TUESDAY 28 NOVEMBER 2000

MR STEPHEN TIMMS, MP, MR JON ANDERSON, MS PATRICIA HEWITT, MP, AND DR ALISTAIR KEDDIE

  1020. Because the DTI write that you favour a "voluntary approach" to producer responsibility. Can you tell the Committee what evidence you have to prove that this can be effective in anything other than a few specific markets? What discussions are the DTI currently involved in to develop further voluntary producer responsibility measures?
  (Ms Hewitt) Both DTI and DETR have been involved in developing producer responsibility initiatives over the last couple of years. So far we have targeted packaging, which of course is the area where we have regulations rather than a voluntary approach, vehicles, tyres, electronic and electrical equipment, batteries and newspapers. Indeed, DETR recently announced a new voluntary agreement with the Newspaper Association on newspapers. If I can give you the example of ACORD, which is the Automotive Consortium on Recycling and Disposal, that has brought together the vehicle manufacturers, the dismantling and shredding industries and the plastics and rubbers sectors, and they have made very good headway, indeed it has given us a head start as we look ahead to having to implement the European Union Directive on end of life vehicles. We would take this case by case. We are certainly not saying that it has to be voluntary but we certainly have examples, and I have mentioned some, where voluntary agreements have delivered a very significant improvement in recycling and reuse rates. There are also situations where you will need statutory regulations. Indeed, in the case of waste packaging, the PRN system, I understand one of the reasons why we went for the regulation was because the industry itself said they were worried about bad companies undercutting good companies by free riding and not actually participating in the voluntary agreement. So it was industry pressure in that case that led to a statutory approach. In other cases we would have to do regulations in order to comply with a particular European Directive.

  1021. So you are quite happy with the responses you are receiving from industry?
  (Ms Hewitt) Yes. We have been making some very good progress in the sectors that I mentioned. The next one that we have singled out for targeting is junk mail, which as we all know produces an enormous amount of waste paper, and we have started working with the Direct Mail Association to see if we can conclude a producer responsibility agreement there.

  1022. If you have started doing it for motorcars, why can you not do it for chewing gum?
  (Ms Hewitt) I do not know. It is a very interesting and good point, given the way in which we all suffer from chewing gum waste of various kinds. I will make enquiries, Chairman, and let you know. I am not sure, to be honest, whether that is DTI or another department.
  (Dr Keddie) I am not sure. That is an interesting point.
  (Ms Hewitt) I will have to check and tell you in a note.

  1023. Some witnesses have suggested that the Government has taken a very weak approach to industry. How do you respond to those suggestions? For instance, Friends of the Earth write: "The target in the strategy for industrial and commercial waste cannot be described as challenging. It is weak in the extreme and shows an unwillingness in Government to challenge industry and commerce to improve its performance."
  (Ms Hewitt) I do not accept that. Clearly there is a certain amount of industry would say what they say, which is that they are facing some extremely challenging targets. When I look at the combination of the voluntary and the industry agreements on producer responsibility and the European Union Directives, the End of Life Vehicles Directive, the Directive on Electronic and Electrical Waste that is coming our way, various other Directives, it seems to me there is a pretty powerful combination there both of industry self-interest and response to our pressure to deliver more achievements on this and regulation, whether it is coming directly from the UK Government or indirectly via Brussels.

  1024. How much of a real contribution can the Waste and Resources Action Programme scheme make to the development of markets for recycled materials and waste minimisation?
  (Ms Hewitt) I believe that WRAP, which we have just launched, will make a very substantial contribution indeed. The Government is backing this new programme with £30 million investment over the next three years. What I think we have identified, and we began to identify in the earlier DTI recycling programme, is the very real barriers that have prevented the development of an effective market in recycled material. You have got the problem in some cases that manufacturers or producers simply do not know about the possibility of using recycled material as an input to their own production process, there is the problem that in many cases there are not good standards for recycled material, and therefore producers do not know and they cannot rely upon information to tell them that a recycled material can do the job just as effectively as the virgin material, and there is the problem that in some sectors we have got out of date regulations which instead of specifying, as it were, the quality of the input material specifies the nature of the material and specifically specifies virgin material and thereby excludes recyclates. What we have started to do in the DTI with a very small, almost a pilot programme, the recycling programme, is to support research and development that can pull through research and development in recyclates but also work in standard setting, and that is what WRAP will now take forward on a much, much larger scale. I believe the Committee is getting evidence from Vic Cocker, who is the new chairman of WRAP.

