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MONDAY 15 APRIL 2002 __________ Members present: Mr Michael Jack, in the Chair __________ Memorandum submitted by Department for Environment, Food and Rural Affairs Examination of Witnesses RT HON MR MICHAEL MEACHER, a Member of the House, Minister of State (Environment), MS SUE ELLIS, Head of Waste Policy, and MS MARIA NOLAN, Global Atmosphere Division, Department for Environment, Food and Rural Affairs, examined. Chairman
(Mr Meacher) Yes, certainly. On my right is Maria Nolan, who is Head of the Monitoring of the Montreal Protocol Policy Branch , ie ozone depletion. On my left is Sue Ellis, who is Head of the Waste Policy Division. (Mr Meacher) I am sorry about that. I entirely accept that it was produced late. There was discussion about it before Easter and I was very keen to get it to you before Easter. Easter, as always, with the demands from a whole range of policy issues coming together, is very difficult. I really regret that we did not get it to you before Easter which was the intention and we have got it to you as soon as possible after that. There was a great deal of discussion on numerous items, not least lessons to be learned, which I am sure we are going to turn to at some point, but I do apologise for its lateness. (Mr Meacher) As you say, Chairman, the aim of 2037 is to supplement the work of the Montreal Protocol and, in particular, to reflect amendments to the Protocol which have been negotiated between 1995 and 1997. It does go further than the Montreal Protocol in a variety of respects: tightening controls on HCFCs and methyl bromide; the recovery, if practicable, of ozone depleting substances from refrigeration and air-conditioning equipment; the ban on the use of CFCs in the servicing of equipment; the decommissioning of halon fire protection systems by 2003; the prohibition on the export of most controlled substances except HCFCs. That is a substantial tightening and one which I think is entirely justified in the international community's efforts to restrict ozone depleting substances. However, as I did indicate - and this of course is critical - the application of "if practicable" to certain forms of recovery is clearly stated in the original Article 15 and indeed of course was --- (Mr Meacher) The Regulation was, of course, drafted by the Commission, not by the United Kingdom and we have to respond to what is in the Commission drafting of the regulation and that is what we did. (Mr Meacher) No I do not think so at all. You seem to be suggesting that it was exclusively Article 11; it was not. (Mr Meacher) I was not but it seems to me perfectly reasonable that the issue should be raised because it was an issue. It was not the main issue and we never thought it was. (Mr Meacher) With respect, Mr Chairman, I think you are a little off the ball there, if I may say so. We were entirely concerned about Article 16 but the question of the ban on the export trade is something of which, first of all, the industry was not aware of I have to say with some surprise of which several departments, including other Member States who were concerned with the export trade, including the Commission, were not aware, nor, indeed, of the extent of it. That is why there was some discussion about it because it did take all parties by surprise - the industry which found it could no longer export and the various departments and Member States and the Commission who found that there was a thriving export trade of which they were unaware. (Mr Meacher) Absolutely. I am saying there was considerable discussion once it emerged, first of all, that the waste industry was not aware of the Regulation preventing exports. That triggered an understanding on our part - and that is all government departments - that there was an issue here about exports of which we had never been told. We were never even told about it in terms of the extensive consultation that we carried through when the issue of exports was not raised. Therefore, for all of these reasons it is perfectly reasonable that there was considerable discussion about this issue. It was never the central issue but it was an important and significant side issue. (Mr Meacher) That is certainly my understanding but perhaps I could ask my official to confirm that. (Ms Nolan) Not until Customs & Excise started to enforce the ban when the Regulation came into force in October 2000. Mr Mitchell (Mr Meacher) I am sure that is correct. In other words, it did not matter where the CFCs were, whether they were in the coolants or whether they were also included the foam, the fact is that there are a lot of CFCs in the coolant equipment and that was a perfectly sufficient reason for the ban. The issue about the foam is a separate one as to whether recovery was required under the Regulation or whether it fell under 16 (3) and therefore "if practicable". (Mr Meacher) When we do get on to this issue of the saga from the end of 1998 until June 2001 we will see that there has been a great deal of confusion, which of course is at the heart of this whole issue. I repeat, the issue is that Customs (in indicating to the waste industry that they could not export) were making clear that they could not export because the fridges contained CFCs or HCFCs. For that reason, because it would produce a problem for the developing countries, particularly West Africa and Nigeria in terms of disposal and put them at risk of the Montreal Protocol and because it was prohibited under Article 11, it would no longer take place. I do not think the fact that Customs & Excise regarded CFCs as being in the foam as well as in the liquid coolant meant that this issue of the application of recovery from the foam had been resolved or that they had a particular view. I do not believe that that is the case. This issue was resolved by us in our discussions with the Commission. As we shall soon see, there were very variant views on the application of the Regulation for foam. (Mr Meacher) Indeed. (Mr Meacher) If there is no CFC in the fridge at all then, of course, they could be exported, but that leaves open the question as to whether it could be removed fully from all parts of the fridge. Then we are back to the technical feasibility of this. Mr Borrow (Mr Meacher) I would put it rather differently; why had it taken until 11 June 2001 for the Commission to reach an authorative view as to whether or not recovery applied to foam. If I may go through the main stages of this whole episode. The Regulation was passed in the Council of Ministers in December 1998. There was virtually no discussion of this issue we are talking about today because there was much greater concern, which had been raised by the industry, about the issue of the phase-out of HCFCs in the EU where it was believed it had begun on an international basis so it was not anti-competitive, and the phasing out of methyl bromide. Those were the issues that Ministers examined. As a result of that, we in the UK took the view that the Regulation would only require recovery of CFCs from the coolant equipment and not from the foam for two reasons. One is the definition of "recovery" under Article 2 of the Regulation which states that recovery means "the collection and the storage of controlled substances from, for example, machinery, equipment and containment vessels, during servicing or before disposal." Since we understood that it was not technically possible to remove controlled substances from rigid foams during servicing or before disposal, we believed that the recovery of CFCs would not be mandatory. Our other reason was that the original reference to "foams" had been deleted from 16 (1) and the new draft paragraph 3 inserted "where recovery is required, if practicable". It seemed to us a very good reason to believe that that is where the recovery from foam would fall. Following that, in February 1999 the first of the Management Committee meetings (and there are only two a year) of the EC took place, and as a result of our raising it - and this was the first time we raised it - it was decided to hold a workshop in Oslo to discuss the practicability of this as to whether it was technically possible to recover CFCs from domestic refrigerators. That was held. It was certainly indicated that the costs were high, especially in the case of insulating foam. Whether anything was taken forward from that, I am not aware. Then in October at the second EC Management Committee, the Committee agreed that clarification was needed on a range of definitions in the Regulation. The minutes of the discussion show that the possibility of making technical amendments to the Draft Regulation in the conciliation process was envisaged. However, the Portuguese Presidency and the Commission were much more focused on