Select Committee on Environment, Food and Rural Affairs Minutes of Evidence

Examination of Witness (Questions 220 - 225)



  220. What factors have combined to make some parts of the EU perform to a much higher standard, in your opinion, with regard to the industry and the implementation of the regulations?
  (Mr Jones) The underpinning driver that differentiates mainland Europe from us is this preparedness that there is a better way to handle end life materials than throwing them in the ground. They have land fill tax fees which are triple and quadruple what we have in this country. They have put a guillotine on the cheap exit route. Although we are a substantial landfill company, it is something that we do not like; we see landfill as a dying technology. We want to exit from that. Secondly, they are far more proactive when it comes to discussions with the manufacturing supply chains in the form of integrated pollution prevention control and integrated product policy, IPP, and producer responsibility, this concept that, if you make something, you are going to be liable for it even when it is scrapped at the end of its life cycle.

  221. When you say "they", do you mean governments must set the framework and commercial organisations will respond?
  (Mr Jones) That is the true role of government, we believe: to take these holistic views as to how these nitty-gritty levels of chaos could be avoided. Both in Brussels in the EU and in the constituent national governments that make that up, we detect a strong proactivity towards zero emissions, but we do not get into this silly argument of not being able to manage these global warming gases. They just take the view that in Germany we have 2,000 tonnes of global warming potential gases. How can we, through the regulations, the technology and the funding programme, make sure that that gets to zero? They have teams. When I talk to Europeans, they say that we in Britain are one nation that does not seem to have an integrated approach of strategic hit squads, if you like, that assess and evaluate these things, whether it is for the size of bananas under EU regulations or whether it is about integrated pollutant product strategy on fridges or anything else. From our own experience, frankly, in the waste industry, we send poorly qualified people into Europe to negotiate on these directives and they come back with absolutely ludicrous time spans, the latest example of which, outside fridges, is the Landfill Directive. We are going to refuse, frankly, but we have been asked by the Agency to put in a response, because they wasted 11 months and two weeks on transposition of the Landfill Directive. To get back to that deadline, we now have two to three weeks to respond with 38 page questionnaires on each of 50 landfill sites when there is no statutory guidance being produced. This is absolutely shambolic and we cannot keep going on like this. It is totally stupid.

  Patrick Hall: Maybe we will keep going on like this.

Mr Lepper

  222. We are going to get a repeat performance on landfill directives and on the Vehicle End of Life Directive and on the Waste Electrical and Electronic Equipment Directive?
  (Mr Jones) This will compromise a whole series of liabilities which will come over the barrier. There is a whole swarm of these now that are just going to come in. It is really around these three dimensions. The technology is not a problem. The preparedness is there; the technology is there to reduce huge levels of emissions to zero but who is going to fund this, how, through what sort of transparent mechanism so that nobody is going to run off with the money once it is paid over? Secondly, who is going to regulate it and define the technology? There are issues there with the Treasury. If you go back to fridges, the cost, as I pointed out in my submission, of ending up with, shall we say, a perfect world in fridge management at around £50 million to £60 million a year, is roughly approximate to the VAT that is paid by importers and manufacturers of fridges. I know there are complications with regard to rebating VAT liability but for me as a simple layman there ought to be a simple mechanism where the Treasury could say, "Rather than take a big inflationary hit", which is another of the Chancellor's concerns for these environmental issues, "let's think of ways in which we can have a `pensions holiday' for VAT and gradually reduce that over a period." In this country, it seems to us as Biffa that we have two Treasuries. We have a Treasury that raises money and a Treasury that gives it away. You try and draw an umbilical cord and say to the ones that raise the money that they should use that as part of their expenditure pattern; it is easier for me to put my name down for an Everest expedition.

