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Session 2009 - 10
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Public Bill Committee Debates



The Committee consisted of the following Members:

Chairman: Mr. Eric Martlew
Ancram, Mr. Michael (Devizes) (Con)
Baldry, Tony (Banbury) (Con)
Banks, Gordon (Ochil and South Perthshire) (Lab)
Bottomley, Peter (Worthing, West) (Con)
Harris, Mr. Tom (Glasgow, South) (Lab)
Hughes, Simon (North Southwark and Bermondsey) (LD)
Joyce, Mr. Eric (Falkirk) (Lab)
Kemp, Mr. Fraser (Houghton and Washington, East) (Lab)
Kumar, Dr. Ashok (Middlesbrough, South and East Cleveland) (Lab)
McIntosh, Miss Anne (Vale of York) (Con)
Meacher, Mr. Michael (Oldham, West and Royton) (Lab)
Norris, Dan (Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs)
Ruane, Chris (Vale of Clwyd) (Lab)
Watkinson, Angela (Upminster) (Con)
Williams, Mr. Roger (Brecon and Radnorshire) (LD)
Wright, David (Telford) (Lab)
Joanna Dodd, Sarah Davies, Committee Clerks
† attended the Committee

Fourth Delegated Legislation Committee

Tuesday 1 December 2009

[Mr. Eric Martlew in the Chair]

Draft Environmental Permitting (England and Wales) (Amendment) (No. 2) Regulations 2009
10.30 am
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Norris): I beg to move,
That the Committee has considered the draft Environmental Permitting (England and Wales) (Amendment) (No. 2) Regulations 2009.
As always, Mr. Martlew, it is a pleasure to serve under your chairmanship.
Those carrying out waste recovery or disposal must have either an environmental permit or register an exemption and meet the rules laid down for the type of operation in regulations. The United Kingdom is one of the few member states to provide permitting exemptions as a lighter touch form of regulation. Over the years, exemptions have developed in a somewhat ad hoc manner, with previous attempts to tighten up the controls where problems have been identified leading to the development of some complex registration requirements for notifiable exemptions—with requirements not dissimilar to those for applying for a permit.
Experience has shown that many exempt waste operations pose a much higher risk than some permitted operations, such as commercial-scale composting and spreading waste on agricultural land, when the regulator—mainly, the Environment Agency—is neither able to carry out sufficient assessment of the proposals before operations start or recover its costs when applying greater monitoring and inspection based on the environmental risk posed and the level of compliance being achieved. That has led to calls on the Government for increased regulation of such types of waste operation.
Other exempt waste operations have been subject to abuse, with landscaping developments the size of small landfill sites operating under an exemption for the use of waste in construction with no limits on the quantities deposited. The House has heard the debate on the existing poor state of affairs in that respect, and the Government have rightly given a commitment to do something to prevent it.
As many right hon. and hon. Members will be aware, the environmental permitting regime came into force in 2008 and provides simpler and more streamlined permitting procedures and enforcement provisions, replacing the various previous controls on waste and the environmental regulation of other industrial processes. The permitting legislation did not look at the boundary between operations that required a permit and those that may benefit from an exemption. The exemptions review was carried out jointly by the Department for Environment, Food and Rural Affairs, the Welsh Assembly Government and the Environment Agency over more than three years, with significant dialogue with a wider range of businesses and others. It involved not one, but two public consultations. The review has led to the proposals before us today to change the boundary between operations that will need a permit and those that will be exempt. The boundary is now based on a more systematic assessment of the environmental risk posed by different waste operations and on other criteria, an approach that was widely supported by those responding to the consultation. The boundary is drawn up in terms of the nature of the operation and the waste types and maximum quantities of waste allowed, and the other requirements that must be met for it to be and remain exempt.
The Government established close and regular contact with the waste management sector and others during the development of the proposals for revised waste exemptions and we have maintained that contact. Operators will be able to register one or more exemptions in relation to as many sites as they operate at no cost, and will need to submit only a minimum of information. Higher-risk or larger-scale operations will be regulated through an environmental permit, which means that risks can be assessed before operations commence and organisations will be subject to greater monitoring and inspection based on environmental risk and operator compliance.