dealing with the amendments resulting from the second reading by the European Parliament, on which of course there would have to be a compromise, so it was not taken forward. We then get into (which is very important) the list of clarifications offered by the Commission to Member States on 28 February 2000. This gave their interpretation that Article 16 (1) did not apply to foams blown with either CFCs or HCFCs and "it was the Commission's understanding that the clarification proposed here is in line with the intention of the Council during negotiations of the new Regulation." The next occasion when the matter was raised was in March 2000 when United Kingdom officials requested that the same clarification should apply to 16 (2) because the language in both paragraphs was the same. There was some discussion about that but no conclusion reached. Then in July 2000, as our memorandum indicates, the matter was raised in the margins of a UNEP Montreal Protocol meeting. Some countries - Sweden and Denmark - wanted to go a great deal further and they said that recovery from foam in refrigeration was possible and therefore should be mandatory. We therefore raised it with UNEP's Technology and Economic Assessment Panel as to whether that was feasible. They advised that it would not be possible to remove controlled substances from foam either during maintenance or before dismantling, so removal during service and maintenance was not possible as no such service or maintenance of the foam takes place. They advised that there was a possibility of recovering controlled substances before disposal of equipment but it was not practicable to do so because experience of recovery was mixed, and therefore it was premature to make this mandatory. On 11 September 2000, UK officials therefore wrote to the EU Commission supporting the interpretation that foams should be classified as a "product" under Article 16(3) and that recovery would be only "if practicable". That was the fifth time we raised it. The sixth time was at the fourth Management Committee meeting in October 2000 where the United Kingdom having written the letter, the matter was discussed. The minutes of the meeting 4 to 6 October 2000 record that the Committee agreed that foam containing CFCs was classified as a product and therefore covered by Article 16 (3), in other words if practicable. There was no discussion, I have to say, about what practicability meant and there was a further issue as to whether that would require an extended timescale for introduction so that the technology would be in place. There was another EC Management Committee meeting on 25 October 2000. Again, we raised the matter there. Again, the Commission advised that it would be considered. Perhaps, Chairman, it would be helpful, although it is rather tedious and long, if I just completed this which takes it a little bit further than Mr Borrow had raised. We then sought legal advice at the end of December 2000. Here I think we get to the very heart of this extremely vexed issue. There are, in effect, two views. One is that the fridge contains foam as an integral product and that the CFCs are within the foam in the fridge, in which case it could well be that fridge insulation that is foam blown with CFCs comes under 16 (2) and not under 16 (3). That is one view and, indeed, our legal advice tended to go in that direction. However, that view is contrary to the interpretation of the Commission in its clarification table and the consensus which was reached by Member States that foam contained in the equipment was a product and therefore would fall under the "if practicable" proviso in 16.3. There are two views. One is that the fridge with the foam contains the CFCs, the other is that the foam itself is a product and contains the CFCs and therefore falls under 16.3. It is that fundamental difference of interpretation where the Commission continue to hold the latter view, and did not change until June 2001. If I could, as I say, just try and complete this. On 30th June - this is our eighth attempt to get resolution of it - UK officials wrote to the Commission requesting an urgent interpretation of Article 16 saying that if it was not received it would jeopardise UK compliance with the Regulation. The Commission then produced a revised clarifications paper which was entitled Frequently Asked Questions. It was placed on the agenda for the next Management Committee meeting which was March 2001 and, interestingly, the paper noted that interpretation of Article 16 was still "a grey area", those are their words not mine. Chairman (Mr Meacher) I think the answer is the foam. Certainly it is a high level of chlorine loading which comes from the foam, that is perfectly true. (Mr Meacher) I am sure it was known. (Mr Meacher) I entirely support the line of your reasoning, I entirely support that. The issue was whether it fell under - to use this jargon, I am afraid - 16.3 and whether it was "if practicable" or whether it was mandatory not whether it was desirable. Certainly it was desirable but the issue was if it was practicable then that would provide time for the technology which was required to achieve this, which was not present at that time in the UK, to be secured. That was the sole issue, not any dispute about the desirability of tightening and making more stringent the Montreal Protocol provisions. Mr Borrow (Mr Meacher) That is a very key question and the answer is it makes all the difference in the world as to whether it is 16.2 or 16.3. It is not a matter of triviality. What we were wanting was clarity from the Commission, only the Commission was able to provide it. The point about it being a Regulation as opposed to a Directive was it was intended, for very good reasons, it should be introduced in exactly the same way across all the Member States. For that reason there had to be clarity which would cover all the Member States. The only one who could provide that was the Commission. I have to say - and I do not say this aggressively at all - on nine separate occasions we did seek clarification and it was not until the 11th June 2001 that we obtained it. Now if we had decided, as, Mr Borrow, you are suggesting that we should have gone ahead and implemented it as a domestic regulation, I think there is no question that we would have been accused of gold plating. I hope this term of abuse is well understood in the Committee, it means where governments are demanding more than the Regulations specifically require and are imposing burdens on the industry which are costly. I think it would have been accepted with difficulty by other Government departments. Certainly I think it would not have been accepted by industry. What the recycling and foam blowing industry were saying to us was "we want certainty one way or the other". That was what they were wanting so that they would then be assured as to what was the date of recovery, when that was going to be enforced and they could make plans for it but they were not going to make plans for it if the date was uncertain, why should they? That was why the whole of the thrust of our policy was to secure their certainty. (Mr Meacher) Yes. (Mr Meacher) Yes. (Mr Meacher) Yes. Our view of "if practicable" was based on three criteria. Firstly, the availability of the relevant technologies in the UK; secondly the economic feasibility of introducing such technologies if they were in use elsewhere and thirdly the concept of proportionality. In other words, we did believe that the question of cost versus benefit was relevant here. Indeed at one or both of the meetings of the Management Committee in 1999, the Management Committee did agree that the cost element was relevant. If you say, as indeed you did, that in other Member States they have the technology in place, I think there are four or five - Germany, Austria, Sweden, Netherlands possibly Finland - the reason for that is either that they have a private industry which deals with the particular issue of recovery and private investors in those countries have decided to take a much more proactive view and to invest in technologies in the expectation of their future market or, which I think is the case to a large degree, most of these other Member States have a government backed waste industry. We do not in this country, our industry is entirely private and of course it is a matter for them whether they decide to invest or not. I think one of the lessons I might see coming out of this whole episode is that instead of being over concerned about gold plating, I think the industry ought to understand that there are often opportunities in being able to anticipate future demand and future markets and investing in accordance with it, although they will say certainly that they want to have a measure of certainty