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


Examination of Witnesses (Questions 360-379)

WEDNESDAY 2 APRIL 2003

RT HON MICHAEL MEACHER MP AND MS SUE ELLIS

David Taylor

  360. You seemed to say, earlier on, that the three key elements were targets, resources and markets, and then you went on to talk about resources, then you went on to talk approvingly of PFI schemes being at the present level of £220 million, going up to about £350 million. Earlier evidence that we have had from local authorities suggests that they do not necessarily see that in the same positive light, because PFI schemes do not allow them perhaps the level of detailed control, in terms of setting priorities, and the PFI companies themselves are likely to pursue, what shall we say, profitable activities at the expense of political priorities. Do you recognise that as a problem?
  (Mr Meacher) I do recognise the general problems over PFI, this is a very, very sensitive issue, which goes far wider than what we are talking about today. But a PFI system is a long-term, fixed-price contract, agreed by a private contractor, in order to deliver standards specified by the local authority, and it is for the local authority to determine those standards that they believe are necessary. I think, without being overprescriptive, they should certainly be very clear and detailed and thorough, and it is their responsibility for that to happen.

  361. I am sorry to interrupt you. If during the contract period there are changes in available methods, material mix, and so on, does not the local authority find itself backed over a barrel into trying to change to reflect the circumstances six or ten years into the contract?
  (Mr Meacher) I understand that is a possibility, but, again, if they were well advised, certainly they would have clauses in the contract which would allow them, where there is a change in technology, much improved equipment or plant becomes available, that there should be a renegotiation of those parts of the contract. I agree, that may not happen, and these problems can occur, particularly if one has a 25-year period of life for a PFI, as opposed to, say, 15 years. They are also very large block contracts, up to £25 million, so, of course, it does mean that you have a relatively small number of large contracts, rather than being spread evenly across the country. But I do recognise those problems. They are designed to produce greater efficiency in the delivery of agreed standards and objectives, but they do need very, very careful writing and very thorough examination; we are trying to provide guidelines to avoid some of the kinds of problems that you have mentioned.

  David Taylor: And PFI companies salivate when that word "renegotiate" pops its head round the door, do they not? Sorry about that.

Mr Drew

  362. To move on to the issue of incineration, which probably will not surprise you, having talked about this locally, in Stroud, we went to Denmark, and obviously Denmark is the height of incineration, in terms of their strategy, now they are adamant that incineration has never crowded out recycling, reuse, and so on. But there is a notion, and this has been put to us on more than one occasion, that if we do not get waste reduction locked into place soon enough the only option you end up with is incineration, and certainly there are players out there, you are aware, Michael, basically who want us to fall on our face, because they will come in with the instant solution, notwithstanding all the planning problems of getting incinerators put in place. But that is an inherent risk, is it not, that is why, if we do not get reduction in place sooner rather than later, we do narrow our options; would you share that worry?
  (Mr Meacher) Certainly, I am extremely keen that we should put in place effective mechanisms that do reduce the creation of waste. If we are really going to deal with this, the current rate of growth of waste arisings is about 3, 4% a year, which is faster than economic growth, in the recent year or two almost twice the rate, and that is very serious, very serious indeed. If really we are going to achieve control of this problem we need to decouple economic growth from waste arisings, so that in a year in which you get 2 or 3% growth you get, say, -1% waste arisings, compared with the previous year. Now we are an awfully long way away from that, but that is, I would say, a milestone before really we begin to get control of this problem. So I do not take the view that, well, reduction would be very desirable and if we do not get it we are going to have a lot of incineration, I am determined that we do get reduction, and if need be begin to think about more mechanisms to ensure that that happens. One way of doing that, of course, is through the landfill tax escalator, which the Chancellor said will be, it is an extra £3 in 2005/06 and at least £3 per year up to £35, and, as I say, we are trying physically to reduce the amount going to landfill. The Budget 2000, the Chancellor said that the Government is considering an economic instrument in respect of incineration. We are determined to ensure that incineration pays the environmental and social costs and that those should be internalised. Also, of course, we want to minimise waste, as I have said, and move waste up the waste hierarchy, and incineration does not do that. Certainly, we want to avoid incineration becoming the next-cheapest option after landfill. So we are very conscious of the problem. In addition, I did publish guidelines, in September 2000, which said that approval would be given only for incineration which did not crowd out recycling or pre-empt future possibilities of recycling, so that one does not build a large incinerator which is going to gather waste from a large area around, in defiance of the proximity principle. So I am not saying there will not be any increase in incineration. As you rightly say, Denmark, which is often considered much greener than us, has a far higher level of incineration than we have, but that certainly is something that I believe is not necessary, not desirable, and probably will not happen. My last point is that, in addition, of course, to mass-burn incineration, there are the new technologies coming in, gasification, pyrolysis, anaerobic digestion, which I think are quite promising, quite different, it is sort of cooking it in the absence of oxygen, as I understand.

