Examination of Witnesses (Questions 60-79)
JOHN HEALEY
MP, MR GRAHAM
DUNCAN, JOAN
RUDDOCK MP AND
MR DANIEL
INSTONE
17 DECEMBER 2007
Q60 Dr Pugh: The modelling of the
Continental experience does not tell you that after a period of
time most people migrate into the virtuous recycling side of things
and do not simply throw things into the waste stream willy-nilly.
I assume that that affects the numbers.
Joan Ruddock: Increasingly. There
would be no point in having these schemes if we did not bring
more and more people into the virtuous recycling place from being
poor recyclers. That is obvious.
Q61 Dr Pugh: If that happens, on
your calculation—we know what landfill levy is, that is
fairly predictable; presumably income from penalties goes down
and presumably collection costs remain fairly constant—you
must have a shrewd idea at which point, if any, it becomes self-sustaining
and is not a loss-leader, as it were.
Joan Ruddock: Pilots may give
us some indication, because, whereas we may learn enough to make
an early decision about whether to roll out pilots, we could of
course, in running them for the whole of the three years that
we have the fund available, be able to see just how the graph
is moving and that will enable us to make projections. If we knew
every answer to the questions that you are posing, then there
would be no point in doing the pilots in the first place. The
whole point about these pilots is to be able to understand behaviour
change, how rapidly it occurs, what are the implications for that,
what are the savings for the local authorities. That is what we
will find in the pilots. Nobody is forcing local authorities to
undertake pilots; they have to come forward as volunteers. Frankly,
if we learn from these pilots that they are not enabling us to
move forward in a different way from the progress that is being
made through all the other mechanisms that are in place then we
could make a decision not to go further.
Q62 Dr Pugh: Does the Continental
experience, which you have studied and which you are using as
evidence quite a lot during this session, tell you that once the
schemes kick in the incentives or the rewards tend to decline
and can decline without costing the authority prohibitively?
Joan Ruddock: I would assume so.
I am going to ask Daniel if he feels he wants to contribute anything.
Mr Instone: We have looked very
hard at the experience overseas, as I think the Committee knows
and it is important to note that we get several different effects
from the schemes that have been introduced as far as we can tell.
One is that you get improved levels of not only recycling but
also waste prevention: you get lower levels of waste than otherwise
would be the case—that appears to be the case—so you
have those double benefits on the plus side. But you also have
savings to local authorities particularly, because they have less
waste they have to deal with. You can get some quite significant
savings and environmental benefits which will of course help us
to our landfill diversion targets. That is over and above. That
can be done from a variety of different kinds of schemes. We have
a lot of experience of different schemes, as I think we have demonstrated
in the earlier evidence we have provided, but they all tend to
have those combined benefits.
Joan Ruddock: Dr Pugh, when you
were speaking earlier I think you were suggesting that the costs
of collection and disposal were somehow dependent upon these schemes,
whereas of course they are funded through the CSR settlements.
Q63 Dr Pugh: I am thinking of the
overall cost profile of it and how it affects the local authorities
and their willingness to do it. On the key point of your open-mindedness
and so on, your preparedness to see what will happen and not to
prescribe too much: why under those circumstances are you going
to offer to cap rewards and incentives?
Joan Ruddock: It is there as a
possible instrument to be used in the future. I honestly do not
think that any of us believe that local authorities are going
to come forward with foolish proposals but we felt we should put
it there just in case there was such a need and perhaps, also,
to give confidence—because there has been a lot of discussion
about these schemes, some of it hostile.
John Healey: And misleading.
Joan Ruddock: Extremely misleading.
I think it gives confidence that this is something that is not
going to be a "stealth tax".
Q64 Dr Pugh: You do not think it
is necessary but as a reserve power.
Joan Ruddock: It is a reserve
power.
Q65 Mr Betts: Coming back to this
European model you have talked about, is it not the truth that
most European countries which have a waste charging policy, charge
for the totality of their waste, rather than having schemes which
charge at the margin or give rewards at the margin, which is what
our pilots will be looking at?
Joan Ruddock: No, as I understand
it the schemes that have been studied are specific in the sense
of schemes that—
Q66 Mr Betts: Which country would
be most similar to the sorts of arrangements we are talking about?
Joan Ruddock: The examples I have
been given—and again I will get officials to check that
detail in a moment—are people from Sweden and people from
Italy.
John Healey: The point about the
Continental experience is that it gives us the confidence to believe
that some form of incentive scheme can have an impact on recycling
rates, can have an impact on the waste disposal costs and rates
for local authorities. The point is that our circumstances in
Britain are different from those in every other country and we
have to design a scheme or the principles of schemes which we
think are appropriate to Britain. Defra are leading on that work
now.