  1025. Could I just ask both Ministers whether you would agree with me that when the public think about renewable energy, they think about something that is clean and virtually limitless?
  (Ms Hewitt) My sense is that when the public think about renewable energy, they want something that is going to reduce the rate at which we are consuming fossil fuels and that will help to achieve a reduction in emissions.

  1026. Mr Timms?
  (Mr Timms) I agree with that. Patricia proposed a definition of renewable energy earlier in the hearing as a source which is continuously and sustainably available, and I think that will also marry with what members of the public think too.

  1027. But we have been told by Greenpeace that when you burn waste you get 80 per cent as much carbon dioxide as you do from generating electricity in a gas-fired power station. Surely the purpose of renewable energy is to help stop climate change, is it not?
  (Ms Hewitt) I was trying to make the point earlier that providing you are taking a proper approach to minimising the generation of waste in the first place and then recycling and reusing where possible, the generation of energy from the residue, as it were, of waste will displace the generation of energy from fossil fuels and the accompanying emissions which go with it, and therefore it has got a contribution to make in achieving our goals for sustainable and indeed affordable energy. The other point I would make is that we have already got a pretty powerful system of regulation for waste incineration. We have demanding technical standards and we have two European Union directives being proposed on this, one on waste incineration and the other on hazardous waste incineration, which will raise those technical standards further across the European Union although, because we have taken a lead in this, it is true to say most if not all of our newer incineration plants would already meet those new standards.

  1028. Could I ask, again both departments, whether you have no view whatsoever in terms of what the hierarchy should be for renewable energies? Are not some renewable energies—and you are suggesting energy from waste is a renewable energy—better than others? What are you doing to promote those which are cleaner and do not, as in the case of energy from waste, generate four-fifths as much emissions as a normal gas-fired power station?
  (Ms Hewitt) I would make two points. First of all, even methods of disposing of waste which Greenpeace might prefer, like composting, make their own contribution towards greenhouse gases, in particular methane gas. Secondly, of course, we take a view about how we design the system of incentives and subsidies, and I was saying earlier that we very deliberately propose to exclude energy from waste incineration from the new renewables obligation.

  1029. Can you tell us exactly what it is and how it is breaking down? It is 10 per cent, is it not? How is it going to be met by the different sectors?
  (Ms Hewitt) The target is for 10 per cent of generation to come from renewables. We believe that energy from waste incineration will deliver about 25 per cent of that. I have not, I am afraid, got in my head—and I turn to Alistair for this—
  (Dr Keddie) The answer, Chairman, to your question, is that the other 75 per cent will come from a range—wind power and so on—and to some extent that will depend on how fast the various other forms of renewable energy penetrate the market place. So it is partly related to economics and technical developments.

  Chairman: When you say 75 per cent will come from other things and then you say it is how quickly the market develops, is there not a danger that it will not be met from that area, in which case is waste going to produce a bigger proportion of it?

  1030. Is the 25 per cent a cap, in other words?
  (Ms Hewitt) We will monitor this extremely carefully but I would stress—

  1031. No, that was not the question—monitoring it. The question was put very nicely by Tom Brake, is there going to be a cap of 25 per cent?
  (Ms Hewitt) I do not think we have the instruments to design a market such that you could cap the contribution made to generation from waste incineration at 25 per cent, any more than you could, or would want to, cap the contribution from renewables at 10 per cent of the total market. But the new renewables obligation that will replace NFFO is going to be a pretty powerful instrument for helping to create a much larger share of generation from wind power, solar power and other sources of renewable energy.
  (Mr Timms) We know we are going to have a significant amount of incineration, we have at the moment and we will have in the future. I think it must be a good thing if that process also generates energy because it is a process which is going to happen, so that is a gain. The other point I would make, arising from my work on the Climate Change Levy, we are supporting the development of other renewable energy resources from the Climate Change Levy from the £50 million over the coming three years.