  363. Could I pick up just the one point, because, obviously, what we did learn by going to Denmark was that they refer to carrot and whip, which I think we call carrot and stick, and they were very clear that there must be not just a landfill tax but, at a lower level, an incineration tax, so they have used economic instruments to help move up the waste hierarchy. And I am interested; we cannot keep having this debate on economic instruments, either we are going to introduce an incineration charge of some description or we are not, because people are making their plans at this moment and they want some clarification?
  (Mr Meacher) I agree, and that is why the Government has commissioned a report on the environmental and health costs of all forms of waste management and disposal; that is in place now, it will produce a report, and in the light of that we will make a decision on whether or not to proceed, as the Chancellor hinted last year.

Mr Wiggin

  364. The Minister touched on the waste hierarchy in his opening comments. There are concerns from people like the Renew Trust that the current focus on recycling means that reusing gets pushed to one side; what is your view on that?
  (Mr Meacher) It is certainly not intended to be, and if a product can be reused, in my view, that is better than recycling, which is a more involved and expensive process. The number of times though that a product actually can be reused and, as it were, renewed, used again as new, must be relatively small; but certainly there is no intention to squeeze out renew at all. Recycling is not the holy grail, it is part of the way of handling products that cannot be reused or recovered.

  365. The holy grail really is the whole sort of pyramid of the hierarchy; so why did you miss the chance to include that in the Waste and Emissions Trading Standards Bill, why could you not have enshrined it in legislation?
  (Mr Meacher) Why did I not enshrine what, in that Bill?

  366. The hierarchy, and actually start to give it a bit of legislative power?
  (Mr Meacher) Because the purpose of the Waste and Emissions Trading Bill is to secure a limitation on the amount of municipal biodegradable waste going to landfill, that is its purpose; it is not about establishing the waste hierarchy, that was already set out very clearly in the Government's Waste Strategy in 2000. This was a particular part of that general landscape, and we need legislative cover, a legislative base, in order to do this, in order to say that "You sent 100 tonnes to your landfill last year; next year it's going to be only 95, and the year after that 90." So it is specifically for that purpose. It is not designed to go over the entire range of the Waste Strategy, because we think that is already understood, clearly publicised, and other mechanisms, which do have legislative cover, are already in place; this was just a gap which was being filled.