before they are going to spend two or three million pounds on investment plants. (Mr Meacher) Let me answer that by saying that the Commission's clarification paper early on in 2001 with regard to the question of what is meant by "if practicable" says - and I quote - "the practicability of recovering ozone depleting substances from products, installations and equipment, not referred to in 16.1 and 16.2 should be assessed on a case by case basis". Then they go on "Such assessments need to take account of the costs and benefits of utilising whatever technologies are available." That is the basis on which they thought that "if practicable" should be exercised. I think at that time certainly we accepted that. Chairman (Mr Meacher) No, clearly that is the case. (Mr Meacher) Certainly we knew that it existed in other countries. The question was whether "if practicable" meant that the technology was in use elsewhere or whether it existed in a particular Member State and therefore it was practicable to put it into operation. That was an issue. (Mr Meacher) Because we and the Commission believed that the issue of recovery from foam was covered by 16.3 which contains the words "if practicable" and not surprisingly we wanted to know what it meant, partly because this would involve the timescale within which investors - who at that stage did not exist in the UK - would be investing in what were quite expensive plants. (Mr Meacher) You put it again in an odd way. (Mr Meacher) I know but the interpretation - dare I say the spin - which you are trying to put on it is not at all appropriate. You seemed to be suggesting that we were both reluctant and perhaps not knowing the full position and therefore did not act in the way which might have been expected. The truth is it was the UK more than any other country in the European Community which was raising the necessary issue as to what the regulation which had been passed by ministers - this issue about foam never having been discussed - what it actually meant. That letter, of course, does not broach upon the issue of the recovery of foam. It just refers to the fact that as from the beginning of 2002 there would be a mandatory recovery of CFCs from fridges, of course that is absolutely the case. (Mr Meacher) Exactly. If it falls under Article 16.3 then it only has to be undertaken "if practicable". (Mr Meacher) We are back to the issue of what is meant by "if practicable". We have never been in doubt that the technology existed elsewhere. I repeat - as I did in answer to Mr Borrow - that there are three issues when we are talking about practicability. One is the availability of the relevant technologies in the UK. That is what most people would think is meant by practicability otherwise you have to wait to invest before it can be introduced in the UK or you have to export. If you are talking about practicability most people would take that to mean that the technology is available in the UK. That was one issue. Secondly, of course it exists elsewhere, as we well knew, you can either export to that country or you can introduce the technology from that country. The question then is about the economic feasibility and the question of cost, cost as against benefit. Thirdly the issue of proportionality. I accept the issue of proportionality, it is justified for the reasons that you have given yourself, there is significant chlorine loading in the foam and therefore it is justified so long as it is practical. Now it is technically extremely difficult, it is costly also. Those are relevant considerations. Diana Organ (Mr Meacher) Of course that is one of the lessons to be learned. We agreed this in the European Council of Ministers, the Environment Council, on 21st December 1998. We reached a common position in February 1999. There was then discussion, as I have indicated, in several Management Committee meetings where for the first time this issue of the application of mandatory recovery from foam was raised and it was never resolved. Clearly that is very unsatisfactory. (Mr Meacher) Of course we do not. (Mr Meacher) Well, in the event it was indeed uncertain as to the application. The matter was never raised with us in our consultation with industry. They were far more concerned about methyl bromide and HCFCs. It was never discussed in the Environment Council. When it came to be discussed by officials in the Management Committee either the matter was repeatedly postponed or there were different interpretations and the matter was never resolved. Obviously that is very unsatisfactory. I cannot think of another precedent where that has happened. Obviously that should not happen and we have to take steps to ensure that does not happen again. (Mr Meacher) That is a very different issue for the simple reason that the Ozone Depleting Substances legislation that we are talking about here today is a Regulation. It is directly applicable in the UK courts. It differs not a jot from its application across the whole Community. There is no discretional flexibility in the manner in which it is applied whereas the Waste Electronic and Electrical Equipment Directive is a Directive. What that does is to set a broad framework with discretion for Member States as to how they apply it. Of course there is absolutely no question of setting requirements so high that no facilities are available to treat electronic and electrical equipment. (Mr Meacher) I am saying we are totally prepared for that not least because the UK already exceeds the draft collection target of four to six kilograms per head of population. That is what is down as the required target, we exceed it already in the UK. I have read, like you, in the press, whether we are talking about the WEEE Directive, whether we are talking End of Life Vehicles, we are going to see mountains in other cases, that is absolutely not the case. The only reason it occurred in the case of fridges was because the interpretation of recovery from foam was left so late that we were not able to put in place the investment which would have it ready for action by 1st January 2002. That is the only thing and frankly this should not have happened. I do not think it is a good idea - I know blame culture is very popular in some quarters - I do not blame anyone but I do think we have to learn lessons. I do think it could have been decided a lot earlier, should have been, and I am sure in future will be. (Mr Meacher) Yes. (Mr Meacher) I agree. I am as puzzled as you are. Of course, if the industry who are at the sharp end undertaking the export trade do not tell you, you do not know. It is remarkable and I cannot explain why it is that representatives of the waste industry that we were in regular touch with and so were Customs and Excise and so were DTI --- Chairman (Mr Meacher) Sorry? (Mr Meacher) Our first discussions I think with the recycling industry were in February 2000 about this particular Regulation. Diana Organ (Mr Meacher) I am sure there are, from time to time. If you are saying, as I am sure you are, when were you discussing this particular Regulation and its application, I think the answer is the first meeting was in February 2000 and there were several meetings thereafter. I am as astonished as you are that when 40 per cent of fridges were exported that this was not known to Government Departments or, I have to say, to other Member States where the trade was taking place or to the Commission. Chairman (Mr Meacher) 1st December which year? (Mr Meacher) Right. (Mr Meacher) Indeed. I have just indicated that we had discussions with the recycling industry in February 2000 and I am sure several meetings thereafter through 2000. What I am saying is that prior to that apparently this export trade, on a substantial scale, was not known. Diana Organ (Mr Meacher) Of course we had that technical knowledge. I think we would say at least half rather than two thirds but certainly 50 to 60 per cent is contained in the foam. We fully understood that. Of course that is completely different from the issue which is at the heart of this of whether recovery from foam applied under 16.1.2 or 16.3. We were not disputing the need for it, the desirability, we were questioning the basis of the date at which recovery would be made mandatory because it mattered for our industry because we did not have the technology. That was the sole issue. Mr Lepper (Mr Meacher) This is Dr Batchelor who gave evidence to you the other day? (Mr Meacher) Yes. First of all, I accept, and have made clear, my sharing your view of surprise at our not knowing about the export trade but I do not accept the other point that you made that we had a knowledge gap, as you put it, with regard to the chlorine loading of foam. I do not believe that. I think Dr Batchelor is being a little perverse if