Select Committee on Environmental Audit Minutes of Evidence

Examination of Witnesses (Questions 120 - 136)



  120. Do you have any plans to transfer even more to rail in the coming months?
  (Mr McLaughlin) It is a continuing process. There is a number of applications in at the moment for developing rail and it is a continuing process. It is all moving in that direction. We are looking for opportunities to move material by rail wherever possible.
  (Mr van der Byl) I do not know whether Richard Swinson wants to add anything about his own direct rail connections?
  (Mr Swinson) It is not just rail, it is water, as well, in the industry. We are now moving more by water than ever before. Could I just come back on the china clay issue in Cornwall? It is not so much about costs but about the logistic and the environmental impact of moving that material from where it rests at the moment either to a port or to a rail loading facility. We all know what the Cornish roads are like and the infrastructure down there. There is quite an important environmental impact getting that material to a port or to a railway.

  121. In terms of not just china clay, in terms of aggregates, generally, it would be helpful to have almost chapter and verse on where you think the rail freight grants and grants to assist the canal transportation could actually be used to help with the transfer from road to rail or water.
  (Mr Swinson) On a historic basis or for the future?

  122. What do you have in mind to transfer from road to rail?
  (Mr Swinson) It is very difficult for an association to present evidence on behalf of all membership because obviously there is some commercial advantage sometimes for people and it is dependent on finding suitable rail sites for reception of aggregates, and then there is the question of planning permission.

  123. It is just that in their evidence to us the CPRE have suggested that whatever you might put into the New Deal about wanting to tackle this issue, at the end of the day you will be dependent upon the willingness of your members to make this happen and the providers of those transportation services to make them available as well.
  (Mr Swinson) There is a very active dialogue going on with the rail companies now, they are very different animals from when they were nationalised; they are much more commercial, as Simon has referred to, and they are very pro-active with the industry in trying to find suitable sites and to get more aggregates onto rail.
  (Mr McLaughlin) The main problem is probably the availability of access to the rail infrastructure and the availability of depots as opposed to the willingness of the industry to put material on rail. We would like to put more on rail if the overall infrastructure was there.

  Joan Walley: I can tell you there are opportunities in Stoke-on-Trent to do that.

Mr Loughton

  124. I would like to come on to SSSIs but before I do I want to get clear that nothing you have said so far suggests that this tax, however vague the proposals, distinguishes between good and bad practice in the quarrying industry, that the person who is the least environmentally friendly in the way he or she digs things out of the ground will be penalised just as much as the person with the best environmental track record up to date?
  (Mr van der Byl) That is certainly our understanding.

  125. From what you said the cost is therefore going to fall on the construction industry effectively, if it is going to be passed on, but if it is not passed on and the industry tries to absorb it itself, due to competition and over-supply, surely the only way that companies are going to keep up their profitability is to produce yet more aggregates which is what we are trying to avoid here. Leading on from that to SSSIs, do you think if the tax is introduced or there are changes to existing regulations and policy that there is a risk that quarrying firms could retreat from some of their best practice, particularly from the voluntary agreements dealing with SSSIs and the many you have already mentioned requiring responsible management?
  (Mr van der Byl) I would have to say that I would hope none of the QPA members would retreat from any of their environmental obligations, particularly on SSSIs. There is, however, a danger—and I know Richard will articulate this much more clearly than I could—of the tax having to be absorbed in part by the industry and the effect that will have on the industry's ability to do more than just good practice and normal practice. That is the key point about this. The key point about the New Deal is that we are trying to bring for the first time the whole of the industry together under a managed programme of environmental improvement. That is not to say there has not been improvement up to now, of course, but it is to take this next big step, and it is an enormous step to get all of the industry, for example, certified under ISO 14001. So what we are trying to achieve with this is a controlled, managed, huge advance in environmental behaviour—the point which Richard made earlier—but I think the danger of having to absorb any large percentage of a tax, which might happen, exactly on the premise that you make, is that some of the current level of better than average performance will suffer. Richard might be able to tell you more about this.
  (Mr Swinson) On the question of demand, when you said the industry could sell more aggregates, we are a reactive supplier, we do not generate demand in any way, we cannot advertise and generate more demand for aggregates, so we are purely reacting to construction activity.

  126. On that point, you are susceptible to competitive practices from imports from other countries where products are not taxed. Am I right to say that finished building products imported into this country would not be liable to tax?
  (Mr Swinson) That is correct. We understand that imported primary aggregates will be taxed in the same way as UK produced aggregates. On finished products there may be some of that depending on the level of tax on finished products—concrete blocks or such things. But I do not think it is significant in terms of tonnage.

