Examination of witnesses (Questions 1220
THURSDAY 21 DECEMBER 2000
ELLIS and MR
1220. What does that mean, Minister? Do you
give them cash that is specific or not? I am not very clever,
you see, I have to have it spelt out.
(Mr Meacher) No, we do not give them resources specifically
for that purpose, but we have under the spending reviewand
I think I did mention this last timeprovided an extra £140
million to local authorities.
1221. Across all of them.
(Mr Meacher) Which is ring-fenced. We are providing
£1.127 billionI think we had this discussion beforewhich
is for environmental and cultural services.
1222. We had that one before. We know that one.
(Mr Meacher) And £50 million also under the New
Opportunities Fund for the promotion of community recycling. So
there are extra resources, but it is not geared for particular
parts of the exercise that local authorities will have to go through.
It is for them to decide the best way to use that money to achieve
1223. Let us be clear, the £140 million
extra you are giving through the central Challenge Fund is about
the same amount of money that local authorities are going to pay
extra in terms of the Landfill Tax. You give with one hand and
take away with the other.
(Mr Meacher) But, Mr Blunt, what you do not seem to
take into account is that the two absolutely operate together
in a reinforcing and not contradictory manner. What we are saying
to people is if you stick with chucking it into landfill, you
are going to have to pay a lot of money. If you take advantage
of what the Government is providing to provide alternative collection
and recycling facilities then you do not have to pay the Landfill
Tax, and government is going it assist to provide this infrastructure.
1224. You have evidence coming out, for example
from the Consortium of Essex Waste Collection Authorities, that
the main reason why there is slow progress on recycling undertaken
by United Kingdom local authorities is a basic lack of adequate
investment. How much of that £1.127 billion is actually going
to get spent on waste rather than other environmental protection
issues or cultural services?
(Mr Meacher) That is absolutely a matter for the local
1225. There is no penalty if the local authorities
do nothing about your strategy?
(Mr Meacher) I repeatthey have to meet the
targets. There are penalties if they do not meet the targets.
1226. What happens if they do not meet the targets?
(Mr Meacher) First of all, we shall be monitoring
progress on a year-by-year basis. I am starting weak and going
stronger so do not despair! I want evidence year-by-year of the
action they are taking. We certainly can provide through WRAP
management support in terms of providing the kind of infrastructure
and advice that they need. We can certainly hold them to account
by directions ultimately from the Secretary of State and as a
last resort we can remove the local authority waste management
service from the local authority and give it to another body.
That is an extreme case
1227. What are you going to do if all of them
are in the same situation? How many local authorities do you seriously
think are going to meet those sorts of targets?
(Mr Meacher) I see no reason why they should not all
meet those targets. We believe it is practical. Many local authorities
are producing targets far in excess of what we are asking to be
done nationally. Local authorities abroad are well in excess of
1228. We are involved in the United Kingdom.
It is nice to be cultured and be interested in abroad, but I am
very boring and only interested in, say, Cheshire.
(Mr Meacher) I am sure Cheshire, which I think already
has a good record
1229.In my constituency four and a half
miles is abroad.
(Mr Meacher) Of course, the problems arise in the
inner city, highly urbanised areas. That is where the greatest
difficulties will come and the more suburban or rural authorities
are already producing high figures. We have to check on the progress
that is being made. We have to offer them advice and support.
We are providing what we believe is the extra money necessary
to achieve these targets. If there is evidence that it is inadequate,
we would have to look at it again, but we believe it is adequate.
We believe the three requirementstargets, money and markets
for recycled goodsvia WRAP are being put in place and there
is no reason why those targets should not be met.
Mr Blunt: I want to go back to this issue of
money because all the money is so vague. If it is capital resources
that are required in terms of recycling sites in order to get
the infrastructure in place to make recycling serious to the local
authorities, the £1.127 billion then comes to local authorities
with an array of different things that they can spend the money
on. The £140 million is part of the Challenge Fund and the
New Opportunities Fund is £50 million. If this really is
a serious government priority, then if all local authorities find
themselves in the position that mine is in, which in Reigate and
Banstead has a successful record on recycling, where the market
for recycled newsprint has collapsed so they are now finding the
costs of their scheme are starting to make the thing uneconomic,
and if that support does not exist for them, they are under such
tremendous pressure from your Department in terms of the Standard
Spending Assessments, particularly those authorities in the South
East who now have the fear that things are going to go pretty
rum for them when we finally get round to readjusting the formula
Mrs Dunwoody: Only those with Conservative MPs!
1230. That is rather my concern. These are the
parts of the country doing the best in terms of recycling and
they are not going to be in a position to do so if the markets
do not exist for the goods they are producing and they simply
cannot find the money to put into investment in the infrastructure.
I realise you cannot give an answer now and in the end you will
have to get the money out of the Treasury, but can you give an
undertaking that if in the course of the next two or three years,
if you are unfortunately still in office, that you will put the
resources in to deliver the Waste Strategy 2000 if that is what
(Mr Meacher) I insist that that is what we are doing.
I have given the figuresI will not repeat them. £1.1
billion is a very substantial sum of money. I repeat, it is up
to local authorities who have to meet these targets as to how
they distribute that money. I would be very surprised if at least
half of that did not go specifically into waste management. I
cannot predict it because it is a matter of local authority decision.
