Select Committee on Environmental Audit Minutes of Evidence


Examination of Witnesses (Questions 290 - 299)

TUESDAY 18 JANUARY 2000

MR STEPHEN TIMMS MP, MR SIMON VIRLEY, MR DAMIEN MCBRIDE AND MS HEATHER MASSIE

Chairman

  290. Good morning. Thank you for coming here this morning. We are delighted to see you. We have decided to start five minutes early. Thank you for your various memoranda and the letter dated 13 January, which dealt with the various questions on the Climate Change Levy that we are anxious to hear more about. I would not encourage you, but if there is anything further that you want to add before the Committee questions you, please do so.

  (Mr Timms) I shall say a few words, if I may. First of all, thank you for the opportunity to appear before the Committee for the first time. I am grateful for the Committee's work in pushing forward the environmental agenda in a number of ways. I hope that the committee will agree that a number of its previous recommendations were reflected in the environmental tax measures that were announced in the Budget in March and in the Pre-Budget Report in November. A lot of progress has been made since the statement of intent on environmental taxation in 1997. The Committee described the last Budget as the "greenest" ever. The recent Pre-Budget Report contains significant progress on environmental modernisation. Responding in particular to this Committee's recommendations, there was, for the first time, a separate chapter in the Pre-Budget Report on environmental issues reiterating the importance that we attach to economic growth taking place in a way that ensures effective protection of the environment and prudent use of natural resources. I would be very happy to answer any questions that the Committee may wish to put to me. I shall introduce the officials who are with me. On my right is Simon Virley, who heads the Treasury's environmental tax team. Immediately on my left is Damien McBride from the tax policy team in the Treasury dealing with indirect taxes. At the end of the table is Heather Massie who has responsibility for environmental issues at Customs & Excise.

  Chairman: Thank you, Minister, for that brief statement. We want to take it tax by tax. To begin with, on one or two general points, I shall ask Joan Walley to start.

Joan Walley

  291. Minister, I welcome how much you have done personally to take this agenda forward. We were pleased to see that the Pre-Budget Report has a special chapter on environmental issues. In the light the statement of intent back in July 1997 as regards the precautionary principle, we are a little bemused about the section in 6.4 on page 101 of the Pre-Budget Report. You refer to the fact that environmental policies must be based on sound evidence. Does that not conflict with the precautionary principle? Should we not underpin everything with the precautionary principle? Is there a conflict there?
  (Mr Timms) I do not see a conflict. I think we have been quite careful to research thoroughly all the measures that we shall discuss this morning. There has been some research work commissioned at the outset, some consultation following the conclusion of that work and only then have we come forward with announcements. I believe it is very important, particularly given the uncertainties in some of these areas, that we research thoroughly and prepare for the announcements that we make. That is what we have done and that has been the right thing to do. I do not see a conflict with the precautionary principle, and certainly no conflict with anything in the statement of intent.

  292. You do not feel that the formulation such as the one that is in the Pre-Budget Report would have been at variance with the lessons of the BSE crisis or the lessons from asbestosis where you need a long incubation period to find out the long-term effects? Why not spell out the precautionary principle? Why not have it set out as clear as daylight?
  (Mr Timms) If you look at the range of issues with which we are dealing, they are rather different in character from the examples that you have just given. There is a substantial body of work on climate change, for example. That is not to say that we know everything about what will happen in the future, but there is a good body of research to draw on. The same is true in the case of the use of pesticides. It has been possible, therefore, to proceed on the basis of careful research in each of these areas. There may be areas where in future that will not be possible and I take your point. However, where it is possible—it has been in these cases—we should proceed on the basis of research where we can, not least because if we were to get it wrong the consequences could be quite damaging and we want to avoid that if we can.