  223. I am sure that ministers and officials in the DTI, DEFRA and officials in the Environment Agency will be looking very carefully at the written submissions that have come to this sub-committee and the transcripts of the evidence sessions as well. They are probably here this afternoon, listening carefully to what has been said. Most of the evidence that you have provided to us quite rightly has been about the chronology and so on of this particular issue and that has been very illuminating. Has there been any representation made to government at any level by, for instance, the Environmental Services Association or indeed individual companies about the much wider issues that you have been talking to us about this afternoon; or has all the negotiation and discussion been about how do we deal with this particular problem at the moment?
  (Mr Jones) Most of it, to my understanding, is around the specifics, on a reactive basis. Our stance as a company has always been to be much more proactive and to try and shape a much wider field. We have tended to do that in fairness because trade associations are fine but it would not come as a surprise to the head of our own trade association to know, because we have said it to him in the past, that they have to be adopting the position of first among equals or sometimes lowest common denominator. As a brand, we are not happy with that position. We believe that the United Kingdom ought to be far more adventurous, far more proactive. We see huge opportunities out of this. Behind the adoption of systems that can uncomplicate the funding and the level playing field on enforcement and regulation lie huge opportunities for British industry. Why are we having to import German, Swiss and Scandinavian technologies to process these fridges? It is because those countries have had regulations in this area for decades, in some cases, longer than us. We have known about these for years and we have a British company now that has entered that race, but I am not entirely convinced that their specification stands accountable to some of these established, continental ones. To answer your question, yes, we are probably a bit further ahead of the eight ball in some of these areas.

  224. Biffa have decided they are not going to invest in this now. You have talked about the levels of risk involved generally. Ministers, on the other hand, seem to be fairly confident that, by the summer, we will have the capacity set up to deal with the problem. Are you as sanguine about the situation?
  (Mr Jones) Every month, you have a boat load from roughly that wall down to the end of the House of Lords coming out of the system somewhere, because fridge ownership is more or less stabilised now. Some people do retain a second fridge, but you need ten machines to cope with this. The more mobile machines you have, you may need 12 or 13 machines because their process rate is lower. I do not believe we will be in equilibrium with the output of this waste stream for at least another eight to nine months, most optimistically. I plotted it somewhere; I can let the clerk have a note afterwards. If you plot the steady 200,000 to 250,000 that is chonking out each month and you build in the fact that the first machine might get going in August and you assume that you are going to have two, then three and then four, you will find that we are going to be in this mess for another two years yet. If you then put the money underneath that, because nobody is going to take these machines legitimately—we do not think it can be done and we are absolutely convinced it cannot be done to these standards for less than £20 to £25 a fridge. I agree that it can be done for £15 to £20 a fridge if you ship them to Germany because there is a glut in the market there. Some of those machines are being uprated but even so you are talking about, worse still on the bottom line, 250,000 times £20. This clock is going to be running at about £5 million a month, rolling forward over the next 18 months. There will be 100 million sitting in this ticking time bomb and these are just off the cuff calculations, before we are in equilibrium for the processing capacity to match what is coming out at the back end. Someone somewhere will be £100 million in hock. They will have either taken 100 million or they will have that liability if they keep those fridges in their possession. That is why the retailers stopped taking these things in November, because they could not export the third to Africa that went, which really provided the economic funding to send the other two-thirds to the ferrous scrap industry which was then dealing in scrap prices that were considerably harder than they are now. We are talking big sums of money here.


  225. Thank you very much indeed. You have covered a lot of territory in a relatively short space of time. Thank you again for the very useful written evidence which we will study with renewed interest in the light of your remarks. If there is anything else—you were kind enough to volunteer some more information—we would be delighted to receive that and anything else that you would like to tell us. The only thing you cannot do though is to retract anything that you have said.

  (Mr Jones) As a post script, because it is a fairly material fact pertinent to my submission on 1 March, I did say in my evidence that I had no recorded reply to my letter of 19 March to the head of regulation at the Environment Agency. In fairness to poor Steve Lee, I did get a reply from him on 28 March. It was a holding letter. On 12 June—I will let the clerk have copies of these letters—Liz Parkes responded from the Agency. Basically, she just bounced it back and said that DEFRA and the DTI were looking at it. I was maligning the agency in those areas.

  Chairman: Thank you for that extra point of accuracy and clarification.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 25 April 2002