Examination of Witnesses (Questions 1000
TUESDAY 28 NOVEMBER 2000
TIMMS, MP, MR
HEWITT, MP, AND
1000. Just to be clear, is there not a potential
conflict of interest if you have one bit of the industry being
able to allocate funds or not allocate funds to another bit of
(Mr Timms) I am not sure whether there is. I can see
the point that you are making but my impression is that a number
of the major waste operators see very significant commercial opportunities
for them in the development of recycling. So I am not sure that
the conflict arises in quite the way you have expressed it.
1001. Yet if that were the case, would one not
expect the situation of that sector to have improved? You said
just a moment ago that so far this year, indeed I think you were
quoting the Pre-Budget Report, the proportion has gone down?
(Mr Timms) It has indeed gone down and that is causing
us to look at how the scheme works. I do not know, I am only speculating,
but I would not have attributed that necessarily to the self-interest
of the landfill operators. I think it is probably more a function
of all sorts of pressures which are placed on the environmental
bodies calling upon them to deploy their resources in a variety
1002. You have referred to this exhibition by
the environmental bodies downstairs last week, but I think most
people walking in, if they had not been invited by the environmental
bodies, would have been a bit worried as to whether they had been
invited by the landfill operators. It did seem to be a very nice
public relations exercise for landfill operators, did it not?
(Mr Timms) My impression was that particular exhibition
was set up at the instigation of the environmental bodies themselves.
1003. I understand they set it up but when you
looked at the display material there was hardly a major waste
contractor which did not have its name somewhat predominantly
(Mr Timms) There is no doubt at all that the Landfill
Tax Credit Scheme is very popular with the landfill operators.
It does allow them to win substantial positive publicity for themselves
in the areas where their landfill operations are in place, and
certainly they have benefitted considerably from it. I do not
think there is any dispute about that at all.
1004. So some of them are quite prepared to
find the 20 per cent, are they not?
(Mr Timms) Yes, the 10 per cent.
1005. Sorry, 10 per cent.
(Mr Timms) Yes, the contributions
1006. It is not bad really if you put up 10
per cent and get all the publicity, is it?
(Mr Timms) The contributions come from a variety of
sources. I think it has been a very attractive arrangement from
the point of the landfill operators. I would make the point, and
I think it was evident in the exhibition last week, that it has
also been very popular in the local communities which have benefited.
1007. But we have actually got a system which
is taxation without representation, have we not? There is no way
the individual householders who actually are taxed on their dustbins
now get any influence as to how that money is spent.
(Mr Timms) I guess they have through the ballot box,
as with other forms of taxation.
1008. How through the ballot box because it
is at arm's length of Government? It is not supposed to be influenced
by local authorities at all and the whole way in which money is
spent is supposed to be not public expenditure, so it is at arm's
length from the Government, but it is fundamental taxation on
the individual whose dustbin is being emptied.
(Mr Timms) I think one could present the arrangement
in a number of ways. As I have said, one of the original intentions
of the scheme was not to add to public expenditure. That does
mean a loss of control over the way the funds are deployed, and
that is undoubtedly a feature of the system. It is important to
make the point that it does have a number of benefits.
1009. I understand the benefits, I do not particularly
want to go back over that, I just want to make the fundamental
point that the person who pays the tax actually has no influence
directly on the way in which it is spent.
(Mr Timms) Local authorities can influence the way
the resources are deployed; they cannot control them. There is
a channel for influence.
1010. So when local authorities are allowing
these contracts to go to a waste operator they cannot actually
say specifically "well, we will give it to you because then
you will support this environmental scheme", but there could
be a nod and a wink, is that what you are saying?
(Mr Timms) I am sorry?
1011. When you have a contract being let by
one of the local authorities letting a waste contract
(Mr Timms) Yes.
1012. You are suggesting there can be a nod
and a wink that it goes to a particular contractor who supports
a particular environmental scheme and then the local authority
will be sympathetic to that bid rather than to another bid?
(Mr Timms) That is certainly not how I envisage it
working and I am not aware of any evidence of that having occurred.
1013. It is implied by quite a lot of people
but I accept that no-one gives us the hard evidence of it.
(Mr Timms) I certainly have not seen any evidence
of that and, if anyone does have it, I would be very keen to see
1014. You are suggesting that local authorities
are in some way able to influence it, what I want to know is how
are they able to influence it?
(Mr Timms) Let me ask John to comment on that.
(Mr Anderson) Representatives of local authorities
may be on the boards of environmental bodies, so they do have
a say in deciding how the money in those environmental bodies'
funds will be spent.
1015. But some of those environmental bodies,
in fact, fail to get any money because someone else is making
the decision as to which environmental body gets the money, are
(Mr Anderson) That is possible, yes.
1016. It is possible or it is correct?
(Mr Anderson) There are projects which environmental
bodies would like to see funding attracted to but they may not
be able to attract funds, that is correct.
1017. So the local authority does not have any
influence as to where the money is dished out, does it?
(Mr Anderson) Not in that particular instance, no.
1018. It only has a way if it is done in the
way that I was just suggesting, which is clearly illegal, that
it actually influences the way in which the contract is let.
(Mr Anderson) Chairman, I am not absolutely sure.
I think there are many projects where local authorities are represented
on the boards of active projects and they do have an influence
and a say in what is happening. I think it would be extreme, in
your case, to agree fully with you.
1019. A question to the DTI. Do you accept that
the achievement of sustainable waste management will rely on much
greater producer responsibility measures?
(Ms Hewitt) Yes, I do. I think producer responsibility
has got a very important role to play in ensuring that we get
much greater recycling and reuse and, indeed, much less generation
of waste in the first place.