  127. Could you give us more detail on the impact on SSSIs?
  (Mr Swinson) I think it would be retrograde if the progress the industry has made with English Nature was to slip back, and perhaps some of the members would feel they have moved forward on voluntary agreements and understandings with these bodies and there would be great disappointment in the membership if we do not achieve a partnership with Government on this. We have been looking at it for 2½ years, have put a lot of effort into it, it has not been easy for us to convince the membership at times as to what we should do, but we have got very good support for what we have put forward and we believe we can deliver it. This will move us forward, there is no doubt about that.

  128. You are doing your own research on things like the impact on SSSIs, I gather. When is that going to be ready and who are you surveying?
  (Mr van der Byl) We have done some internal work to assess what SSSIs we are managing and on what special interests they are and in which regions and so on, and that has certainly been done in-house. Our proposal in the New Deal is to take that to its ultimate conclusion, that is to jointly do research with English Nature, which we would underwrite, in assessing the whole of the SSSI interest within the quarrying sector, past and present, and work out what we need to do to do the best for SSSIs.

  Mr Loughton: Do you want to talk a little more about the New Deal? Apart from the SSSI commitment, what other things are you putting into the voluntary package?

Dr Iddon

  129. Chairman, before we leave that, could I ask a question about SSSIs? Some of these SSSIs must be in quarries which have dormant permissions, are you guaranteeing that those SSSIs will never be disturbed into the future?
  (Mr van der Byl) I do not have the details on dormants to hand, I regret. I think the agreement we have had with English Nature up to now is that each site will be taken on its merits, and each site is quite different, each special interest is quite different. It is very clearly understood, I think, by both sides that you can still quarry in the vicinity of a SSSI as long as the special interest is not damaged, and that is certainly what we have tried to do, with better or less than absolutely perfect success up to now. But the areas where we have not quite got it right have diminished to at the very most a handful of sites where there is still some doubt as to whether we should do something else to improve the management of that SSSI and the care of it. But I think they are literally a handful and it may only be down to one site now across the whole nation.

Mr Loughton

  130. Do you want to elaborate a little more on the other proposals, the non-SSSI proposals, in the New Deal?
  (Mr van der Byl) The key elements of it are two-fold. There is a series of voluntary initiatives for which we have volunteered as an industry association, and they cover environmental management, environmental training, transport commitments and obviously the investment in recycling capacity. We have a very robust set of performance indicators which we will measure our performance against and which can be publicly viewed on an annual or six monthly basis, whichever we agree with Government. We have said we will go further than we are required to on environmental impact assessment, we have said we will go further than we had originally said on national parks commitments, for instance. The icing on the voluntary cake is the Sustainability Foundation which is entirely a voluntary, independently managed, £20 million a year foundation, for use by communities living in the vicinity of quarries to improve their environment in the wake of whatever operations we have in that locality. But there is another side to this and that is the QPA is a voluntary association—people do not have to join it, they do not have to belong—but our aim jointly with Government is to improve the whole industry, not just the 90 per cent which belong to us. We need a bit of help from Government and the key driver in this is the encouragement by Government to purchase their public procurement aggregates and the ultimate end-products, as it were, only from what I would call "green suppliers", that is those with at least ISO 14001 certification. There is no competition issue, or European competition issue, here—and I have checked it with the OFT—on the grounds that anybody can get an ISO 14001 certificate whether they are members of QPA or not. That is the key driver to this. We would also like to see a bit more help from Government on planning enforcement. One of the key problems is that a number of planning authorities, who are the enforcers of regulations, perhaps do not get down into the real nitty-gritty of some of the less responsible operators, for all sorts of reasons, lack of resources perhaps, and we are prepared to support that.

Mr Gerrard

  131. In your submission when you were talking about the principles of the tax you said that minimising adverse environmental impacts and internalising external costs were mutually incompatible. That seems to be contradictory in terms of the normal expectations of what pricing would do, what ecological taxation is about. Are you really saying that including environmental impacts in the price is incompatible with minimising that impact? Do you think there is something special about the aggregates industry that means what are regarded as normal principles of economic theory on taxation would apply too?
  (Mr van der Byl) It is a complex question. If I may, I will ask Jerry McLaughlin, who is very much up on these things, to try and answer it.
  (Mr McLaughlin) I think it is a question of the efficiency. The problem with the externality route is if you measure an externality, say in the case of a quarry the Government research averages out about £1.30 a tonne, you can tax the industry to £1.30 a tonne, for example, and then you have this neat economic balance between the externality and the tax but you are not dealing with the environmental issue. What we are trying to do is focus our initiatives on minimising the environmental impacts, not trying to match an externality cost, because this gets into quite an academic area. If we are going to take the externality cost too literally I think it ends up being self-defeating. The principle externality value that was surveyed by the Government's consultants was the crushed rock outside national parks, that is 55 per cent of the industry's supply and the measured externality was 34 pence per tonne. That research was carried out a year ago and since then the prices have gone up by at least 30 pence per tonne. If you are going to tax on the basis of pure calculation of externality you assume that the externality is matched by the price increase, which is a highly questionable argument. Instead of worrying too much about the precise value of the externality we have just focused on reducing those impacts, whatever their value.