Eighty-eight per cent. of the existing 145,000 sites registered as exempt waste operations will remain exempt and will have to re-register every three years. Most of them currently have similar simple exemptions, but many others currently paying for and subject to a level of assessment under notifiable exemption will benefit straight away from the free simple exemption. The number of exempt sites will be added to by potentially thousands of additional sites for which no exemption is currently provided by law, but the agency has not required them to apply for a permit as they have low-risk positions.
Nine per cent. of current exempt sites will no longer need to register as they are not considered to be carrying out a waste recovery or disposal operation, and 3 per cent. of sites, which pose the highest risk and merit closer scrutiny will, in future, need a permit. Most are already subject to notifiable exemption controls and may be subject to relatively minor changes to the measures they have to take to mitigate any risk of harm or pollution. They will include larger metal recycling sites and much of land spreading.
Applying for a permit brings additional requirements, such as the need to provide evidence of planning permission before the Environment Agency can grant a permit. Operators will also need to ensure that the management of permitted waste operations is in the hands of someone who is technically competent. It is recognised that the requirements will lead to additional costs for some operators in some sectors. We have given a commitment in the Government response to the second exemptions review consultation to take measures to enable those affected by the move to permit in respect of planning and technical competence.
After consideration of all the responses, the Government concluded that the most effective and cost-efficient means to ensure that the waste framework directive’s requirements are implemented in a proportionate risk-based way is by increasing the provision of new and amended exemption for smaller, low-risk waste operations, while restricting or removing the extent of the exemptions for higher-risk operators. Removing exemptions altogether would be wrong and would undermine our important drive to encourage recovery and recycling to deliver the objectives of the waste strategy. It would have a financial impact on many smaller organisations across a variety of sectors that rely on them to store, dismantle or treat a wide range of recycled wastes. I commend the regulations to the Committee.
10.36 am
Miss Anne McIntosh (Vale of York) (Con): I welcome you to the chair, Mr. Martlew. It is a great pleasure to serve under your chairmanship. I thank the Minister for setting the scene.
I will start on a positive note. It is evident that in certain cases—particularly anaerobic digestion—the Minister and the Government listened to some of the responses, but in other cases the Minister did not. I intend to press him on two outstanding areas where he and his Department have failed to listen and I will ask for the regulations to be amended. I simply want to know why he is relying so much on the good will of the Committee and the industry in general that he has not published the implementing regulations that will apply at this stage.
Bearing in mind the two areas that I will turn to in a moment, I should like to know why the Government were not committed to an earlier review of the regulations. It is causing much concern that they are not seeking an earlier review—before 2013—of the regulations once they are adopted and implemented next year. If the Government would commit to an earlier review, with the possibility of amending the implementing regulations, and undertake today to hold full consultation on them, with the possibility of scrutiny by a similar Committee, it would allay many fears.
The Opposition are fully committed to a zero-waste strategy. We were committed as early as 2004, so we are delighted to see that the Government are adopting our policies, which were set out at that early stage. We want to recycle more. We want industry to invest in new technologies. We all want to reduce the amount of landfill—if for no other reason because we will all be clobbered by substantial fines wherever in the country we happen to live.
We recognise the value attached to metals, so we go further and invite the Government to consider recognising and pleading to the Commission the case that metals and waste from metals should be adopted as a secondary raw material. The implementing regulations would provide an ideal opportunity to revise the EU waste framework directive.
We want a level playing field and fair competition. The Minister said earlier that we are the only country to have regulations creating exemptions. The way the exemptions are applied is of concern to people with existing facilities. Will the Minister give an assurance that facilities currently enjoying planning permission will not lose their current arrangements in the review of the regulations? That is one of the major concerns.
The Minister will appreciate that businesses are struggling in the present economic climate and are obviously challenged by the level of detail in the regulations. Small businesses are not exempt and we believe that their future is deeply threatened by the content of the regulations.
The Government could have shown more positive leadership in dealing with our waste. They have failed to prepare sufficiently for the implementation of the landfill directive, which could cost £150 per tonne of recycled material.
I mentioned planning. In a written answer on 12 October 2009, the Under-Secretary of State for Communities and Local Government, the hon. Member for Dudley, North (Mr. Austin) wrote that 975 waste applications were decided on in the 12-month period to that date and only 893 were granted. We are told by industry that the Government would need to decide on and build a new waste facility every day for the foreseeable future to meet our current demand for landfill, yet under the new regulations, the metal recycling and composting industries are being actively discouraged.
