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

Examination of Witnesses (Questions 1000 - 1019)



  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 the industry?
  (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 of ways.


  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 displayed.
  (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 it.

  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 they not?
  (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.

Mr Cummings

  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.

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