Examination of Witnesses (Questions 220-231)
MR PETER
JONES, MR
PHIL CONRAN
AND MR
DAVID SAVORY
WEDNESDAY 22 JANUARY 2003
220. I want to ask you about planning.
(Mr Jones) Finally, the DTI did not want any reference
to producer responsibility, I guess, because some people in the
DTI cannot make the connection between funding waste at the end
of its life and the way you design things at the front end.
221. You have lost none of your trenchancy over
the intervening years.
(Mr Jones) We might as well be explicit, sir.
222. Can we tackle the whole subject of planning
because I notice you say in your evidence with the curtain coming
down on major landfill sites, there may be a need for each one
of those to spawn five or more new specialist processing plants.
How realistic is it under present planning arrangements that room
will be found for those to be built?
(Mr Jones) I will hand over to David in a tick on
the detail of that but broadly, yes, what we are saying in Future
Perfect is that if you shut a typical, large landfill site
(one of these 350-odd ones out there) each of those commercially
needs to be "consuming" about a third to a million tonnes
of waste. Quite often now they are doing that in isolated rural
locations, out of the sight, proverbially out of mind. If you
look at the more complex system that needs to come in with recycling,
with composting, energy, however, you do it, through direct combustion
or gasification, by and large, those facilities—and the
proximity principle is also driving this—have to be about
25,000 to 50,000 tonnes. By a simple process of division, we are
looking at maybe losing 100 landfill sites in the foreseeable
future, the next 10 years, which will probably create the need
for around 2,000 of these sites that logically would have to be
located closer to the point of waste generation, which is large
urban centres and people's homes maybe. The upside of that is
that our perspective is that you will have this activity occurring
in large sheds that will look to the outside observer very much
like a Tesco or an Asda or a Sainsbury distribution depot. They
will just be places where normal deconstruction is taking place
and there will be tight standards and there will be clear controls
in the public domain in terms of emissions, availability of data,
and so on. Where, indeed, we have already bought four of these
sites in strategic locations, our intention is to create maybe
a dozen of them roughly 50 or 100 miles apart and to look at road,
rail and canal integration in terms of what is moving around the
country. At the detailed end of course, we are grappling with
the up-front issues on planning and maybe you would like to comment
on the specifics of the system as we see it now, David.
(Mr Savory) If we look at the infrastructure which
will be required to deliver the diversion of municipal waste from
landfill, then we believe that the solution is actually quite
simple, provided certain things come together, and that is provided
the waste disposal authority is in tune with its planning authority
and is in tune with its waste local plan, and all that has gone
through a consultation process and it lets a contract and a contractor
is selected, then in the majority of cases the infrastructure
that is required will get planning permission and will get built
because there is a will within that local authority for all of
that to happen. It will happen within a process which has been
defined. Where it goes wrong in this sector is where the waste
disposal authority is not in tune with its waste collection authority
partners, or where the planning authority is not sending the same
messages as those in the waste disposal department. An example
there is Surrey. Clearly there was very much difference between
what the District's wanted, what the county wanted, and what the
planning authority felt could be delivered. We have a situation
where a contract was let four years ago or thereabouts on the
basis of two incinerators to be built; one got turned down for
planning by the authority and the other one has recently been
a recovered decision because it was perceived the decision was
taken in error and now may never be taken again. So if all of
those things come together, and they clearly should come together—and
there is no real reason why authorities within a larger boundary
should be working against each other but they do—then all
of that can happen. In terms of the provision of infrastructure
to deliver things like special waste treatment plants and facilities
for commercial and industrial waste, an obligation in the Directive
is for all waste to be treated, so there will need to be a whole
host of facilities for that waste. Then it is really down to how
the existing system is applied at a local level and in some authorities
it will happen and in others it simply will not because of anything,
from unsatisfactory applications, to a planning committee not
wishing to consent waste facilities. In terms of the process then
going forward, (trying to take out some of the encumbrances in
there), the Green Paper does nothing for waste. There is no impact
on waste in terms of getting facilities permitted in our view.
