Examination of Witnesses (Questions 180-199)|
BOATENG MP, CLIVE
WEDNESDAY 5 DECEMBER 2001
180. I was not talking about landfill, actually,
I was talking about waste in its entirety, as covered in the waste
(Mr Boateng) I shall come back to my preoccupations
about landfill, because that has a very important role to play
in terms of our determining what we do with waste as a whole;
but officials attended the summit, PIU are now doing a study,
and officials will have an input into that.
181. But could you tell me what conclusions
you have drawn from the summit?
(Mr Boateng) That I am going to resist doing, generally,
in terms of waste. I am quite happy to share with you some conclusions
I am reaching tentatively in relation to landfill, but, in relation
to the subject matter of the summit and the study, I do not think
it will be helpful for me to come to a view about that.
182. Can you enlighten us as to any contribution
that you made to the summit?
(Mr Boateng) I did not attend; officials did.
183. Or any contributions that the Treasury
made to the summit?
(Mr Boateng) Yes; if you would, Mr Collins.
(Mr Collins) The principal objective of the summit,
I think, was for DEFRA Ministers, in particular, to hear views
from outside stakeholders, so, I think, quite deliberately, officials
from other Government Departments sat and listened. The day was
designed very much to provide local authorities, NGOs, those in
the environmental management sector, to offer views about the
nature of the waste problem and possible solutions, so that DEFRA
Ministers, in particular, but Government generally, could take
away some of these ideas and think about them and develop them,
as we consider how we are going to take waste policy forward.
So I think we used this very consciously and very deliberately
as a listening event rather than as an event to put forward particular
views from particular bits of Government.
184. In the Secretary of State's own words,
waste policy appeared to have ground to a halt, or the implementation
of strategy appeared to have ground to a halt; do you have any
view on the role that the Treasury can play, in terms of reinvigorating
(Mr Boateng) We are always looking for opportunities
to make a contribution to the development of environmental policy
through the machinery available to us; so I am looking forward
enormously to the outcome of the PIU study. You can be absolutely
sure, and I am sorry to go back, well, I am not sorry, because
I do actually think it is very important, if you look at the issue
of waste and landfill, I think you will agree that the challenging
targets that we have set, in Waste Strategy 2000, to increase
recycling, are assisted by the approach we have taken to Landfill
Tax, which is to increase the rate on active waste by £1
a tonne each year to 2004. And all the evidence that we have,
in relation to the impact of fiscal policy on landfill, is that
it does cause people to change their behaviour, and that is why
we are committed to reviewing the Landfill Tax after 2004, that
was why we set out a long-term strategy of rate increases, and
the environmental effectiveness of the tax is reinforced thereby,
and waste producers and managers get a clear message of the importance
of their planning ahead.
185. That is right; but, on the whole, most
people seem to think that the current landfill taxation regime
(Mr Boateng) They are likely to be higher; do you
agree with them?
186. I am saying that a lot of people think
it should be higher, and I want to know what your view is on that,
and if you have commissioned research that would inform that view?
(Mr Boateng) My view is that it is working, and that
all the evidence is that increasing it, in the way that we have,
has a positive effect on producers and managers planning in the
way that they need to in order to look at alternatives. My view
is that it is one of a range of instruments, economic and regulatory,
that help us meet these challenging recycling targets, and the
review of the rate after 2004 will cause us to see whether or
not we need to increase it yet again, and increase it in the light
of the evaluation we make at the time of its success.
187. And you are going to wait till 2004?
(Mr Boateng) No, because we keep taxes under constant
review, obviously, but we have committed ourselves specifically
to reviewing the rate after 2004, and DEFRA have taken forward
their consultation on a £140 million Waste Challenge fund,
and so that is all part of an approach, as I say, that uses both
economic and regulatory instruments.
188. Now landfill is one cause for concern,
but another, equal cause for concern, in some people's minds,
is that of incineration, and, obviously, if you are going to raise
Landfill Tax, either in 2004 or, if I am correct in understanding
what you said before,
(Mr Boateng) No; that would not be correct, Mr Barker.
What we do is constantly to keep the level of taxation under review.
We are committed, we are committed to reviewing the rate in the
run-up to 2004.
189. Right; but if, at some point in the future,
there is a rise in the Landfill Tax, what view do you take on
an Incineration Tax, in order to preserve differentials?
(Mr Boateng) That is a very interesting idea, and
the PIU will be incorporating that in their study, and that too
will inform our decisions.
190. But do you, Minister, not have any thoughts
(Mr Boateng) I have got lots of thoughts on waste,
but what I have to do is to contain my enthusiasms in a way that
does not cause me to trespass on the Chancellor's prerogatives
and on programmes of work.
Chairman: You are not alone in that, Minister.
191. Can I just come in on the line of questioning
here about Landfill Tax, because we are in a strange position,
where we pay rather less Landfill Tax than other European countries,
households pay only about 90 pence a week, in fact, for waste
management services that they receive, compared with quite a lot
more for, say, water and other things that they receive, and we
have an industry where, in fact, the leading players in the industry,
the waste management industry, all say, `yes, we want an increase
in taxes.' You are faced with a situation where you have got a
large amount of unanimity, saying, `we want to increase this tax,'
and, on the other hand, `we also want to really force the public
into ramping up their recycling and waste minimisation and materials
recovery activity,' and so you are sitting there with a very rare
thing for anybody in the Treasury of actually saying, `you're
being too good.' And when you are talking to us about easing up
on the "goods" and taxing the "bads", you
have got some lovely opportunity here, and you seem to be really
wanting to say, `well, hold on four years.' And my feeling is
that the plan, actually, in growing mountains of waste, you could
actually afford to go a little bit faster on this.
