Examination of witnesses (Questions 1
- 19)
TUESDAY 9 MAY 2000
MR JOHN
BALLARD, MR
HENRY DERWENT,
MR MICHAEL
GAHAGAN and MR
MARK LAMBIRTH
Chairman
1. Can I welcome you to the Committee, the first
of our sessions on the Annual Report for 2000 and the expenditure
plans for 2000-2001 and 2001-2002. Could I ask you to introduce
your team, please.
(Mr Ballard) Thank you, Chairman. I am John Ballard,
Principal Finance Officer, DETR. My colleagues from the Department
are Henry Derwent on my left, who is director (Risks and Atmosphere)
on the Environment side; Michael Gahagan, who is Housing Director;
and Mark Lambirth, who is Local Government Finance Director.
2. Do you want to say anything by way of introduction
or are you happy for us to start straight away into questions?
(Mr Ballard) I would be happy for you to start, Chairman.
Mr Olner
3. Can I take you first to the aggregates tax,
and the fact that the Chancellor in this year's Budget introduced
a level of £1.60 per tonne. Do you think that should be an
aggregates tax that is equally applied or should there be any
discounts or disclaimers for quarries or mineral extraction in
National Parks?
(Mr Ballard) You mentioned the Chancellor. I should
just put on record that, of course, these matters are for the
Chancellor to determine.
4. But it is for you to operate.
(Mr Ballard) Having said that, I will respond as positively
as I can. The question of whether we had a single tax or a multiple
rate issue was certainly something that was looked at very carefully,
and I think the reason why the decision was taken in the way it
was was because of the overriding advantages of a single tax,
which sends a clear, simple signal to producers that there is
an environmental cost. If you went for a multiple tax you would
have a much more complicated regime to operate, which would be
more expensive to operate. It would also add considerably to the
length and complexity of the legislation, which already runs to
about 76 pages. I also think there is concern that if you did
have a higher rate, it would bear differentially on the hard rock
producers, who tend to be in National Parks. That is not to under-value
the need for protection, but the feeling is that there are other
ways of differentiating, for example through regulation, so that
it is much more difficult to open up new quarries in National
Parks because the planning regime is much stricter.
5. We will come to the planning regime a little
later on. Could I ask you what input your Department had in setting
the framework that the Chancellor delivered in his Budget?
(Mr Ballard) We were consulted by the Treasury at
various stages in the run-up to the Budget. I cannot really say
anything more than that.
6. What was the principal point your Department
put forward to the Chancellor in the formation of this tax?
(Mr Ballard) I would say the Department's main concern
was establishing the principle of an aggregates tax.
7. So you wanted it as a Department. You saw
it as a weapon to try and have some environmental improvement
in the quarry industry.
(Mr Ballard) As you know, government is seamless in
this context.
8. It depends who holds the needle though, does
it not, to a large extent? Could we come back to planning guidance.
When do you intend to update your Planning Guidance Note 6?
(Mr Ballard) We are hoping to do that in the next
two or three months. That is obviously subject to the Minister's
agreement, but it is well under way, so we would hope to have
this out by the summer recess.
9. Could I put it to you that it is not really
worth the paper it is written on when there are so many outstanding
mineral consents already given. Are you going to suggest to ministers
that they be revolutionary and shorten the time limit to prevent
somebody applying for planning permission and not doing anything
for 30 years? If Bill Olner wanted to start a quarry in Nuneaton
and got planning permission, he need not touch it for 30 years.
Surely that is too long. Are you going to suggest it should be
shortened?
(Mr Ballard) The question of what you do with extant
planning permissions is something which I know each time MPG6
is reviewed is always considered. Certainly in a previous incarnation
I have been responsible for planning, and it is something that
I know is looked at very carefully because it is an issue. What
tends to happen is that it is a question of the overall balance
that you are seeking to achieve in MPG6. Until we have a draft
which ministers have endorsed, I do not think I can be more helpful
than that.
10. You would not intend to give guidance to
ministers that they should be revolutionary and get rid of these
old planning permissions?
(Mr Ballard) We would give advice to ministers that
we thought was practical and sensible overall, but I do not think
I could be led on the content at this stage.
11. Finally on this, £1.60 per tonne is
being levied. How much of that will be used for collection and
the bureaucracy that goes along with it and how much will go to
the Sustainability Fund?
(Mr Ballard) I do not have the figures on that but
I can certainly send you a note.
Chairman
12. What impact is it going to have on the Department's
finances? Presumably, quite a lot of the Department's activities
do involve commissioning or paying grant for buildings to be put
up and things like that. How much less is the Department going
to get from its expenditure as a result of the tax? How much is
the tax going to cost the Department?
(Mr Ballard) I think the starting point has to be
the purpose of this tax, which is to encourage better use, more
effective use. We do not see it as: you are using this amount
of aggregates now; how much will this cost under this regime?
What we would expect to do is to encourage better use of recyclable
material, more effective and efficient use of material. For example,
on the roads programme under the Highways Agency, they are finding
on examination that, driven by the financial considerations, they
can actually make more effective use.
13. I understand that, but what I asked you
is how much it is going to cost the Department. Even if you make
more effective use, in the roads programme and in social housing
you are still going to be using some aggregates, are you not?
(Mr Ballard) We will be using some, but I think we
need to wait and see. For the roads programme we have worked out
that if you simply apply the tax without any efficiencies, the
additional cost is something in the order of £90 million
a year. That is a pointer.
14. That is for the roads; you do not know as
far as the social housing what implication it has?
(Mr Ballard) No, because we do not have the same detailed
control over social housing. It is obviously done through second
and third parties. But we have done the analysis in relation to
the things that we are directly responsible for, just to see what
the quantum is. The roads programme is by far the largest, and
that is before we take account of the way in which their practice
would change under the stimulus of the financial charge.
15. How much income do you expect in total from
this measure?
(Mr Ballard) I do not have a figure for that, but
again, I can add that to what I send you.
16. Why was the £1.60 charge decided on
rather than, say, £3?
(Mr Ballard) This is based on research as to what
would be a reasonable sum to charge across the country. That is
our assessment of what we feel is a reasonable charge. Clearly—which
is part of the argument for differential rates—the cost
in individual sites will be higher because the environmental damage
is higher, but that is offset by others which are lower. This
is a judgment based on research.
17. You have done the work on the highways.
How much reconstituted waste tyres, reprocessed concrete, those
sorts of things, do you expect to be used on the roads programme
as a result of the aggregates tax being imposed?
(Mr Ballard) I do not have a figure for how much,
but the way in which roadfill is done, the thickness of dressing
that is put on top, all these things are being considered.
18. That is fairly obvious, but was there not
anything more factual done in working out the implications for
a tax like this?
(Mr Ballard) The overall principle was what was to
be established. There is no doubt from the research we have done
that there is an environmental cost. What we are seeking to do
is to bring home that cost. The money, of course, as you know,
is primarily recycled to the industry, so the overall cost on
the industry is held to be the same, but it is a question of the
way in which it is looked at.
19. One of the things the Government has failed
on pretty dramatically is to reduce the amount of waste that is
being produced. Surely one of the aims is to encourage recycling,
and I would have thought to have some estimate of what impact
it made on tyres going to waste, concrete going to waste, and
bricks and things like that going to waste, would have been essential
for the Department to have some idea about.
(Mr Ballard) I can look and see if there is anything
further I can add in the note.
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