We are very concerned about the prospect of the life of a planning
consent being reduced from five years to three. What it effectively
does is it reduces by 40% the ability of the waste industry to
form a plan. Part of our strategy is certainly to get planning
permission for facilities which we will then sit on until it is
right to develop those facilities. We should shorten that period
of time and having invested an awful lot of money getting consent
we should then have a very short time. There is a proposal to
change the plan structure at a time when we have county structure
plans and district plans in place for all authorities. The Green
Paper now talks about having a new set of plans with a new hierarchical
plan probably at a regional level which will probably create more
uncertainty and confusion. PPG10 and PPG23 still do not provide
clear, concise guidance on the separation between planning and
licensing for waste facilities. It is still a muddle and there
is enormous overlap, particularly now we are moving into a IPPC
regime, between the areas that need to be covered in a IPPC permit
and those covered in planning (where now there must be a case
for a single permit system because there is so much overlap between
the two). Otherwise we need to draw a line between them and separate
them more definitively. There is an opportunity which has been
missed in not including waste treatment in the general industrial
use class B2. That was a separate consultation when the Green
Paper came out and that would at least have provided the facility
for waste treatment going to industrial parks without needing
planning permission and that would have opened up an enormous
opportunity for additional capacity to be created, but it has
been missed. Probably last but not least, permitted development
rights. There is a considerable burden on both the industry and
planning authorities in relation to small-scale developments on
existing sites, all of which need planning permission. Most other
industries have some permitted development rights, certainly within
the minerals industry, and that would be a great help to taking
the process forward.
223. Thank you. I am aware I have elicited two
rather long answers. People do not like waste and they do not
like having it treated next door to them. We are on the whole
quite keen on renewable energy. Do you think your industry does
enough to promote the renewable energy aspects, the waste stream,
and do you think that local authorities when determining planning
applications take enough account of what you are trying to do
in terms of promoting renewable energy?
(Mr Jones) As a company we have set ourselves against
mass burn incineration without energy, that is dead and buried,
but we are also against (and we would not propose in any of our
contracts) direct combustion mass burn energy from waste plant
that was integrated with a front-end segregation operation. We
believe that if you are going to burn waste directly and get the
renewable energy back then you do it through the FLOC route. If
direct combustion is unacceptable, either politically or socially,
then there is a strong case for recovering energy in the form
of gasification systems. The flagship project for us will be Leicester
City Council which involves about £28 million of investment
in an in-line system which has got intensive segregation in the
logistics phase (kerbside sorting and segregation) and then mechanical
biological treatment, to which is added sewerage sludges from
those same producers through the drains, and that is then gasified
back to be exported to the grid. What we are finding—and
it really touches on the last question—is it is the unitary
authorities that are most progressive in this area. The two cases
we have either running or building are in the Isle of Wight and
Leicester City where you do not have this conflict between collection
and disposal systems. Then you can open the gateway and say to
that authority, "Look, this is a great merry-go-round with
carbon. You can have that carbon back as electricity and steam,
or you can have that carbon back as a soil enhancer that will
sequestrate the carbon in the surrounding countryside through
the agricultural industry, or you can sequestrate that carbon
in the form of recycling because when you do that you take that
material back to the glassworks, you use less primary energy,
less primary carbon, to then reproduce that product and take it
back and close the loop." Even if you stick it in a hole
in the ground you still get some renewable energy back, albeit
less efficiently than through some of the other routes. Again,
these are points we raised in Future Perfect because there
is now among the Unitary Authorities a growing awareness that
all these solutions are a question of political decision but you
can go down each of these four avenues. Renewable energy is quite
important commercially for us. If you take a 10 or 15-year time
span, then a bet on the price of diesel, non-renewable energy
or electricity produced from non-renewables would be a fairly
safe one. If you look at what is happening to tradeable permits,
Renewable Obligation Certificates (ROCs), all the signs point
to a lucrative investment there, certainly on the contracts at
Leicester and the Isle of Wight. That is why we develop the Dutch
and, to an extent, the Belgian model for those contracts where
you have an arm's length company on which the waste company and
the local authority is jointly represented and they share the
pain and the gain. If they agree with us that energy offers a
stronger product than maybe the long-term market selling compost,
that is their call, against the technical advice that we can give
them.