(Mr Boateng) If I may say so, I think that is a perfectly
legitimate and widely-held view; that is certainly the message
that we receive, and it is a very powerful message. What I would
say, in response to it, is that it is a message, of course, that
we have heard, in one sense, because we have pre-announced a five-year
programme of increasing, we have sought to balance the need for
a strong economic signal to reduce reliance on landfill, with
the need for those affected to develop alternatives, and it is
important that people are given an opportunity to develop those
192. And you have a source of income to help
them to do just that, if you are prepared to use it?
(Mr Boateng) We do, and we are consulting on how best
to use it. The message I get from you, Mrs Doughty, and from those
who put this case, in the way that you have, is that they would
like us to move faster, and I hear that. But I do think we will
have to make an evaluation of the pace of the development of the
193. I accept that point, and we are in a very
difficult time for waste disposal. I have a bit of an interest,
in that my constituency will be facing a planning meeting about
its incinerator over the next two days, and I am very sensitive
to the fact that we need to be getting rid of the waste and having
strategies in place. And my view is that, if we are going to avoid
large incinerators, alternate methods of material recovery and
really priming that market with the income would have to be a
good thing, so we have got to bring this technology along. And
really we find already over fridges, where we knew early on that
we would have to do this with fridges, we have not brought the
technology in place, and to my way of thinking the only way you
are going to do that really is to put more money into developing
and assisting those who want to bring those technologies along
to enable us to change the behaviour, and some of that needs to
be done at the Treasury.
(Mr Boateng) We need to make sure, which is one of
the reasons why we are looking at the Landfill Tax credit scheme
that that work is done and that we do develop effective alternatives,
at a pace that will enable us to keep the pressure on, in relation
194. Because, I guess that Europe will not stop
sending some environmentally helpful Directives to us, which would
be nice if we were actually ready for them, instead of rather
surprised and not having the technology there.
(Mr Boateng) I do think it is important, whilst accepting
much of what you have said, to realise the progress that we have
made in this area over the years and the lessons that we have
learned, not least through the activities of Committees such as
this. My first experience in this House was on the Environment
Select Committee when it was chaired by Sir Hugh Rossi, whom a
number of colleagues will recall. And, when you look at the history
of activity in this area, it has invariably been as a result of
the work done by Select Committees that steps have been taken
to help us down the road to where we are now, and I think that
continuing work and pressure will be needed; that is my assessment.
I think this is something that we need to do, in partnership,
building a consensus, and there is an increasing consensus in
195. And I hope we will continue giving you
the pressure you need. Thank you.
(Mr Boateng) I am sure you will.
196. Minister, everyone knows the Treasury is
keen on tax credits. We have the Landfill Tax credit scheme, and,
as I think we understand it, that scheme is currently under review
at the moment. Now those people that are advocates of the scheme,
as it were, as was and still as is, make the point that, because
it provides funding for environmental trusts, one of the reasons
that people like this scheme is that they find it very unbureaucratic
and simple to operate, and that if they are looking for funding
from it, from those trusts, generally they can get that money
fairly promptly and without a great deal of form-filling bureaucracy.
So, in that sense, it has been user-friendly, I think there is
a consensus on that. Is that being taken into account in the Government's
review, and, because it is a tax credit, is there any specific
angle that the Treasury has on that review?
(Mr Boateng) It is very much being taken into account.
That is what I find attractive about it, it is empowering and
enabling of local communities, and we must make absolutely sure
that whilst it is important to direct more resources towards sustainable
waste management, and the discussion we have just had indicates
that very clearly, we do not want to lose that, and I am very
clear about that, in my own mind. And that is why we need to consult
with interested parties to ensure that worthwhile projects continue
to attract funding during the transition to any replacement programme,
and the replacement programme is such as to contain and to replicate
those qualities that you have rightly outlined.
197. Is that one way of saying, `if it aint
broke, don't fix it,' and this scheme does not seem to be broken?
(Mr Boateng) It is not broken, but it is not delivering
as I think the Committee and ourselves would want it to deliver
on the issue of sustainable waste management, it just is not;
it is doing some good, worthy work, in exactly the way that you
have described, but they are areas where we need to find a way
of doing better. I had, I think, a very useful meeting with those
who administer the scheme, just a few weeks ago, where we shared
some of these concerns.
198. Finally, before we leave this subject,
I wondered if I could just touch on landfill of inert waste, where,
given that actually at only £2 a tonne on construction and
demolition waste, is not there actually a perverse incentive now
not to recycle construction and demolition waste, and have you
considered actually addressing this particular issue?
(Mr Boateng) That is a very interesting point. I am
not aware of any work having been done on that.
(Mr Maxwell) The escalator does not apply to the inert
(Mr Boateng) No. I think it is a very interesting
point, and some work does need to be done on this.
199. So you will look at it?
(Mr Boateng) We will do some work on it and I will
inform the Committee of the outcome.
Mr Barker: Thank you.
Chairman: Thank you very much indeed.