can be
anything more than £2,000.
(Dr Kibblewhite) It is more than £2,000
259. What is it?
(Dr Kibblewhite) From memory, and I would like the
opportunity to double-check this, about £6,000 or £7,000.
260. It is well below your proposed level.
(Dr Kibblewhite) However, that is for IPC, not for
IPPC.
Mr Curry: Knowing what you know about the way
your opposite numbers operate on the continent, would you imagine
that your Dutch, Danish, German and French institutes are likely
to end up levelling less than we do, more than we do or about
the same as we do?
Mr Marsden
261. You can phone a friend if you want.
(Dr Kibblewhite) I do not need to phone a friend.
Mr Curry
262. As a candidate country, if you would like
to sling Poland in at the end.
(Dr Kibblewhite) One of the items of research and
development that we have commissioned is a comparison of the pig
and poultry industries in different European countries and how
IPPC is likely to be implemented and amongst the facts that we
have been able to obtain from that is knowledge that, indeed,
in some countries the regulatory costs will not be charged back
to the farmers.
263. Which are these do you imagine? I realise
that you are operating under rules imposed upon you, I am not
attacking you for that, I am just anxious to know what the situation
is.
(Dr Kibblewhite) We will be very glad to give you
a summary of that.
Mr Mitchell
264. Are your European counterparts bound by
the same cost recovery?
(Dr Kibblewhite) No.
Mr Curry: It is entirely discretionary.
Mr Mitchell: Thank you very much, gentlemen.
We have overrun but the answers have been very informative and
robust. We are very grateful to you.
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