Whereas many current exemptions are valid for life, all will now need to be re-registered every three years. DEFRA has dropped the mandatory charge of £50 to do so, but we believe that the regulatory burden is still high and that some businesses may be trapped and possibly invited to act in an illegal sense. We want to work with businesses. We invite the Government to do so and also to ensure that they invest in the right plants particularly, as I mentioned earlier, those that have the planning permissions and permits.
I turn to the explanatory memorandum and the regulatory impact assessment. The Minister said there were two consultations, but a close reading indicates that there were four. There was an informal consultation between March and June 2007, and a second three-month consultation between July and October 2008. Then there was a further consultation in February 2009 and there is to be a consultation on the Government guidance to accompany amendments made, published in October 2009.
I understand that the Minister and the Department have selected option 3 of the four options set out in the cost-benefit analysis of the regulatory impact assessment, but I have a query about the figures. The Government have indicated that under option 3 the total cost, which I believe is underestimated, is between £170 million and £216 million, and that the total benefit is deemed to be twice that. I challenge the Minister to explain how he arrived at those figures.
We are told that the changes are to amend and simplify the current system using risk-based methodology. It would help the Committee enormously if the Minister would set out that methodology. We are told that the system will create a single category of simple exemptions, remove notifiable exemptions completely and make more effective use of permits. We are told:
“Permits will continue to apply to higher risk operations where the costs and additional regulatory burdens are justified by the...benefits of reduced risks to the environment and human health.”
The Minister must make the case to show why the existing regulations are being revised as he proposes.
I shall pick up three areas: the use of waste in construction work, metal recycling and composting. The reasons given by those opposed to the revised thresholds are that they would reduce the use of recycled aggregate in construction projects and lead to an increase in those materials going to landfill. The correlation between that exemption and the link with the site management plan was called into question. The Government in their response said the evidence shows that
“construction and demolition waste can be subject to abuse and large deposits would benefit from a higher regulatory control.”
However, the Government
“acknowledges the concerns expressed in response to the consultation and does wish to encourage the ‘recovery’ of waste, including its use in construction.”
I ask the Minister to analyse whether that response is completely to the satisfaction of the industry.
Three areas are causing specific concern. The original paragraph 45 has been called into question by the metal recycling industry. In its draft response it argued vigorously that
“the existing system of exemptions in England and Wales has worked well”.
That means the existing paragraph 45, giving metal recycling exemption. In its formal response, the British Metals Recycling Association argued:
“The Paragraph 45 exemption provides many metal recyclers with a light regulatory touch that is proportionate to the types of materials they handle and the processes undertaken.”
The association believes:
“There has been insufficient evidence presented to the industry to suggest the existing exemption is subject to abuse or failing to provide adequate levels of environmental protection...The Review has failed to consider the low risks posed by our industry...Now is not the time to review the metals recycling exemption...The industry has been subject to a plethora of change in recent years and has responded to over 50 consultations in the last two years alone...The proposal for a new metal recycling exemption does not consider the true impacts it would have on the compliant operator”.
There are deep concerns about the planning aspects and what they might mean for existing facilities:
“These sites threaten the commercial viability of legitimate metal recyclers and frequently do not employ environmental controls of their operations.”
The association draws attention to the fact that:
“Infrequent/unlikely inspection of individual sites would make it too easy for sites ‘operating on the margins’...to be part of the regulated community.”
Perhaps the Minister could share his thoughts about such sites.
According to the BMRA, the industry
“strongly supports the proposal to introduce an enhanced public register of exempt business and believes this would help identify regulated and legitimate sites.”
All the industry’s arguments are well rehearsed. I commend them to the Minister and ask why he ignored them. Unless he has changed his mind, why does the Minister not accept the maintenance of the existing paragraph 45 exemption for metal recyclers? If the Minister is not prepared to accept that, we are minded to reject the regulations.