  293. In terms of the water environment, there are a lot of questions to be asked. Why not have the precautionary principle included? Will you look at that further?
  (Mr Timms) I am not sure what you mean. I do not imagine that you are urging me to do things before we are reasonably confident at least about the implications of those measures. For example, there was a good deal of concern about the proposals announced in the Budget on some aspects of the Climate Change Levy. You and I discussed those. I think it was important that we were careful, consulted thoroughly and carried out widespread research before moving on to the next step of the announcements that were made in November. That is quite a good illustration of the importance of being careful and thorough in planning measures that we take in this area. It sounds a little as though you may be encouraging me to rush ahead before we know what the implications are.

  Joan Walley: I am not trying to do that. I feel that there are questions raised by the way in which this is framed, not least in terms of how much research, for example, might have been done on any particular subject. You might have one particular area where a lot of research has been done, such as Climate Change Levy and greenhouse warming, but you might have other issues where the same sort of research has not been done and it is a question of where the precautionary principle underpins all that follows.

Mr Jones

  294. Welcome, Minister. I do not envy you your role. I have been there before. On the Government's proposals on pesticides, in the representations that our Committee received from the RSPB and the NFU there was some dispute concerning the external environmental costs imposed by pesticide use. What is the view of the Government on that?
  (Mr Timms) I have seen different figures assigned to that as well. I am aware that conflicting evidence has been presented to the Committee. I think the ENTEC report put a figure of £274 million on that. Industry figures have been somewhat less. The figures are different. However, I believe that there is agreement on the fact that there is considerable potential in reducing the damage caused by pesticides while consistent with providing an adequate level of crop protection. We have seen the different views that you have seen. We have not taken the view about which is the more accurate, but we have proceeded on the basis that there is potential there for some beneficial change.

  295. Given that you have looked at the evidence, as we have, and that you have seen that it is conflicting, why have not the Government commissioned their own study into such environmental costs?
  (Mr Timms) We have commissioned a number of studies in that area, in particular the Department of the Environment, Transport and the Regions commissioned the ECOTEC study that was published and consulted on during the course of last year. That was a very valuable piece of work and it led to quite a wide-ranging discussion. It has allowed us to take forward the process of deciding what needs to be done in that area. It was a good piece of work. It drew on a lot of previously carried out research which happened to be available in that area, and that was helpful. It has been a valuable piece of work from our point of view.

  296. Have you considered any work to compare the costs and benefits of the use of pesticides with the disbenefits?
  (Mr Timms) There are a number of existing studies that address both those issues. I believe that we have the research information that we need to make progress on this. I do not think that there is a need to commission further work before we go forward, although that is not to say that we know everything possible that could be known. I think we have the basis for making progress.

  297. Have the Government considered the costs that the water industry bear in capital costs of plant and running costs of treating drinking water to remove pesticides?
  (Mr Timms) Yes, we have had some data on that. Certainly the water industry has figures. Yes, we are aware of those figures.

  298. The figures are considerable—hundreds of millions of pounds. Would you agree that that is a considerable distortion of the market and in effect, a hidden subsidy, whereby water consumers are paying hundreds of millions of pounds for intensive agriculture?
  (Mr Timms) There is a good deal of uncertainty in this area. It is certainly the case that the water companies spend a lot of money cleaning water. It is quite difficult to say that part of the spending is as a result of pesticides and the rest is the result of other things that have to be cleaned up. It is not clear that if there were to be even no pesticides in the environment how much of the water companies' spend could be avoided. In reality, of course, there will always be some pesticides, so I am not sure—I have not seen the data on this and the Committee may be aware of more data than I am—that we know quite what the relationship would be between a reduction in the use of pesticides and a commensurate reduction in the spend of water companies in cleaning water.

  299. Do you see it as the responsibility of the Government to find out, given that we are talking about considerable sums of money? There is at least an arguable hypothesis that organic farming, for example, is considerably disadvantaged by that very large subsidy that water consumers pay for products that they may not wish to buy.
  (Mr Timms) There is an agreement about what we want to do which is to reduce the level of pesticide use commensurate with adequate crop protection. We have the data that we need to make progress on that. I am sure there are a number of other things that it would be interesting to know, but I would not want to hold up progress on that by commissioning additional research at this stage.


 
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