he thinks that we were just simply playing for time. He, of course, is defending his position in the Commission, I entirely understand that and I do not want to be at loggerheads with the Commission, I simply want to explain our position. I think it is not unreasonable that we wanted clarity as to whether recovery from foam fell under 16.3 and therefore was "if practicable" and we then discuss what that means and how our industry has time to install the necessary technology or whether it is under 16.1 or 16.2. To say that we were simply playing for time, engaging in semantics, I simply do not accept. I just say to any objective observer or listener to the arguments to make up their minds. I am absolutely convinced of the reasonableness of our position. I repeat, we raised it on nine separate occasions seeking clarification. I do not think one could be more reasonable than that. Since you do mention the question of semantics, I did take the opportunity to look at the evidence which was given by Mrs Marianne Wenning and Dr Tom Batchelor to you. I must say I could not help but observe that they themselves even at this very late point in the argument appear to be contradicting each other. I am not sure if this appeared to the Committee. If I could refer you to paragraph 230, you probably have not got the text in front of you. At the end of paragraph 230 Mrs Wenning is speaking and says, and I quote her words "so foam is the product which is not mentioned under Article 16.1 and not under Article 16.2 so the recovery of ozone depleting substances such as CFCs from foam would be required if practicable", in other words under 16.3. "So for us" she says "it was never a question of whether there was the demand to recover CFCs from foam but always the question 'is it practicable?'". Now that is the most senior official from the Commission speaking and I think if she says that it is not unreasonable that I should be repeating it. However, almost immediately afterwards, Dr Batchelor in paragraph 233 says, and I quote his words, "so this Regulation by covering 16.1, 16.2, and 16.3 was very clear to us from the beginning that no matter which components of a refrigerator you were talking about, no matter how you interpreted it, that required both the recovery of the CFCs from the foam and from the compressor". I am not saying which is correct, I am simply saying that they are incompatible. I think if the Commission, even at this stage, and its most senior officials, gives an incompatible interpretation that throws a pretty searing light on the difficulties we have all had in the last three years. (Mr Meacher) I can only give the evidence and I leave it for you, Mr Lepper, to draw your conclusions. The way we left it was that the Commission finally retreated from the view that they had taken all through that foam was a product and therefore came under 16.3, that was a view they took right up to the end, until June 2001. We accepted that view, even though we had doubts about it, because the industry wanted certainty and so long as a view was taken one way or the other about what it actually meant we were going to accept it. For that reason I am still a little surprised that the matter continues to be raised. We have accepted the position in June 2001 and we have acted scrupulously, promptly and, I hope, effectively since then to try and deal with it in the light of that agreement in June 2001. Chairman (Mr Meacher) My answer to that is if we are talking about "if practicable" then we are moving into different territory because the question then arises ---- (Mr Sharp) I did, I did. It was always our view that that was the relevant consideration. In the end the Commission took a different view and we accepted it. All I am saying is that if Dr Batchelor thinks that "if practicable" is actually the real consideration, that brings him into alignment with Mrs Wenning, I agree, although it is rather contrary to what he said a little earlier. The question then has to be decided what is meant by "if practicable". It might be a question of if that technology exists in another country, fine, then it is practicable anywhere, or it might be, yes, of course it is practicable because it exists elsewhere, but we have to look at the practicalities of investing in our own country and the timescales which are required for that. Mr Martlew (Mr Meacher) I was asked, if I remember, by the Member for Mid Bedfordshire, who was the Opposition spokesman on the environment, and I have not had the advantage or disadvantage, whichever it is, of looking again at the script, but if I recall he raised the point that the British Government had been incompetent. I was incensed by that. Maybe I should not have risen to the bait but I did, I think it was very unfair for all the reasons I have given this afternoon. I think it is a judgment which cannot be sustained. I simply responded in accordance with the badinage which goes on in the Chamber by saying it is not we who have been incompetent, it is the Commission. I do regret that as a result of that, of course, there was a great deal of discussion about the UK Government and the Commission at loggerheads and I certainly did not intend that. I was responding off the cuff in the heat of the exchanges that occur in the Chamber to a provocative statement. Does that answer your question? (Mr Meacher) I would not say it again in cold blood, no. I think there is a different way of approaching this and that, I think, is the serious way which we have now accepted. (Mr Meacher) For all the reasons that I have given I do not believe that British civil servants behaved in a deficient or improper way at all, not at all. I have looked at this with great care and I do not believe that any person on the British side has failed to do what is necessary in the circumstances. As I have said, there are lessons to be learned and I do not simply want to say "we are fine, it is all the Commission's fault", I do not want to say that. I am sure the Commission did not want this to happen. They did not expect it to happen, none of us expected it to happen. We have to learn the lessons of what has been obviously a very regrettable episode. (Mr Meacher) Do I welcome? (Mr Meacher) I do. I do. (Mr Meacher) No, I would not. I do not think they were stalling. I think what they were doing was saying we need to be clear about the basis on which recovery from foam, which is a technology the UK does not have, operates. That was what they were saying, no more, no less. They were asking a very simple question. We could have got an answer as early as February 1999 or on any of the eight occasions before June 2001. If we had, we would have been in a much better position to put in place what we are now trying to do but, unfortunately, it is now late in the day. (Mr Meacher) No, no. I fully accept the view which has been put by the Chairman and several other Members that there is a high level of chlorine loading in the foam. In fact, most of the CFCs do occur in the foam and clearly it is desirable that it should be extracted. Certainly the UK Government wants that to be done. Our concern is that we should be able to do it without fridge mountains, without finding ourselves in the position in which we now are. If we had known the position three years ago there would not have been a problem. (Mr Meacher) As I stated earlier, if we had then insisted with our own industry that it had to be undertaken even though there was uncertainty about the application of the EU Regulation I have absolutely no doubt that we would have been chased out of town on the grounds that we were gold-plating, we were going beyond what was actually required, we were imposing costs when in the event it might not be necessary. To require the industry to spend ---- We are now talking about eight to ten plants, they could cost two to three million each, this is a substantial cost, and to require them to do it when they would say that there was no requirement apart from the caprice of the British Government in enforcing it when no-one else was subject to the same requirement, we would not have got away with it. (Mr Meacher) Another way of putting it, Mr Martlew, is that we were sensitive to the reasonable request of the industry to have certainty. The right way to solve this is not to go ahead and do it when we do not have to, but to get certainty about what is required, get it as soon as possible, and then we all act together. (Mr Meacher) You say that we knew we had to ---- (Mr Meacher) Yes. (Mr Meacher) For the reasons that I have given. It is desirable that this is done, I entirely agree. The question is the speed at which it is done and whether it is done in a manner which minimises costs for the industry and whether the industry understands that it is not