I turn to the thoughts expressed by the composting industry. Community composters processing food waste tend to specialise, and are often in an urban context, where gardens for home composting are in short supply. The industry provides great benefits in removing putrescible waste from areas of high population density, such as flats and high-rise estates, and the resulting compost is used in many ways to benefit the local community. The industry has benefits nationwide, and a number of projects have developed on the same model as the Rotters, who have set out a case study, although time prevents me from sharing it with the Committee.
The existence of community composters is, in their view, is financially fragile. However, they make a contribution: it is localised and provides a practical solution for food waste, which, as I understood from the Government and the Minister’s Department, is precisely where the challenges lie.
Although community composters feel they were consulted during the process of developing the current exemption, neither their formal response nor any subsequent dialogue with DEFRA or the Environment Agency has changed the original proposed limit on food waste, which remains at 10 tonnes. I invite the Minister, having consulted the industry, to acquiesce to its request that a 50 tonne limit be placed on food waste. That would not only be in the interests of the industry, but would go a substantial way to meet his Department’s targets.
Those are our main concerns, which—I repeat—should be widely familiar to the Minister and his Department. I would like him to set out his reasons for rejecting the arguments in favour of keeping paragraph 45 in its present form and his arguments for not acquiescing to the higher 50 tonne limit on food waste.
I have a number of questions for the Minister. Who will enforce the regulations? What will be the cost of enforcement? What extra funding will be allocated to those who are asked to implement the regulations? What are the comparative costs of implementing the revised regulations before us today and the existing regulations that have been in force for some time?
We understand that guidance on the new regulations has been issued to the industry, particularly regarding the application process for environmental permits. Will the Minister share with us what the responses were and how many in the industry, particularly from the metal recycling and the composting industries, were in favour of and agreeable to the consultation on the guidance?
Why were the implementing regulations that will give teeth to the statutory instrument not presented at the same time, so that we could view them together? What will the transitional arrangements be for businesses to comply with the new regulations? Does the Minister intend them come into force strictly in April next year? When can metal recycling site operators who are concerned that only permits will be granted expect reassurance that the relevant planning permissions in place will remain valid? They seek that reassurance today, and I hope that the Minister will oblige. What arrangements are there for flexibility in retrospective planning permission and for assisting metal recycling sites with that process?
As I said, if the Government are to meet their targets, we will need one new facility to be built each day. As I understand it, the Minister is now asking those who have existing facilities to reapply for planning permission. They will obviously be on the back foot. His answers in response to the questions on paragraph 45 relating to metal recycling and on the new 50 tonne limit on food waste will determine whether he enjoys our support for the regulations.
10.55 am
Simon Hughes (North Southwark and Bermondsey) (LD): May I first apologise to you, Mr. Martlew, to the Minister and to colleagues for being late? I was at an all-party spokesmanship event at Liverpool Street which finished at 10 am. I made it here as quickly as I could. I also apologise on behalf of my hon. Friend the Member for Brecon and Radnorshire, who is the expert on these matters; he cannot be with us, but he has briefed me. On the last occasion that these matters were debated, he spoke after the hon. Member for Vale of York and took a similar view. He retains that view. If my hon. Friend retains the view, having talked to all the people in the industry, I am certainly not going to change that position. I can therefore be brief.
The core proposition that I put to the Minister is that the result of the further consultation clearly has not satisfied people in an industry that has been significantly regulated in recent years. Nobody objects to there being proper rules for recycling, which has to be sufficiently regulated because of both European and domestic law. However, having picked up this issue only recently, I see that there have been almost annual changes to the regulations in recent years. That is increasingly difficult for many small businesses to have to contend with.
There are two fundamental reasons why the British Metals Recycling Association argues that, in spite of the widespread second consultation, the number and merit of the objections should persuade the Minister that today it would be wiser to withdraw the regulations and to try to get them right, rather than force them through the Committee today. Obviously I have no idea of the views of his Back-Bench colleagues, who are obviously free to vote against their Government, although that does not normally happen in Committee. If it happens, that is fine because the regulations can be defeated, but the more sensible way to proceed would be for the Minister to withdraw the regulations and then to embark on further consultation.