Q67 Mr Betts: It might be helpful
to have a note about those two countries, Italy and Sweden, if
they are your best models.
Mr Instone: They are not the only
models. I think it is important to note, as we have said before,
that the UK is the only country out of the EU 15 which prohibits
local authorities from charging. It is also the case that, although
schemes vary quite a lot in different countries and, indeed, in
different parts of our European countries, we are very unusual
in the UK in not having these kinds of schemes anywhere at all.
The examples go quite wide.
Joan Ruddock: If they have a flat
rate charge, as you implied in your first question, they also
have a small variable charge and that is where they see incentives
working.
Q68 Mr Betts: It might be helpful
just to have the example of those.
Joan Ruddock: Yes, we will get
the examples.
Q69 Mr Betts: When we did the inquiry,
the ministers were quite clear that it is something that might
appear in the same levy with the council tax but it was going
to be separate from the council tax completely. It was going to
be another specific and distinct charge. It seems now that that
has changed and the Government are saying that local authorities
will be free to incorporate any reward or incentive scheme into
the council tax. Would you explain why there has been that change?
John Healey: Because it was a
point that was put to us by a number of local authorities and
others during the consultation—it stemmed from many of the
concerns that you raised, Mr Betts, a little earlier with us—which
was: Why set up a separate parallel scheme with all the administrative
overheads when the local authority has arrangements for billing
council tax? We are putting in the Climate Change Bill the provision
for those authorities which pilot these schemes to be able to
integrate any rebates and charges with their council tax and to
include them in the billing of council tax. Broadly, that has
been a welcome move and it seems to be a sensible response to
the views you have put to us.
Q70 Mr Betts: If we are looking at
something which relates people's activities to rewards or penalties,
then presumably we would be looking to have council tax varying
on at least a monthly basis, would we? We are not going to wait
until the end of the year to incorporate any penalties or rewards
into next year's council tax, are we?
John Healey: As Joan Ruddock has
already indicated to Dr Pugh: in order for this to be an incentive,
there has to be a responsiveness—whether that is on the
rebate side or on the charging side—to the behaviour and
the level of recycling or the waste that households produce. Clearly,
it is going to be an area where we will want to see how the pilots
run; it will be an area in which those proposing to run pilots
will make proposals for themselves; and I think it will be quite
a useful part of the lessons that we can learn from the pilots.
Q71 Mr Betts: It might be an authority
could come forward with a proposal which simply added an amount
to the council tax bill for the costs of waste collection and
then built in rewards for those people who produce less waste
and recycle more. That would be the sort of scheme you might find
would do better.
Joan Ruddock: It is possible that
you could put a sum which is not specific to the costs. It is
not as though you would say this is a rebate that you all get
but then those people who did not meet the average recycling rate,
or however you deemed the recycling rate, would have to pay an
additional supplementary charge on their council tax. There is
quite a variety of ways in which you could do this and enter it
on to your council tax bill.
John Healey: There are two important
principles on which it is important for the Committee to be clear.
The principle of revenue neutrality means that the overall burden
of tax and charging for residents in an area would not change.
Secondly, any revenue that is raised through any form of relative
charge in any charge and rebate scheme—if that is what is
proposed in these pilots—will be fully paid back to residents
through rebates. In other words, the local authority will not
be able to hold on to any element of what may have been raised
through an incentive scheme in order to cover its administrative
costs.
Q72 Mr Betts: It will be an interesting
question about whether the local authority gets capped on the
amount before they pay the rewards back or the amount they set
in the first place.
John Healey: It is something perhaps
to look at very closely in the pilot.
Q73 Mr Betts: There is one very serious
point that we did look at. Given that you have quoted the inquiry
back to us as to why you would be more flexible and willing to
look at different arrangements, there is the whole issue of people
on council tax benefit and how you incentivise a scheme for them
when they will get no reward potentially, or do you even give
a reward to people who are paying no council tax?
Joan Ruddock: This is one of the
things that we will have to work out through the pilots. We specifically
have said that in terms of pilots we need to look at people who
would have less scope than others for reducing the amount of residual
waste. Because people are on benefit, it does not necessarily
mean they are in that category. In fact, they may buy less and
they may therefore produce less residual waste. People who are
on benefits would not be a category because they could not participate
in the scheme. They could clearly participate as well as others.
It will be a matter for the design of the scheme as to whether
those people could benefit from an incentive or not.
Q74 Mr Betts: I can probably put
the question a bit more strongly then. Presumably the Government
would not want to see a scheme where people, because of their
low incomes, could not participate and benefit?
