Select Committee on Trade and Industry Minutes of Evidence

Examination of Witness (Questions 180-183)



Mr Lansley

  180. I was going to say that if the bulk of the portfolio is in long term gilt with about a 2.5 per cent return, it makes sense to discount at 2.5 per cent in relation to the liabilities that they are intended to meet.
  (Mr MacKerron) If you go to a proper funding system in which you are talking about real money then you have to think about what is the likely real rate of return, as opposed to the Treasury system which is much more a matter of public sector appraisal and not really relating directly to cash.

Mr Burden

  181. Could we just talk for a minute about regulation? There are a whole range of different regulatory bodies involved in the industry and everybody we have spoken to has emphasised the need for more joined-up regulation and for the relationship between the LMA and the regulatory bodies to be robust and to work, and the White Paper says that as well. What I am not clear on is how anyone is saying this should be achieved. Have you got any ideas?
  (Mr MacKerron) It is a very difficult question in the sense that in some ways it is more difficult than that because, on the one hand, you want the regulators to be involved and co-operative; on the other hand you want proper tension so the regulators can be seen to be independently regulating and giving a certain kind of public assurance that things are being done properly. I do not have any formula; I do think it is important that HSE and NII and the Environment Agency work together as closely as possible so they do not give conflicting or confusing or over-bureaucratic messages to the industry. It is a process that I think has started and should be encouraged but I am not a specialist in the field and I do not have some recipe for specific and concrete improvement.

Mr Hoyle

  182. Can I take you on to Nirex and ask whether you believe it should be made independent and, if so, what kind of arrangement do you want to see developed from that?
  (Mr MacKerron) I think there is a good case for Nirex to be made independent—and as I understand it, its main shareholders have already suggested that would be a good idea at meetings of the Nirex board—largely because I think, in the process of creating public trust and greater openness and transparency, Nirex will be seen to be acting in the public interest rather than in the interest more narrowly of waste producers if it is freed of direct ownership ties from those waste producers. The question of Nirex's long term future is not yet established. There is potential mismatch in decision-making between the relatively lengthy DEFRA timetable for waste and the relatively rapid creation of the LMA, and it is important that one should not get too far ahead of the other. But on the immediate question you ask, yes, there is a good case for Nirex to be independent.


  183. Professor, if there is anything you would like to add or supplement we would be grateful to receive it but we have a deadline of next Wednesday.
  (Mr MacKerron) I would be happy to do that.

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