Mr Lepper

  367. Michael, one of the things that we found out on our visit to Denmark, to which David Drew has already referred, was the difference in the Danish system in the way they deal with packaging recycling targets. In this country, as I understand it, everything is weight-based, and the Danes, I think, take a different view, they look at the environmental impact of different forms of packaging. Now Waste Watch, when they gave evidence to us, said they felt that one of the results of our approach to packaging recycling targets was that it had led to an increase in plastic packaging, coupled with an unwillingness on the part of local authorities to recycle plastic packaging. Now have the Danes got it right; should we be looking at what they are doing?
  (Mr Meacher) Certainly we should be looking at what the Danes are doing, because I have always regarded Denmark as a country well worth looking at; they are not always right, as I say, things go wrong in waste management, even in Denmark, but of course we should look at it. Clearly, there is a lot of dissatisfaction about packaging in this country, I get more letters, no doubt from some of your constituents, which you send on to me, saying how the Government is doing nothing about packaging and it is all increasing. I suspect what triggers that is what happens in the supermarkets and at supermarket checkouts, when you have already got a product which is double-wrapped and then they give you a plastic bag, and sometimes a plastic bag to go into another plastic bag, and people think that it is far too much. I do say that people ought to refuse it, which I do, when I go through the check-out. But what they do not understand, and what I try to convey in the replies is that the recycling of packaging waste is already on a substantial scale. We had a 50% target last year; for reasons to do with one of the compliance regimes, we just failed that and we achieved 48. But within the period 2006-08 we shall be agreeing, in Brussels, for an increase in those targets up to 60-65%, so within a period of three, four years, we shall be required to reprocess, recycle, two-thirds of all packaging; now I think this is not widely understood. What has happened in this country is that the measures already in place have led to repackaging, because what happens is, if you get a large package, a large plastic or cardboard package, people consume most of it, but a significant amount is left in the package, and often it is thrown away, it is wasted. So the idea is—and there may be a little commercial purpose in this as well, of course—to package it more closely to what is likely to be consumed, so that there is no waste of the contents, which is a good thing. So the bottles and the cardboard packages, and sometimes the plastic wrappings, are often smaller, the thickness of the bottles is often thinner. Now I have been taking a great interest in having "return and deposit" schemes reintroduced into this country, and one of the problems I have encountered is, "Ah, well, your policies have reduced the size of the bottles," or the thickness of the bottles. Now if you have "return and deposit" systems they will have to be cleaned out, scrubbed out with caustic soda, and the thickness of the glass is not sufficient to withstand this; so you have got a problem that it is contrary to your existing policy. So these are the sorts of problems that arise. I have said to the Advisory Committee on Packaging, whom I am meeting very shortly, that I am dissatisfied with the amount of packaging waste. It is done, as you say, on a tonnage basis, they do have to pay for that, if it is reprocessed they have to pay for the reprocessing of it, and the greater the weight, the more the tonnage, the more they have to pay; so they have got an incentive to reduce, and, to some extent, I think, they have, but it has not satisfied the public and it does not satisfy me.

  368. But you talk still in terms of overall tonnage. Should we be looking at the environmental impact of different kinds of packaging; that was the basis of my earlier question?
  (Mr Meacher) Right; you mean, a shift to plastics. That is, I agree, a real problem, because plastic, of course, is the most difficult substance to recycle, because it is quite bulky and it is not easily squashed, so it takes up a lot of space, and the recycling rate is 12, 15%, something of that order, and certainly we need to increase that sharply. What I did not say is that not only are the overall packaging targets being increased quite sharply, from 50 to around 65%, in the next few years, but there are material-specific recycling targets, which for paper and glass are very high, and are going to be even higher, but for plastics, for the first time, it is going to require a significant increase in plastics recycling. And that will be a requirement on companies who use plastic, and indeed they may have to come into the household waste stream in order to recover, to retrieve, the plastic, in order to meet their recycling targets. So I think we are beginning to deal with this, but, I agree, not sufficiently to satisfy the general public.

Mr Jack

  369. One thing that bothers me slightly in all of this is that the people, certainly at the domestic level, it is all of us, who are producing waste, all of these targets are sort of really irrelevant, in the sense that there is no bill attached in the United Kingdom to producing any waste. There is lots of good and worthy effort, and people are terribly enthusiastic about sorting things out and doing their bit, but you made the point that you would like to see better strategies for waste minimisation, and it strikes me that people do respond to economic signals quite well, that they adjust their lifestyle. Why have you shied away from this route?
  (Mr Meacher) We have not shied away. It is one of the recommendations of the Strategy Unit report, which did recommend that there should be pilots for local authorities who wanted to introduce what is sometimes called "variable charging". It is not the case, of course, that there is no tax on people with regard to dealing with the waste that they create, there is, it is part of the council tax; the problem is that very, very few people realise that, and, of course, it is flat rate. If you live in the same local authority and you produce very little waste, you make no gain, compared with another family, next door, who create an awful lot of waste. And there is, of course, an argument for creating an economic signal, and I do understand the logic of that suggestion, but it is part of the Strategy Unit report, and I am afraid you are going to have to wait a little while longer to see our response.

  370. So you are keeping this air of mystery. Let me tempt you just a little bit down this street. In preparing for your response, actually have you done any economic modelling to work out the possible effects of some different charging mechanisms, and, if so, which mechanisms have you evaluated?
  (Mr Meacher) It is a very good try. We have not, but the Strategy Unit team did look at action on this in other countries, and I think there were 17 countries, if I remember, who do this at the present time, and, of course, they looked at what those mechanisms were and how successful they were thought to be. There is no question that it can be done, there is no question about that.

  371. Did any of the results which the Strategy Unit did put into the public domain impress you?
  (Mr Meacher) We have taken firm note of them.