224. Thank you. You heard our previous witnesses
this afternoon say that they would very much like the Government
to come clean on its policy towards incineration. Do you support
that view?
(Mr Jones) It is very much a local issue. Our preference
is for unitary authorities and a combined local body and, as with
any issue in industry, what you have got to do is link authority
and responsibility. I do not think nationally any administration
that says they are going to commit to incineration, however you
define it, would necessarily be prepared to take the political
kickback from that. They would be deeply unpopular.
225. I did not ask you whether you thought it
was realistic, I was asking whether you thought it would help,
not only in incineration but to rank the various processes is
terms of their impact on health and the environment.
(Mr Jones) I do not see that as a central government
role in terms of doing that. I think the role of central government
is to put down markers and define the standards and then enforce
that technically through the regulator, the Environment Agency,
but for local authorities to be supplied with the necessary support
in terms of database management systems and software systems on
a ready reckoner basis. Part of the difficulty at the moment is
that there is no-one out there who is offering that ready reckoner
and the last 10 years have been characterised, frankly, by a lot
of snake oil salesmen who have been going out claiming to cure
rheumatism and arthritis and all the other ills of society, and
of course many of these have never got off the ground, and indeed
huge amounts of public money have been wasted on what the professional
waste industry would have told them on day one were just complete
flights of fancy. Unfortunately, the ringmaster in that process
has to be a Ministry responsible for waste. As I say, it is open
to some doubt as to who is picking up to tab and then it has got
to be forced through the regulator.
226. You warned last autumn in relation to the
specific regulations dealing with cars, tyres, that whole tranche
that is coming there, that there was a looming crisis because
of the capacity to deal with the outcome of those new Directives
and requirements. Has anything happened since you warned of the
looming crisis to avert it? What in your view would happen if
no action were taken?
(Mr Jones) In terms of the first point, we see no
signs that the looming crisis has abated because if you take the
big issues, the regulations in terms of producer responsibility
do not appear to be putting any full liability on the producers
until 2005, 2006 or 2007, it is still not decided. Cars look like
being 04 to 05. What has happened in the meantime (amazingly for
the Treasury) but still what has happened is that we see government
putting in a lot of fudge money and, basically, £40 to £50
million has been slid into local authorities to cover the fridges
mess. We have been trying to find out what precepts are going
from central grants to local authorities to cover fly tipping
of cars; nobody seems to know that. Maybe that is worth a parliamentary
question because it is difficult to put a handle on it. All of
these issues of data flow from the fact that we do not have a
national management database, whether it is for domestic or industrial
waste. What has happened is that we are sliding into a subsidy
culture where Producer Responsibility will not sort out these
problems from the industry side for five or six years and in between
times we see that the pressures on the Treasury will grow and
grow and grow through market failures and subsidies to organisations
like WRAP (which tries to create markets for these products) will
also go up and up and up, vis recent talk about combining the
Lottery funding with the New Opportunities Fund, and the plan
to take £100 million out of the Landfill Tax and put that
back into the pot as well. So we are seeing this awareness that
more and more subsidies are going into inefficiently applied systems
in fragmented local authorities. There is no infrastructure of
unified data capture as to what is going on with regard to numbers
and quantities. We see those subsidies having to go up and up
and up until we finally pull through the Directives on producer
responsibility. On the second aspect—
227. What happens if nothing happens?
(Mr Jones) What happens if nothing happens? In hazardous
waste there could be stock piling. I do not think it will occur
in fly tipping because I am aware the Environment Agency are now
getting very interested in looking at data mapping flows, which
we believe ought to nail it, in conjunction with effective magistrates'
policies and enforcement in the Agency, and we are pretty sanguine
that that will happen. The Agency are moving to OPRA scoring systems.
They have put in the response to the Public Accounts Committee,
for instance they are recognising 80/20 issues here, that 80%
of pollution problems are associated with relatively small numbers
of players. We think they are getting much more sophisticated
about understanding where waste should be produced and there is
no apparent exit route for that waste going to proper facilities.
