Mr Neil Thornton, Mr Tony Pedrotti and Dr David Evans

27 NOVEMBER 2007

  Q1  Chairman: Good morning. Welcome to all on behalf of the Committee. This is our opening session on waste reduction. We are very grateful to all three of you for finding time to come and for coming together because I think this enables us to compare and contrast. I suspect there may be some initiatives on which you are singing from pretty well the same hymn sheet. If that is the case, perhaps one person can answer on behalf of the others so we can get through a quite lengthy number of questions. Perhaps I might start off with a general question. What do you see as the role of Government in addressing the waste reduction issue, in terms of what it is at the moment and where you would like it to be, let us say, two years from now?

  Mr Thornton: Thank you, my Lord Chairman. The Government's role in waste reduction is obviously much the same as the Government's role in relation to waste in general. You, I am sure, will have seen that we had a public waste strategy earlier this year which talks about the Government's involvement in waste business, where our purposes are the usual ones: to protect the environment, to protect public health, and, increasingly in the current world, to contribute to mitigation of climate change risks arising from waste, and there are various ways in which that happens. In that context, we followed the waste hierarchy which establishes that waste prevention—not having waste in the first place—is usually environmentally the best outcome and, thereafter, if you do have waste, the waste hierarchy defines in European compatible terms how it should be handled. So the Government's role in relation to waste is one of contributing to an economy which seeks to reduce the environmental impacts of waste, notably climate change. We have a particular responsibility in relation to municipal waste, because that is a public service provided by local government, guided, if you like, by central government, and of course we have very particular obligations in relation to the Landfill Directive to change the way in which we handle our municipal waste, where the main damage for climate change is the biodegradable waste that is going into landfill generating landfill gas. The rest of waste—and of course it is a larger amount—is very largely a market which Government influences. Commercial waste, industrial waste, mining/construction wastes are arising in the normal course of business in the economy and we seek to minimise their impacts on the environment and on climate change using the usual range of measures available to Government, influencing those markets rather than, as it were, owning them and controlling them. If I come back to waste prevention, we are seeking to achieve less waste arising in the first place. That can be through people designing products differently; through people using products longer rather than discarding them early in their life. It can be about the materials that are put into products; it can be about the weight of the product—although weight is not always the critical question. The question is always the environmental impact. Our role is to help the economy move in the direction it seeks to. Waste is, after all, wasteful, and there is a sense generally that you do not want too much waste. If we look at people in their homes, working with recycling and so on, they are beginning to recognise the implications. There are various measures that obviously contribute to that. The big one I guess would be the landfill tax, which, although it is not operative only in relation to prevention of waste, certainly seeks to prevent waste because it changes the price of getting rid of waste. The various other measures I am sure we will touch on as we go through. The last thing I would like to say by way of general introduction on waste prevention is that we are increasingly trying to see waste in relation to the whole product life-cycle. That is a standard sense for those who think about waste at the European level—and many of the people who have sent you memoranda have talked in the same terms. Therefore it is very important that, when we look at waste prevention, we are thinking about the product on the way to the waste and reducing that by various measures, including, for example, packaging regulations, End of Life Vehicles regulations and so on.

  Q2  Chairman: We have a copy of the Waste Strategy for England 2007, which is a Defra publication. Obviously there are three departments represented today, but the fact that you kicked off means probably that Defra has the lead responsibility.

  Mr Thornton: That is correct.

  Q3  Chairman: Can we discern a strategy across Government, an interdepartmental strategy? Perhaps your colleagues could, at this point, contribute to our discussion in that respect and then maybe you could come in afterwards, Mr Thornton. Mr Pedrotti, how do you see the role of BERR in the development or the implementation of the strategy, given that it would appear that Defra has the lead role?

  Mr Pedrotti: This might sound a bit of a glib response, but in partnership. Certainly within my department it is not a case of looking at, say, waste issues or product development, sustainable development, sustainable consumption or production and saying, "That's all Defra's and we do not engage with that, we leave them alone." On product legislation, on End of Life Vehicles, on Waste Electrical Equipment and, indeed, currently on batteries, we have a joint project board that works between my department and Defra, so it is not divorced. Also, when it comes to other parts of BERR, regarding energy efficiency and climate change these departments have to work together. My department is not so much the mouthpiece of business but it understands what the challenges are of business and can bring that into the negotiation and discussion. A document, such as the one you have quoted, has been brought forward with that taken into consideration as part of that whole package.