  372. You have taken firm note of them; well, let me come back and ask the question again. Is Defra doing any independent work to evaluate these different charging mechanisms?
  (Mr Meacher) No.

  373. So you are doing it yourself?
  (Mr Meacher) No. We have the report, there have been discussions on this and other outstanding items; the Government now has an agreed position and that will be published very shortly.

Mr Mitchell

  374. Your answer to my somewhat jaundiced question initially was that we fix more targets, and there is now a prime ministerial strategy. It is not jaundiced to say that this Government has got targets running out of its ears, it would be nice to fix a target for no more targets; on everything there is a prime ministerial strategy, we have got one even on fishing now. Surely this is not enough; let us talk just a bit more about targets, because, "Waste not, want not" suggests more targets for local authorities. There is a waste minimisation, or recycling, target, a higher national recycling target of 45%, I think you said 25%, they want 45% by 2015. Do you think statutory waste targets, this is not just airy-fairy targets, statutory targets, would be effective for local authorities?
  (Mr Meacher) I do think that, and that is exactly what we have set. The targets are not aspirational, they are statutory performance standards, which under the BVPI (Best Value Performance Indicator) system local authorities are required to adhere to; so they are statutory targets. Now you say "You've got targets galore," I am not going to comment about the wide range of them, but I do know that in waste management it is absolutely essential that there are targets to guide resources and effort in local authorities. We started off in 1997 where there were a handful of local authorities whose recycling rate was 1%. Let me put up my hand and say I think Oldham was 3 or 4%, it is very low; there are other local authorities who are at 25, 30%, possibly somewhere even above that. So there is a huge range. Now how do you drag up, apart from this block of, say, I do not know, 15% who really have done extremely well, the remaining 85%, the second half of that in particular, who have really never given any particular attention to this at all. I think the only way to do it is to set a target and a timescale and expect them, and intend them, to meet it; that is what we have done. I do not regard this as targets coming out of our ears, I regard this as the minimum statutory pressure necessary to get a change on the ground.

  375. Statutory pressures, but will they face penalties or fines if they do not achieve the targets?
  (Mr Meacher) That is a very good question.

  376. Unlike the other three?
  (Mr Meacher) I will give it a good answer, like the other three. What I am proposing is, first of all, to identify those who are failing. I wrote to 142 local authorities last August, saying "The latest evidence we have from you, in your annual returns to this Department on recycling, does not suggest that you are in line to meet your targets in 2003-04 this is the information we have, if it is incorrect please tell us, and obviously we will take note of that and revise our opinion." As a result of that, we have excluded 20 or 30 from the danger list, if you like. I have now written to the remainder, 100 plus, saying that "In the light of the information you have given, I am still not satisfied; and have you drawn up a plan to bring you back on track, do you need assistance from either the private sector or from WRAP, or from possibly local authorities around you who have a better performance? We are expecting you to do this. I would like to have your response within a short time;" date given. That is the point we have reached. I will follow that up in the light of what was said, by demanding that. I do have an action plan which indicates how they are going to get back on track. In the last analysis, if all else fails, we can remove, of course, although I do not want to do this, the waste management function from a local authority and give it to someone else, whether that is a private company or a consortium of local authorities who could do the job better. But, of course, the local authority will still pay whatever it costs, so it is not as though this is an unwelcome function which conveniently can be removed from them, they have a responsibility and I am determined that they meet it. And the key point is, I repeat again, and many other Members have said it today, that there has to be pressure put on local authorities to get them to reduce the amount of waste that is being created. In parts of my own constituency, I have seen completely unacceptable levels of waste creation, which not only are littering the landscape but which, in nearly all cases, will end up in landfill, and that is not acceptable.

  377. Do those penalties include fines, financial ones?
  (Mr Meacher) They could do.

  378. You will not say definitely?
  (Mr Meacher) I am not proposing that, because, of course, the local authority will then turn round and say "By fining us, you've made it more difficult for us to achieve our objective," and there is some force in that argument, so it is not the best way to proceed.

  379. Also, of course, they might turn round and say "Why should we be fined for failing to achieve your targets, when national recycling targets have not been achieved either?"?
  (Mr Meacher) I am not quite sure what you mean by that. The national recycling target for this current financial year, which has just started, is, nationally, across the country, 17%, but, of course, those who started very low cannot be expected to get 17; they have got to do a little better.


 
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