Producer responsibility regulations in packaging are beginning
to bite. A company was fined a month or so back £65,000,
which was effectively based on the money they had avoided by not
being compliant with the regulations. So it will be a combination
of rising subsidies from the central public purse, then there
will be significant increases in fines and, yes, there could be
some fairly big issues on fly tipping, but I would say that they
are probably in that sort of order.
Mr Chaytor
228. You have argued that the Landfill Tax should
be replaced by a Waste Disposal Tax, thereby different solutions
would be found. Why do you think that will work and why do you
think your arguments have not been taken on board by government?
(Mr Jones) To answer the easy bit, those
suggestions will not be taken up if there is confusion in government
as to what rate the Landfill Tax should be up at. If we are going
to have uncertainty we might as well have uncertainty on one tax
rather than maybe four or five. I made that point and I think
senior management in the agency support it because we all tend
to have lost sight of the idea that we should be minimising waste.
If you think of a Disposal Tax it takes society back to the concept
that you should not think that one method of managing waste is
bad and thus the only zero-weighted tax option should be "Do
not make it in the first place". Even recycling should attract
a tax, albeit maybe only notionally. What we are trying to do
is broaden that debate and get people to realise conceptually
that if we had this ready reckoner of environmental impact that
Mr Ainsworth was referring to which weighed a windrow-composting
plant to an open composting plant, they have different impacts
and they should be taxed differently to reflect the way that government
felt the Best Practical Environmental Options should be applied.
At the moment we have got a very unsophisticated approach to environmental
taxation. Even the recent Treasury document which was released
before Christmas was fine on rhetoric and words but there was
very little detail in there in terms of numbers and the technical
economic issues around the elasticity impacts of different types
of tax on different bases, so we have got a long way to go. We
would like to see that developed between government, our industry
and the NGOs on a triangular basis, on an open basis. We have
had 10 years of "rifle shot" policies zooming out from
the different arms and government of then people say, "Oh
yes, I did not realise that, I wish we had sat down and thought
about it before we did it."
229. You have referred to the changes in the
Landfill Tax Credit Scheme; how will that impact on things? Do
you have a project that will be affected by that in terms of data
capture?
(Mr Jones) Yes, we are rather different, I think,
from most of the other landfill companies.
Strategically we have committed around 50%,
about £36 million. It is a very long range, holistic framework
of issues, and £12 million of that has gone on data capture,
resource flow studies in different regions, for London and the
Isle of Wight, different industries.
230. Should this be your responsibility?
(Mr Jones) No.
231. We have heard from both sets of witnesses
about the lack of reliability of our statistics on waste, so who
should be doing this job?
(Mr Jones) We started the ball rolling about five
or six years ago with our Biffa book three in the series Great
Britain plc. It is clear that the Office of National Statistics
did not want it from our discussions with them. The Agency are
hot to trot for that sort of responsibility. I find it absolutely
staggering and in fact only yesterday I got an e-mail from the
DTLR task force team, having suggested that they would have an
interest in including waste as part of the e-government initiative.
85% of respondents out there think that the primary job of their
local government system is to collect their waste, it has got
the highest recall factor, and yet this electronic database is
not a part of e-government. It is absolutely incredible. This
e-mail in DTLR said, "Yes, we are stretched, we do not think
it is high enough up the priority list." There are other
issues there in terms of strategic programmes. We jointly funded
with DEFRA/DTI the Acorn Project, which is a pre-receptor system
(before ISO14001) for SMEs. These are the big strategic areas.
It was great while it lasted and we used that money to back the
strategic things we wanted government to do. The sad thing is
that there is no firm statement from the Treasury as to what they
are going to do but on current reading it looks as if all those
things are just going to go down the plug.
Chairman: Thank you very much indeed, gentlemen,
we must draw this session to an end now. There may be things we
want to follow up in writing because there are one or two questions
that we did not quite get round to. Thank you very much for a
very helpful session, we are very grateful.
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