unilaterally having burdens imposed on it that do not exist anywhere else in the Member States. The way to resolve all this to get certainty from the EU and then we proceed. If we had done this unilaterally, it was not just that I was afraid of the industry, I think we would have had intense difficulties in enforcing it and they would certainly have said ---- Mr Mitchell (Mr Meacher) The problems that are occurring now are not problems from the industry but, of course, problems from everyone else, in particular local authorities, questions of cost, which of course Government in the end is now having to bear. Diana Organ: But you have not paid the money to them yet. Mr Martlew: Just to jump a question, why did you not then decide instead of spending, and I am not sure how many millions, whether it is going to be 100 or 200 million or less, not just say to the EU "We cannot do it for a year. We cannot implement this Directive, we will do it as soon as we can"? We are all well aware that the French do not allow in British beef, that has been going on for about five years. Why did you not just say that we could not do it for a year? There are other countries in the EU in a similar situation as we are. Chairman (Mr Meacher) Indeed. I think there are four countries, and maybe more, - France, Portugal, Ireland and Greece - who to my knowledge have so far taken no action. Of course, the consequences are that the Commission is considering infraction proceedings, and indeed it would be very surprising if they were not. In other words, they will be forced to do it and they will pay a fine for the period of time since January 2002 when they were not putting it in place. We obviously did consider whether we could postpone it, whether we could get a derogation, the fact is if we were going to go for a derogation, as indeed the French proposed, I think, at the end of 2001, then we would have to get the agreement of the Commission, and I am absolutely certain that would not have been forthcoming, and the agreement of all other Member States, and of course Member States who are sitting pretty because they have already got the technology in place would not agree. The other point, of course, about could we not have more time is if it had been a Directive we would have been in a much easier, more flexible position but this is a Regulation and it becomes applicable in the court of law of each Member State on day one. If on 1 January we had said "Sorry, we are not ready for it, we are going to spend a year", the industry could have taken us to court and said "this applies in this country, the UK Government is failing to take action, we want them to be required to take action and penalised because they are not" and they would have won. Mr Martlew (Mr Meacher) As I have said, we were not in a position to get an extension of time because we could have been taken to court immediately by any representative of the industry who stood to gain from this Regulation and they would have won because it is directly applicable, it applies in every country from 1 January. There is no exception to that and there is no provision whereby a Regulation can simply be extended. The only change to European legislation can be made by the Commission and, as I say, there is no question whatsoever that the Commission would not have agreed. Other Member States were happily implementing it who already had the technology and the Council having passed the Regulation is bound to enforce it. (Mr Meacher) My understanding, and I cannot be certain about this, I am obviously dependent on the information we get from our embassies, is that there may be four or five countries that have the technology to deal with all the fridges in their own countries. That leaves ten. There are at least four who, as far as I know, have not done anything. The remainder in the middle, and we are in that area, are doing the best they can now to try and implement. We have had a mobile plant which can process 150,000 units a year in operation in Sussex since 14 March. I hope that there may be another mobile plant, I have reason to think another mobile plant may be operating before long. We expect two fixed plants, each of which can process 300,000 units a year, to be in place by the end of June. I believe we have done everything we can to put it in place. Can I just say one other thing which is quite important. We were informed, and I have an e-mail of a DTI minute which was sent to us, of a DTI meeting, quite properly, with the recycling industry, which I think was in June 2001 or thereabouts, saying that they would be able in the timescale available to produce the plant necessary by the date the Regulation came into operation. (Mr Meacher) As we have found out, I am afraid, it was not the case. Mr Mitchell (Mr Meacher) There were a number of descriptions there which ---- (Mr Meacher) Whilst I see the thrust of the argument that is not the wording that I would use. The industry wanted certainty about when they would have to do this. For all the reasons I have given repeatedly, I think that was reasonable, we did our very best to secure it. Come 1 January 2002, if we had done nothing those representatives of the industry who already were beginning to put in place investment plans ---- Investment does not come on stream in a matter of weeks, you get technical standards, you go to tender, you find a plant which meets your specification and you go to the bank, this is a long process of preparing for a major investment. They began that in the second half of 2001. If we had then backtracked at the beginning of 2002 I have no doubt that they would have dealt with us through the courts and, I repeat, there is no question, they would have won. Mr Mitchell: Okay, that is a tenable position but it brings us back to "if practicable". It is practicable to run the London Marathon wearing a 120lb diving suit but you would be fairly daft to do it. If you are saying that you had to implement this thing in full including foam from 1 January, when it was not practicable in this country, why did you not ask for a delay? Certainly you would have had a strong legal position for saying "it is not practicable"? It is the euro fanatics who are trying to interrupt me again. The Committee suspended from 4.21pm to 4.33pm for a division in the House. Chairman: Minister, I know you have got other items in your diary and we would like to make progress. I will now ask Austin Mitchell if he would kindly resume the questioning. Mr Mitchell (Mr Meacher) I entirely agree that that is a reasonable assumption to make. (Mr Meacher) That is the problem, my advice is that it was not. (Mr Meacher) And that once the Regulation has been passed by Council which says that this becomes applicable on 1 January 2002, the only way that can be changed is if the Commission is prepared to accept the proposal and it is also agreed by all the other Member States. I repeat, there was just not a snowball's chance in hell, as they say, of the Commission agreeing. (Mr Meacher) I am sorry, the question was? (Mr Meacher) Yes. If we had made such a request it would have been on the basis of "if practicable" and that we needed time, which has been our argument all along. We thought about this very carefully and regrettably we decided there was simply no option. Chairman (Mr Meacher) Chairman, well before November 2000 we had already considered ---- You are talking about November 2000, sorry, as opposed to 2001. (Mr Meacher) As of November 2000 we were beginning to become extremely concerned at the delay in reaching clarification. As I have indicated, at one of the meetings which was in March 2001 just after the date you have indicated we did state explicitly that if we did not receive clarification it would jeopardise UK compliance with the Regulation. All that we then got back was a revised clarification paper which said "this is a grey area". It noted that technologies existed and were being developed to recover controlled substances from foam but that they were not yet widespread throughout the EU. It repeated the Commission's understanding of its interpretation that Article 16.3 covered foam was in line with the Council's intention during their negotiation. It was not for lack of trying on our part to find a way through. (Mr Meacher) I cannot believe, Chairman, that you would listen to, let me be the first to say, my long and tedious recital of what happened over nearly two and a half years and say we were in any sense whatsoever responsible for delay. I totally and utterly refute that charge. We wanted certainty. We returned to it endlessly, repeatedly. I just do not see how we could be accused of delay. We wanted clarification. In the end we accepted a definition of "if practicable", or we accepted a view of the mandatory recovery