  1032. But you are exempting energy from waste in the Climate Change Levy.
  (Mr Timms) But the point I am making is that part of the proceeds from the Climate Change Levy we are re-investing in research and development on renewable energy sources, particularly wind energy and energy crops. So it is not true to say we are not investing in the development of those sources, we certainly are.

  Mr Brake: Thank you.

  1033. What research has the Treasury done into the employment implications of greater recycling?
  (Mr Timms) I am not aware of any research that we have commissioned. I am aware of beneficial impacts from the development of recycling, for example I met recently the chief executive of the Groundwork Trust, which has had quite a big role in the environmental option on the New Deal, and they had some very interesting projects which have helped people into work and developed community recycling as well. Whether there is an overall impact on the labour market from the development of community recycling, I certainly have not seen any definitive evidence to show that is the case. I think probably the jury is rather out on that. It may or it may not.

  1034. Can I pursue this question of newspaper recycling? As I understand it, it was one of the ones in which there was a claim of a good voluntary agreement being in place. Will that level of recycling of newsprint be possible using newspapers from the United Kingdom, or will it actually involve the import of recycled paper?
  (Ms Hewitt) Michael Meacher was the lead minister on this. My understanding is that of the targets we have agreed with the industry—60 per cent recycled by the end of next year, 70 per cent by the end of 2006—that latter target is subject to review and to the availability of UK newsprint manufacturing capacity, and there is an issue there we need to consider.

  1035. I understand one of the crucial questions is that we need one extra line for producing recycled paper for newspapers in this country.
  (Ms Hewitt) That certainly is the point which has been made to us.

  1036. I understand a proposal was put up by Aylesford Mill to actually put in that extra line and that it went to the Treasury for the Treasury to review it. Do you know anything about that?
  (Mr Timms) I am aware that the proposal has been made. I am not quite sure by which route that would have reached the Treasury but I can certainly check.

  1037. If you could make some enquiries because certainly as far as the Committee is concerned it seems to be a fairly murky area. It is suggested that the Treasury then turned down the proposals for the Aylesford Mill because it did not have many employment opportunities as a result of it. Having seen one of their production lines at Aylesford, I can well see that actually on the line there would be very few people employed but I would have thought that in the process of collecting in old newspapers there would be quite a number of jobs.
  (Ms Hewitt) Chairman, if I can respond on this. No decision has been made on that particular investment proposal. There has certainly been correspondence between DTI and DETR on the subject. DETR, I believe, is in the lead on it, but no decision has yet been made.

  1038. It is a question for your colleague when he comes next week.
  (Ms Hewitt) I expect it is.

  1039. What advice would you, as the Department, be giving? Is it a good idea? Are the jobs important or not?
  (Ms Hewitt) There are commercial considerations which are very important in this and which I think we are still exploring with the company.

  1040. In the House of Commons on Friday John Gummer referred to some of the problems with the Packaging Regulations and the fact that he thought there was a substantial amount of tax evasion there or regulation evasion. Is there anything being done to chase that up?
  (Ms Hewitt) I am afraid I did not see Mr Gummer's contribution on Friday. I am not aware of that as an issue, it certainly has not been raised with me. Perhaps I could check back on this and let you have a note.

  1041. The last comment he made was about this Tyre Recycling Committee. He seemed a little surprised that on it there was not a single tyre recycler. Is there any reason for that?
  (Dr Keddie) We would need to go back and look at the membership but as far as I am aware it covers most, if not all, of the interests. I would need to check the actual facts.

  1042. He claims that it has the tyre makers and the tyre retreaders but not a single tyre recycler.
  (Ms Hewitt) That is something I will check and I am grateful to you for drawing it to my attention.

  Chairman: On that note, can I thank you very much for your evidence.