Joan Ruddock: Quite. We specifically
have said that it is about people who might have difficulties
in reducing their rate and participating in the scheme, not low
income people per se for example, as a group, for the reasons
I have just outlined. We are not saying it is vulnerable people
in a general way which means generally thought to be on a low
income but people who would have recognised difficulties in making
a contribution towards greater recycling. That could be people
with disabilities, for example. The schemes that come forward
will have to have taken that into account and will be judged accordingly.
John Healey: Could I make an observation
about terminology because both Dr Pugh and Mr Betts have referred
to penalties. There is clearly scope for proposals in the pilots
to have a scheme, revenue neutral overall, that incorporates both
charges and rebates. It is perhaps clearer if we use the term
"penalties" for those situations where those charges
are not paid when they are due, rather than use the term "penalties"
for what may be a charging element for some households that do
not meet recycling targets or do not reduce their rubbish as part
of any scheme.
Q75 Mr Olner: In your comparison
with continental countries, they have the same difficulties that
we have, where we have a conflict between the collection authority
and the disposal authority. Sometimes they do not ride easily
very well together. I just wondered whether you had given that
any thought because the disposal authority will pay the landfill
tax. How does that get fed back to the collection authority to
distribute between its taxpayers?
Joan Ruddock: I think I might
need some advice on that.
Mr Instone: I think this comes
back to the question we were talking about before on joint working.
The idea of having a scheme of the kind we have been talking about
is that the people at the front line would be the collection authorities
where this is two-tier working. We obviously assume that the collection
authorities would work very closely with the disposal authorities
if they were separate, and of course they would not be separate
with unitary authorities, to produce a scheme which stacked up
in terms of the implications for disposal. They have a joint interest
clearly in ensuring that the waste is reduced because that saves
them money as well as having the environmental benefits, and also
as much waste as possible is diverted from landfill. We were saying
earlier about the increasing importance we attach to joint working.
In working out these kinds of schemes, including at the pilot
stage, that is one of the issues we want to take very carefully
into account.
Q76 Mr Olner: One of the difficulties
is that the district authority who is the waste collection authority
is the authority that really deals with the recycling end of it.
I probably recycle better in Westminster than I do in Nuneaton
because Westminster has mixed recycling collection and I put virtually
everything in the recycling bin; whereas my own collection in
Nuneaton has to be separate. I wonder whether you are going to
look at like for like on the opportunities for recycling.
Joan Ruddock: I think we need
to take account of all of these issues when we are looking to
the pilots. You have made a very telling point and we should take
that into account when we see what kind of pilots come forward
and whether there is an example that we should definitely work
on that will give us this split interest, to see how well we can
make the pilot work in such a circumstance.
Q77 Mr Olner: Coming back to what
Mr Betts was saying about the charges, what is going to be the
tolerance between a heavy bin that is going to the landfill site,
that has had recyclable material put in it because the resident
has not bothered to separate it or recycle it? What sort of tolerance
is there between a good bin and a bad bin?
Joan Ruddock: I am sorry to keep
coming back. I sound as if I am constantly repeating myself. All
of these things are what we are going to see in the pilots. What
is good practice? How do you make judgments? How do you measure?
There are so many different schemes that already operate. As you
suggest, co-mingling in sacks, sack schemes, bin schemes, bigger
bins, weighed bins, bigger bins versus small bins. These will
be the things that are actually in the pilots, where we will be
able to see just how easy or difficult it is for an authority
to make a judgment as to whether a particular bin has met the
norm within their scheme and therefore has met the recycling rate
that they require, or whether it is failing to meet that recycling
rate.
Q78 Mr Olner: Could you perhaps confirm
for the record that some very bad individual householders who
do not believe in recycling will pay more to have their refuse
collected?
Joan Ruddock: That certainly is
the point of an incentive scheme. Either in a reward scheme you
could reward only those who do well by whatever your well criterion
is in that authority, so you could simply have a reward scheme
that rewarded those who did well and you could set the bar wherever
made sense. That is again the point of piloting. Alternatively,
you can have a scheme which has both rewards and charges in it.
In those cases, clearly you would set a level at which people
would do what is regarded as the norm for recycling. Those who
did very well could get rewards and those who failed to meet whatever
was deemed to be the norm would then be people who had an additional
charge made on them or a specific charge made on them because
of their failures to recycle.
Q79 Mr Olner: Anybody who pays any
more money at the end of the day will be seeing that as an extra
tax.
Joan Ruddock: We do not see that
they will see that as an extra tax because everybody has the opportunity
not to pay that charge. It will be very clear to them what they
have to do and if they fail to do it then they will be charged.
They will not be taxed. There will be no taxation system for the
whole community. There will simply be a charge on those who have
failed to meet whatever is the normal standard for that community
in terms of recycling. It is clearly not a tax; it is a charge,
if they are operating that type of scheme.
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