Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence

Examination of witnesses (Questions 1220 - 1239)



  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 review—and I think I did mention this last time—provided an extra £140 million to local authorities.

  1221. Across all of them.
  (Mr Meacher) Which is ring-fenced. We are providing £1.127 billion—I think we had this discussion before—which 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 the targets[1].

Mr Blunt

  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 authorities themselves.


  1225. There is no penalty if the local authorities do nothing about your strategy?
  (Mr Meacher) I repeat—they 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—

Mrs Dunwoody

  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 this level.

  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 requirements—targets, money and markets for recycled goods—via 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!

Mr Blunt

  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 is required?
  (Mr Meacher) I insist that that is what we are doing. I have given the figures—I 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.

Mrs Ellman

  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.

  Chairman: When?

  Mr Blunt: Soon.

Mrs Dunwoody

  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.

Mrs Ellman

  1234. Do you believe that it is possible to change it sufficiently within its current structure?
  (Mr Meacher) I am doubtful of that.

Christine Butler

  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.

Mr Blunt

  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 it is.
  (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 totals.
  (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

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