from foam which was not in accordance with our view but as the only way of finally settling this issue before we actually got to January 2002. We were assured by the industry that that was sufficient time but in the event it has turned out not to be. We did everything possible to try and clarify this and to get clarification. I do not want to go on the attack despite cajoling from Mr Mitchell but ---- Mr Mitchell (Mr Meacher) I do not think fault is on our side. Chairman: You have roused Mr Mitchell now so I have got to let him have another go. Mr Mitchell (Mr Meacher) Not altogether. I have great respect for Mr Jones of Biffa, who I know well. We were doing exactly what he was saying and in the light of the legal advice which we had received, our own legal advice, namely that recovery might come at 16.2, and of the strong arguments which have repeatedly been made in this Committee this afternoon that I entirely understand that some Member States were able to do this perfectly practicably, UK officials at this point, which was early 2000, informed the industry that it was likely that the outcome would be that recovery facilities would be required. We said to them that we expect that this is going to be required and their response to us was to continue to press us strongly for certainty regarding the requirement for extraction from foam as a precondition for securing the funding to invest in facilities. It is not as though we tried to conceal it from them, we did the opposite, we advised them that they probably would have to do it, but they said to us, not wanting to spend the money no doubt, "tell us when we have got to do it". Chairman (Mr Meacher) I totally understand that point of view and, indeed, I have a lot of sympathy with it. The problem is I could not, using the EU Regulation, require the industry mandatorily to extract CFCs from foam because that position had not yet been established, the industry would have said "if practicable". We could have put in place, I suppose, a domestic regulation even in the face of the continuing confusion and uncertainty from the EU side and if we were trying to do all that, all I can say is I think there would have been great resistance within Government to forcing industry to do something which they were not required to do at considerable expense as a unilateral burden that trendy Mr Meacher in DEFRA or DETR was imposing on the industry when they did not have to. I think it would have been very strongly resisted and I think the industry would have been up in arms and no doubt making calls to very senior people in Government saying it was unnecessary and would they call him off. That was the situation that we were in. Paddy Tipping (Mr Meacher) Yes. (Mr Meacher) I entirely accept your premise, and this is one of the lessons which we believe need to be learned, we need to take a more proactive view if we can to see these things as a business opportunity and less of a business burden. I think that is one of the morals coming out of this episode. However, we are where we are and the answer to your question is that we have awarded £6 million through the RFG for the period up to the end of fiscal 2001 and I am committed to making a statement, which I hope will be very shortly, about further funding available. Until I am able to make that statement I am afraid I cannot get into detail. Our best estimate, in answer to your question, is that the cost to the UK this year might be somewhere around £40 million. That will decrease over time as plant is commissioned, more plant is commissioned. I have indicated, I think, the Environment Agency has had applications for three mobile plants and nine fixed plants. Not all of those may materialise but they are serious applications to the Agency in regard to licences and planning permission. I think the costs will decrease as competition becomes established. I think it will reduce too as more fridges that do not need treatment enter the waste stream because, of course, the industry moved away from the use of CFCs and HCFCs in the mid-1990s and, and this is very important which has not been mentioned so far, my very considerable concern to restore retailer take-back, if at all possible. That, plus the refurbishment of a proportion of take-back fridges, would certainly reduce the cost to the waste stream. With regard to the last issue, which is the only one probably in my power, I am very keen of course to ensure that take-back is restored. That does depend of course on the agreement of all the parties, it does depend of course on the question of financing, that is entirely understood, but I do believe from the several stakeholder meetings, at least the three or four I have chaired, that all parties are anxious for that to happen. At least 10 to 20 per cent of the take-back fridges we believe, on historical evidence, should be able to be refurbished and sold on and not put into the waste stream. I do believe the 40 million is a ceiling rather than a floor, and I am working on it. (Mr Meacher) Yes. (Mr Meacher) First of all, Mr Jones, I repeat for whom I have regard, is nevertheless of course a member of Biffa and part of the waste industry, and you would not expect him to produce the lowest conceivable figure, you would expect him to produce a generous figure. I would dispute his figures and I believe ours are soundly based. (Mr Meacher) That depends, of course, on how quickly the stockpile is cleared. Of course that depends on the amount of new investment and new plant which is put in place, and it also is highly relevant to the number of fridges which are exported. The evidence I have on exporting is that the Environment Agency has authorised the export of 95,000 fridges to Germany, of which about 3,000 have already been shipped, 10,000 are in the process of being shipped and there are applications received to ship a further 170,000. Those are quite substantial figures. Our belief is that if the level of investment in new plant materialises as we expect in line with the figures, and there are nine applications and some of those are much more certain than others, I would hope the stockpile could be cleared by the end of 2003. (Mr Meacher) I do not want to go into details and I hope it will be understood, it obviously is sensitive, we have to discuss this of course with the LGA, and I would prefer to do that before we make an announcement. I think I am right in saying, I hope they would not disagree with this, that the £6 million we provided for the period from 1 January to 31 March 2002 is adequate for storage alone. But, of course, you have to add for all those a processing cost and we have been looking very carefully into that. I would rather not go into figures at this point. (Mr Meacher) Obviously three months at £6 million is £24 million for a year. As I say, I do not think you can just simply make a straight line assumption (a) because of the increasing level of exports (b) because if retail and take-back could be restarted, refurbishment and selling on will make a significant impact on that total and (c) there is another source of disposal which has not been widely used and that is incineration. There are two incineration plants, one in Ellesmere Port and one I think in Southampton. (Mr Meacher) The total cost of £40 million or whatever it turns out to be is a direct result of us not being able - I say "us" but I include the industry, all the stakeholders - to put provision in quickly enough to deal with this and have it ready before 1 January 2002, yes. (Mr Meacher) I am not sure if they have actually had it because we have just passed the fiscal year. If they have not actually had it yet, they will have it very, very shortly. It will be paid in the form of SSAs, that is the way they prefer it to be paid, and the Government rather shares their view that grant should be paid in that more flexible form. (Mr Meacher) The retailers organised their own take-back prior to November 2001 when they stopped it. They stopped it for two reasons. One was the lack of the export trade because, I have no idea of the figures but they clearly made a profit out of the export trade. Secondly, on the other side of the accounts, they were then having to incur a loss because of the increased cost of disposal. They said, perfectly reasonably, they could not continue without adequate treatment facilities becoming available. Now the facilities are coming on stream, the main barrier is the increased cost of disposal. We are trying to resolve this through recycling credits for processors, but of course the system has to be very carefully designed so as to not fall foul of state aid rules, to prevent any abuse of public monies, but we are, I hope and believe, very close to being able to come forward with a statement on that. I have done