I would expect that given the pressures on them to meet those
targets that at least half will be put to those purposes. The
other point you make is on markets. I absolutely agree with you;
it is essential that there should be markets for recycling, otherwise
the whole object of the exercise is lost. You pay money to collect
it and then in the end you have to landfill it because there is
no other alternative to dispose of it and you have to pay for
that and the whole exercise is completely otiose. That is exactly
why we have set up the Waste and Resources Action Programme. It
is a private sector body at arm's length from government. We have
given it a clear remit, put £30 million behind it, and it
is headed by a key private sector executive. It is a small tight
team. I know you have had discussions about the business plan,
which I am told is not a business plan. They are producing a business
plan in April and we have confidence in them. So I think we are
trying to deal with markets as well.
1231. I would like to turn to the Landfill Tax
Credit Scheme. Would it be right to say that the Landfill Tax
Credit Scheme was designed to meet the needs of the Treasury in
terms of wanting private rather than public sector control rather
than to meet the needs of sustainable waste management?
(Mr Meacher) I am aware that the Landfill Tax Credit
Scheme would not have been introduced in its current form by a
Labour administration; we inherited it. It has merit, but it is
not ideal for our purposes. We have tried to adjust it to make
it more appropriate to our purposes. Insofar as the landfill operator
does have the opportunity to decide how that tax rebate shall
be spent, we cannot, unless we make it into a public sector scheme,
foreclose on that discretion in the hands of the landfill operator.
We are trying to put down indicative guidelines to ensure that
more of the money goes into recycling. Again, consistent with
the structure of the scheme we inherited, we cannot require that
to happen. So we are doing whatever we can to improve local authority
and community recycling consistent with the choice which remains
ultimately in the hands of the landfill operator.
1232. Do you believe that the scheme can work
effectively in the interests of sustainable waste management within
its present structure?
(Mr Meacher) That is a question that I have spent
a lot of time thinking about. We are trying, as I say, to adapt
it to our purposes and I think we can go a considerable way in
that direction, and are doing so. There are issues which were,
for example, raised by The Guardian and by the Channel
4 Despatches programme about the whole question of exemptions.
We are looking at that because clearly they do have to be tightened,
and I am determined that they shall be to ensure they used for
waste recovery not for disposal. There are other aspects of the
scheme which do perhaps require more fundamental change. All that
I can say to you at this moment is that I am seeking to come to
a conclusion on exactly that issue that you have raised.
Mr Blunt: Soon.
1233. We are going to have a jolly Christmas.
(Mr Meacher) It will certainly be within a few months
of the new year. I do have to consult colleagues, of course. The
point is the Landfill Tax Credit Scheme is ultimately the responsibility
of Customs and Excise, it is not my ultimate responsibility, I
do have to persuade them. The Treasury has a real interest in
changing a scheme to giving it public expenditure under-pinning,
of course, when we have just had a full scale Spending Review
and those totals are set. It is not just a simple matter of making
a policy change, there are wider implications and they are not
all in my hands.
1234. Do you believe that it is possible to
change it sufficiently within its current structure?
(Mr Meacher) I am doubtful of that.
1235. Could part of those considerations include
changing it to come under public control?
(Mr Meacher) As I have said, Mrs Butler, the problem
with it coming under public control is that it requires a public
expenditure stream to underpin it. The Treasury, and I entirely
understand this point, has fixed the public expenditure totals,
which I am sure the Chancellor will rigidly wish to keep to. There
are of course considerable increases but they are fixed. I think
the view of Treasury colleagues, which I entirely understand,
will be that if you want to make a change you are going to have
to find the public expenditure elsewhere, so it does present problems.
1236. But this really is public expenditure,
is it not? It is just a scam really to have this Tax Credit instead
of a tax that is then spent as public expenditure, that is what
(Mr Meacher) I thought for a moment, Mr Blunt, that
you were referring to the Landfill Tax Credit Scheme as being
a scam, which was actually introduced by your Government. There
are many people who think it is a bit of a scam.
1237. It was set up in order not to lift the
total of public expenditure. Perhaps this was the early days of
stealth taxes and all the methods that unfortunately the Government
have taken to extremes.
(Mr Meacher) What we are seeing under the Landfill
Tax Credit Scheme, which I do not wish to knock too hard because,
as I say, I do think it has merit, is that it has led to significant
sums of money going into community and voluntary schemes
1238. That is accepted but the real issue here
is that this, in fact, is public expenditure in reality. It has
been done at arm's length so far to try to set up a scheme as
though it is not. Let us be honest about this, this is, in effect,
taxation that is then being spent and it ought to be publicly
accountable. If we are actually being honest with ourselves as
a country this is tax and public expenditure rather than this
rather clever mechanism in order to deflate the public expenditure
(Mr Meacher) I have to say, Chairman, there is more
joy in heaven over one sinner who repenteth than over 99 just
men. Of all the people on the Committee who I expected to advance
that I think, Mr Blunt, you were the last, but I am very glad
to have your support.
1239. I am glad to have surprised you.
(Mr Meacher) I think that is probably basically correct.
1 Note by witness: The Department of Culture,
Media and Sport is currently consulting on the proposals for the
next round of lottery funding (the New Opportunities Fund), including
a new £150 million programme to foster environmental renewal
across the UK. It is proposed that around one third of the available
funding should be committed to community sector waste reuse, recycling
and composting projects. Back