  132. Let us assume that a tax does come in, what would your attitude be on the question of hypothecation of the tax, do you think that would matter?
  (Mr van der Byl) I personally think it would only work as a good environmental tax or as a good tax full-stop if it were hypothecated to achieve the environmental improvements that we have offered in our package. The tax would need to be hypothecated and directly infused back into the environmental improvement sector, otherwise it is purely a construction tax and it can be viewed as nothing else.

  133. Would you accept that it would be a way of getting more money into recycling and environmental schemes than the voluntary system you are proposing?
  (Mr van der Byl) It is quite conceivable you could do it that way but it still has to be managed. The question would have to then arise, who would manage this if it is not the industry itself? The improvements have to be done by the industry. It is a behavioural problem, that is what we are trying to address. Richard Swinson made that point himself, we are not trying to manipulate the market, and I do not think you would unless you were to kill the industry stone dead. The tax would have to be so high to affect the market that it would either kill the construction industry stone dead or certainly slow it down quite significantly, to the detriment of all programmes. We accept, and have always accepted, that we need to improve our environmental performance. What we have tried to say is that we have focused precisely on those impacts which have been measured both by us and by the London Economic Survey. That is what we are trying to do: hit the noise; hit the dust; hit the transport and get the restoration right so that we leave the land in as good or a better state than we found it. Also, to make sure when we operate we cause the least amount of damage and effect on our local communities.

  134. Essentially you accept the argument that the environmental impact will depend on how a site is managed. You mentioned earlier the point that you thought some planning authorities, perhaps, did not do all they could in dealing with problems. Are there any other specific improvements that you think the Government should be making for guidance and in the regulatory planning regime?
  (Mr van der Byl) The DETR have said to us throughout this discussion that the discussion on aggregates tax and whether it should be a voluntary issue or not goes hand in hand with mineral planning guidance. An updated regime, MPG 6 in our case, has been postponed progressively as the discussion on aggregates tax has been longer and longer delayed. The two do go hand in hand, there is no doubt about that at all, we have seen that throughout the discussion on MPG 6 and the development of our partnership package. They do go absolutely hand in hand, there is no doubt, and so the regime has to be changed. It is not that broken, it just needs a bit ofMr Swinson) What we are offering with ISO 14001 would be of great assistance to the planning control because we will be doing a certified check that we are complying with all of the planning conditions. It will make it much easier for planning control then to say: "All we need to do is look at that documentation and we will know." There will be an open book on that ISO 14001 report wherever we are transgressing the planning permission condition. A lot of the work will be done. There will still be the problem with the other 10 per cent of course. We hope that if we have the purchasing policy from Government—and we will tackle other clients in the industry, developers and so on, to try and get them to look at the supply chain—then the planners' job will become easier. We also offered impact assessment on the planning application for extension as to whether they are within the regulations at the moment, again this will help them assess the impacts with new development.

  135. What you are offering in the New Deal is much more than planning permissions, you are going considerably further than that. You have also said that you represent most of the industry, but not all of it, we may still get problems of non-compliance, whatever agreements were made. Would you have objection to an negotiated legally binding agreement rather than an agreement which was purely voluntary?
  (Mr van der Byl) That is a very difficult question to answer. It depends what the agreement says. We are absolutely committed as an association to what we have offered. There is no doubt that there will be sufficient peer pressure within the association to make sure that nobody was stepping outside that agreement. I am sure Richard Swinson will back me up on this. I have absolutely no doubt that all of the QPA members will abide by the agreement that we make with Government, if we get to that agreement, and that they will stick with it. That will be an obligation on them as being members of the QPA.

  136. Is that going to be sufficient? If you look at some of the agreements negotiated in relation to climate change levels they are backed up by tax or exemptions, is that not more effective?
  (Mr van der Byl) The Government always has the last word. The one point that has not been made up to now is, even if we do get a partnership agreement with the Government, the Government always has this threat hanging over us that if we do not deliver they will tax us and we accepted that. In a sense, that is your binding agreement. If we do not get there in the time frame we offered then the final resort for tax is always there. It is the threat we accept and we accept throughout this.

  Chairman: Perhaps that is an appropriate moment to end our discussions. We would have liked to have asked you more questions, but we have over-run our time. Thank you very much indeed, that was a very useful session for us.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 2000
Prepared 11 February 2000