I will not repeat the detailed points from the BMRA described by the hon. Lady. Its substantive points are that when similar regulations to these were looked at north of the border—the regulations before us apply only to England and Wales—the Scottish Government decided that one part of the regulations, the certificate of technical competence, was “unnecessary gold plating” and so would not implement it. The association is strongly of the view that if we are meant to be in a political culture where regulation happens only when it is necessary and where the Government seek to minimise regulation, not maximise it, the principles of good regulation are being offended by the regulations before us, because they are neither proportionate nor targeted.
I endorse and support the point the hon. Lady made about the paragraph 45 exemption. Many firms in the industry are small and engage in low-risk activities. I am told that the industry is already subject to 15 different regulatory regimes. I am clear that there have been changes to the regime in each of the past two years and, I assume, in the years before that. I know that approximately 1,000 businesses will be affected, and it could well be more than that. The Government are trying to encourage everybody to recycle, but the industry argues that this would be a significant disincentive to recycling for the small-scale operator. It also says that the proposed exemption compliance regime and inspection rate of 2 per cent. is unacceptably low.
The industry is not being difficult. The Minister has had talks with its representatives and they have accepted some of the Government’s propositions, such as the proposal to introduce an enhanced public register of exempt business. It is good for the consumer to know which is a valid good business but does not have to comply and is therefore exempted. It is important that that public information will be available, so that people can identify regulated and unregulated sites, know which are legitimate practitioners and which are not, and therefore know how local enforcement officials can deal with those who breach the law.
On the composting regulations, I and some other members of the Committee represent inner-urban communities. Local community food composting environmental schemes frequently take place and are increasingly popular in such areas. Such schemes may derive from a link with local allotments, or they may deal with food waste collected from shops at the end of the day. More and more people in urban Britain are trying to ensure that they use waste effectively. I understand that the consultation did not change the Department’s view that the limit should be ten tonnes. That will catch lots of small activities. The Community Composting Network, which is based in Sheffield and reflects the views of organisations in the east end of London and other parts of urban Britain, has written to all members of the Committee arguing that there should be a significant increase in the compliance threshold—a 50-tonne limit, which is five times what is currently proposed.
I have two further points. First, the food waste composting industry is already heavily regulated by animal by-products regulations, so there is no immediate need for further changes as proposed in the regulations. Moreover, the Minister has not cited a significant example of bad practice to make the case for the urgent change for which he is arguing. It is not just Rotters in Liverpool—another good and well respected organisation in that city—that has written to us, but others as well. All such organisations have been commended under objective environmental assessments by organisations looking at good practice, and they are winners of ethical awards and so on. There therefore appears to be very good objective assessment as to the good quality and standard of what is being done.
In certain cases, therefore, one would not be allowed to get the exemption under the standard rules; one would have to apply for a bespoke environmental permit, which is the most expensive one, with an application costing £2,570 and an annual subsistence charge of £1,660. Baseline and quarterly bioaerosol sampling would be required at a further cost of £1,500 to £3,000 per sampling, The average cost is estimated to be between £7,500 and £15,000 in the first year. Whatever the specifics, those are big bills for small community organisations that are well regarded, do not appear to have offended, are not causing public concern and appear to be unnecessary targets.
I hope that the Minister understands that it is consistent with general Government policy, which is going in the right direction, to have less regulation, to encourage recycling and local community composting activity, and not to penalise small businesses unnecessarily. The correct direction is to regulate less, not more, so the wise thing would be to withdraw the regulations. I am happy, on behalf of my hon. Friends, to have further discussions with the Minister and those representing the Conservative party and others to try to reach an agreement. I hope that that is possible. There is still time to do that before a general election, which must happen in the spring, so I hope the Minister does not feel that he has no option other than to force the regulations through today. I ask him to use his personal ministerial discretion to be brave, to do the right thing and to ask for the regulations to be withdrawn.
11.5 am
Peter Bottomley (Worthing, West) (Con): I will not add or subtract from what my hon. Friend the Member for Vale of York said, and I will follow her in whatever decision she makes on voting.
The general approach of the regulations seems to be right. One can easily provide some entertainment by wondering how one can collect five tonnes of lion faeces but up to 100 tonnes of deer, sheep and rabbit faeces. I am surprised that the limit for lock gates is the same as for that last group. Leaving that aside, the assessments of the three approaches seem to be clear. I congratulate the authors on the way they were written, because it is rare to be able to understand what is put in front of us.
11.7 am
 
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