everything I can to facilitate this re-starting. I have had meetings, three or four which I have chaired, and I have had private discussions with a number of them about blockages, what needed to be done. I believe they want to continue it but it has to be a system in place in which all the partners are playing their role and in which, let me be honest, the Government is providing sufficient money to oil the wheels. (Mr Meacher) Clearly if it were to be set up, all the companies would have to agree. I have no reason to doubt that they would all be willing to, I do not think there is a difference between them. On the question of whether I regard it as a responsibility, I think the retailers themselves would say that this was a facility that they offer to their customers, it is one of course which was beneficial to them because someone buying a fridge is only too pleased if the company says, "We will install it and take away your old one", so it helps sales, but I would not regard it as a responsibility, it is a commercial opportunity which they regret losing and which I am keen to see restored. (Mr Meacher) As soon as I can get agreement to the system which in the end hinges on the question of money and being able to make a statement about the availability of funds for next year, and I repeat I hope we will be able to do that fairly soon. (Mr Meacher) I hope not and I believe not. Diana Organ (Mr Meacher) My view has always been - my understanding has always been - that they would be paid at the end of the fiscal year. Now I agree, we are just past that. Maybe the best way I can answer the question is to write to the Committee and set out exactly those dates. I am sure we can answer the first question. I can only answer the second question when I am in a position to make a broader statement. Chairman (Mr Meacher) No, it is certainly not self-financing. I was not suggesting that. Something of the order of half of all fridges - the industry may have a more accurate figure - were subject to take-back before November 2001, so that is, I think, the most that we could expect to re-institute. Of that, perhaps up to 20 per cent may be able to be used by the waste management industry, refurbished and sold on, so we are talking about probably at best 20 per cent of 50 per cent. The only point that I was making was that that does significantly reduce the waste stream and reduce the cost, but it is certainly nowhere near self-financing; there will be a continuing significant cost for one year at least, and there will be some cost, I am almost certain, into next year, but it may be much lower. (Mr Meacher) Until the stockpile is cleared, Government is going to have to pay. I do not think it is reasonable to expect any other party to pay. When we come to look for the key period after the stockpile has been cleared, which I am saying I am hoping to achieve by the end of 2003, obviously we then have to consider what are the appropriate arrangements beyond that point. I cannot add to what I have said today, but obviously that is an important consideration. (Mr Meacher) Obviously that is for consideration. The fact is that under the WEEE Directive that is how that is going to be financed. There are proposals under the end-of-life vehicles which are along similar lines, and of course the question is how that should be financed once, as I say, the stockpile is cleared in respect of fridges. Of course, the WEEE Directive does kick in statutorily in 2005, therefore the question you are quite properly asking me, Chairman, concerns the period of 2004 and part of 2005. It is not a long period, but how we meet obligations financially in that period has yet to be decided. Mr Martlew (Mr Meacher) There was, of course, discussion amongst Member States which very largely reflected their economic self-interest. The countries that had their own technology were very keen that there should be mandatory recovery of foam from domestic fridges right from the start, because they knew they could manage it and they knew they had a market for fridges from other countries. Then there were other countries like France and Finland who were saying that they needed to seek clarity about what was meant by "if practicable"; and, of course, there were countries - again France is part of this and some of the southern States - who simply did not want the Regulation to go through, did not want to take action. So there are different attitudes, but the fact is, I repeat, it is a Regulation, it is directly applicable from day one, and Member States that have not taken action face the consequences. (Mr Meacher) I think we had a pretty good idea, yes. (Mr Meacher) I would not say that we knew that some of them were going to ignore it. Indeed, I am quite surprised that some of those countries are allegedly ignoring it. I expect them to make more effort. We have been caught with the problem, we have done everything possible to meet it, and I expected them to do the same, but it appears some of them have not. As I say, the financial consequences in the end will be greater. (Mr Meacher) That is right. (Mr Meacher) There will be technical standards applying to the newer fridges, non-CFC, under the WEEE Directive, which are going to require reprocessing. There is a market there, and I hope - I hope - that industry will get the message this time, perhaps quicker than they did before, that they should plan in advance to meet that market. (Mr Meacher) You yourself said that the newer fridges, under the WEEE Directive, the non-CFC fridges, will still require treatment. That is true. That requires higher standards being met. We need to plan for that and, of course, private industry needs to invest before they are required to do so. That have time - it is 2005 - but we need to think about these things in the light of what has happened over fridges. Diana Organ (Mr Meacher) It will not be a fiasco either for us or for ELV. I did spell out the three lessons, at the end of the memorandum. One of them obviously is that where clarification is necessary it should be done more quickly. Whatever is decided, we should not get these kinds of delay. Secondly - and this is more tentative, but I do feel this quite strongly - where an interpretation (I use that word advisedly) is made which actually amounts to quite a significant adjustment to, or amendment of, the whole thrust of a Regulation or a Directive, I think we should give consideration to the matter going back to Ministers. I have whole-hearted respect for officials but actually in the end the decision on 11 June 2001 was made by senior officials from the Commission and senior officials from Member States; it never went back to ministers; this was never drawn to ministers' attention. We never had a ministerial discussion that some countries were going to be in difficulty and how should we try to ensure at that stage they would have time; the matter never arose. When the decision was finally made, it was made by officials not ministers. Thirdly, I do think the real lesson coming out of this is that where there are technical problems, and this was a highly technical and complex regulation, there should be time written into the timescale of implementation of a regulation which allows for things to be resolved. The problem which arose in December 1998 - for reasons I well understand having been in the chair myself when one is very keen to have successes for your country - was because the Austrians were very keen to have a success in getting political agreement, in getting a common position, they wanted to move rapidly to a conclusion of this process, they did not want there to be a lengthy and time-consuming examination of all the nitty-gritty details. Later, the Portuguese, who succeeded them in the presidency - and I am not in any way administering censure at all, these are the political pressures - found themselves in the position of having to deal in conciliation with the amendments moved at Second Reading by the European Parliament and their minds were focused on getting agreement, getting conciliation and solving the problem, they were not concerned about matters which the European Parliament had never raised. So we do need to have a special provision to ensure there is adequate time for sorting out all the technical problems. Those I think would be my three lessons. Mr Mitchell (Mr Meacher) I believe that is so. Chairman (Mr Meacher) I can safely look to you, Mr Chairman, as someone who has been a Treasury Minister and I am sure was extremely busy and who dealt with dozens and dozens, if not hundreds of issues, many of them simultaneously, the only way in which ministers can keep track on these things is if these matters are raised with them by officials. I am not complaining that these matters were not raised with me by officials, what I am saying is that many of these were highly technical issues and I think they probably should be ---- (Mr Meacher) The officials in the UK, as I have indicated, I repeat again, on nine separate occasions raised this with the Commission. I think they were right to do that, I do not think I could have added to that. There is a question which I think is raised under the lessons to be learnt, which is that you could argue officials should have raised it with ministers here in the UK in order to increase the pressure on the Commission; there is an argument for that. There are actually counter-arguments that in the case of this particular regulation, the Commission itself when it drew up its list of clarifications, produced 23 uncertainties, so this one which we have spent the whole time talking about is only one of many. I did, it is true, and you may be interested in this, as a result of the whole fridge episode raise with the Department how many regulations or directives, in other words all sorts of EU legislation, were currently active. (Mr Meacher) Shall I tell you the answer? (Mr Meacher) It is 40. What I have asked is that I want to have an implementation schedule for every one now and in the future, so I can see if there are problems arising and if any are being extended and likely to reach a point at which we are at risk of infraction. I do believe that is probably the only way of keeping control of the situation. Of course I have meetings with officials, I suspect if you ask them, you will find I have far too many meetings with officials. I think it is important to see this in context, we have concentrated on one single issue of a highly technical and complex regulation when there are 40 at any moment in play and when there are probably elsewhere within the brief, I do not know, another 50 issues going on on different issues. Chairman: But that is the nature of Government; lots of things going on and you suddenly find yourself in front of a Select Committee talking about fridges! Paddy Tipping (Mr Meacher) I was, I think, informed about the export trade as a matter to note, not with regard to any decision being taken, but something I ought to know about, in 2000. To my recollection, I was informed that there was a problem in I think July 2001 about the managing and recovery from foam, and of course I had subsequent meetings with officials and there were a number of other submissions made in the second half of 2001. (Mr Meacher) I think that is correct. If it is not correct, I will write to the Committee, but I believe it is correct. Diana Organ (Mr Meacher) I am glad you said that because everyone of us have been exhibiting hindsight to a very high degree this afternoon. (Mr Meacher) It is an enormous privilege. (Mr Meacher) I have already said what I consider to be the three main lessons we ought to learn from it. If these were implemented, we would have had an earlier clarification within Europe about the meaning of "if practicable" and where recovery from foam fell under 16(1) to (3). We would also have had more time to sort out the technical problems, the pressure on the presidency, first of all the Austrian and then the Portuguese, would have been diminished if there was time set aside for settling all of these matters. My third point was it should have come back to ministers. (Mr Meacher) That is what I, as a minister, would have preferred. With the gift of hindsight, which of course none of us have at the time, this should have been discussed, I suppose you could say, at the Environment Council, but hindsight is too big a concession. The industry was not raising it with us, there were much bigger problems about methyl bromide and HCFCs. If the industry was not raising it with us, we did not perceive there to be a problem, the industry was not telling us there was a problem. No other Member State raised it, the Commission did not raise it. It is only with hindsight that these things could be seen. Mr Martlew (Mr Meacher) It went through the Environment Council in December 1998. (Mr Meacher) Yes. (Mr Meacher) I was trying to explain. The decision was made to implement the Directive in the Environment Council in December 1998. There were some changes wanted by the European Parliament, so there was conciliation, but it was finally agreed and came into force on 1 October 2000, so at that point the decision was taken. The only question was what were the implications of actually implementing it. It was only in the beginning of that year that we began to understand that there was a serious problem about which article recovery from foam came under, was it 16(3) or not. (Mr Meacher) Sorry, maybe I misunderstood your point. Of course, the formal decision to implement it had been taken, but we now find we have got a problem, so are we, the Brits, going to implement it or not? Yes, we did have that discussion, and I did take the view that whilst I would have been prepared to look on this sympathetically - I have to say this - I was certainly told, and I agreed with the advice, that there was no chance whatever that we could escape responsibility. I learnt, I cannot remember at what point, that the French were not implementing it, and obviously it would be tempting to follow them, but I thought that kind of thing would be suicidal and it would be costly, and I do not think that that was a serious option.. (Mr Meacher) As I have said, the industry did tell us in, I think, either June or July 2001 that they could meet the deadline of 1 January 2002, that they could get plant in place to deal with the problem. (Mr Meacher) I do not wish to cast an accusing finger anywhere in this. I think there are lessons for us all to learn. That is what they told us, and I am afraid it has not happened. (Mr Meacher) No, I knew perfectly well that if we did not manage to get the plant in place, there would be a cost. (Mr Meacher) That is true. That is true at the time at which we were told it, but I must admit that as we got into the autumn and the plant was not there and it was perfectly clear it was not going to be there, I became acutely conscious that there was going to be a significant cost to Government. Chairman (Mr Meacher) The truth is that we needed no reminder from Dixons to know that we had a serious problem upon our hands in June 2001. (Mr Meacher) I am sorry if the author of the letter felt that he was not getting a response from the Department. I do not know the details. Obviously I regret that. (Mr Meacher) Okay. I am aware of these letters. (Mr Meacher) I am aware of these. (Mr Meacher) I am aware that there were letters sent by Dixons and that they were discontented towards the end of 2001. I am perfectly well aware about that. What I am saying is that we knew we had a problem from the middle of 2001, and we did our best to deal with it. The problem is that you can only get investment from private industry if they know that there is a market there. They could have anticipated that there was a market there, as from June 2001. I was doing my level best to try to get companies that have a track record in this involved and trying to invest. As I say, when you are going to invest £2 million, £3 million, and if someone else is going to bear the cost - namely, the Government - you ensure that every condition is in place before you take the plunge. You do not have an economic incentive to get on with it. That is the problem. The only way in which I have been able to try to speed this process up is through saying to the Environment Agency, "When you get applications, obviously you've got to look at all those applications for a licence, you've got to look at those rigorously and stringently, no backing down on the rules, but be as helpful as possible, provide all the information required and try to facilitate these investments as best we can." The other requirement is, of course, the money. I am in no doubt about the importance of being able to place on the table a significant sum of money, but that has to be negotiated and that, of course, is quite difficult. I have been wrestling with that for some considerable time. Chairman: I think that that is a good place, two days before the Budget, to draw our questions to a conclusion. We shall take that as a representation, and be sure that the Chancellor is made aware of the text of the evidence, and that all that you have said is available for him to view in framing the final text of his Budget speech. Can I thank you and your officials for coming here and for spending so much time. We cannot take away that which you have said, but we can offer you the facility to add to it if there are other things on which you kindly promised us further information. Thank you very much for answering our questions so fully, we appreciate it. |