  Dr Evans: On behalf of Innovation, Universities and Skills, our role is about ensuring that the UK's knowledge base, the knowledge that is embodied in people in relation to skills, the knowledge that exists in universities and the outcomes we have secured through our support for innovation in business all leads to a better outcome in terms of exploitation of economic growth and quality of life. Our role is to try to make sure that the knowledge that we both create and support can be deployed by businesses and individuals to support the kinds of objectives which Neil talked about.

  Q4  Chairman: Is the innovation unit part of the old DTI?

  Dr Evans: Yes.

  Q5  Chairman: Maybe the question to you should be: how are you getting on with the rest of DIUS?

  Dr Evans: I think very well. There is a really good opportunity for us in taking the innovation agenda forward to think harder about the relationship with the whole world of skills, meaning the skills that are engendered through the post-19 skills at work of my department but also higher level of skills for people coming through universities at undergraduate and postgraduate level. My personal perception would be to say that we have worked quite hard on the university agenda. Lord Sainsbury, of course, is a big proponent of changing the way the UK's university structure contributed to economic growth and we have made a lot of policy changes moving in that direction. I think that was quite well-tilled territory but there are still opportunities for us to do better. I think there are further opportunities for us to work with the further education sector to ensure that the Skills Agenda, working with Sector Skills Councils and others, takes more account of innovation in the future than it did in the past. I would also like to say that it is very important that we do not lose touch with our colleagues in the business department because they have direct experience of the challenges facing individual sectors. It is not our intention to try to reproduce that. We want to be in good connection with them, including on the kinds of challenges which can reduce the competitiveness and effectiveness of British business which we are here to talk to you about this morning.

  Q6  Chairman: The impression I get is that so far the Government responses have been following European Directives like WEEE and End of Life Vehicles, and they tended to be tactical in character rather than strategic. Are you now in a position, having been buffeted by these EU Directives, to really knit the three departments responsible together? I presume, Mr Thornton, that is where Defra ought to be taking a lead role. Would that be right?

  Mr Thornton: Yes, that would be absolutely right. The Waste Strategy was a Government strategy obviously. The Defra branding recognised that we took the lead. In the strategy we have made it clear that we will continue to chair a Whitehall group which will drive the strategy forward so it is very united. Of course it is not only the departments here; notably I would also refer to Communities and Local Government and the Treasury as very important players and the Environment Agency were part of the process that devised the strategy. You are right to say that European legislation is very important in waste. That is partly because waste and products obviously potentially cross boundaries and a lot of internal market freedoms need to be maintained, so most of these decisions are better taken at European level and of course many of the business decisions, like design of vehicles, for example, are frequently taken by European businesses. You are right, perhaps, to infer that to some extent we have been chasing the game in some aspects. In relation to the Landfill Directive, a few years back we were said to be a little behind the game in relation to the targets we had set and we think we have improved on them. But, of course, those European Directives are negotiated by governments in Europe at the European level and Europe itself is taking a more strategic approach. They published a series of, I think, seven thematic strategies of which one was on the prevention and recycling of waste. They are in the throes of revising the Waste Framework Directive, the overarching Directive which sets the principles of waste legislation, and they are also linking that back into the sustainable consumption and production wider agenda which I described. They will be producing a sustainable consumption and production action plan in the spring and it is encouraging that that has been linked with work in the Competitiveness Council on the greening of industry. We see a joint approach at European level which we very strongly welcome.

  Q7  Lord Lewis of Newnham: I think it is fair to say that on a number of occasions when we have visited Brussels the impression I have certainly gathered is that the UK is reactive rather than proactive as far as any problem with this waste and environmental work is concerned. How does Defra, or whoever the appropriate department is, influence the trend and in fact lead rather than follow as far as Waste Directives are concerned? It seems to me that when one looks at Germany particularly, I think, and some of the Scandinavian countries who are very much in the forefront there, we seem to be following them in a rather laggardly way. The complication is further, as far as I am concerned, in as much as that, when the legislation comes through, that area which is responsible for making sure it is implemented is the Environment Agency and I am not at all clear now exactly what influence the Environment Agency has in influencing the course of legislation. Clearly people who have to implement it have a strong knowledge and potential understanding of what the problems are going to be. I know there was a memorandum of understanding between the Environment Agency and Defra, as it then was. I am not sure how successful that has been or whether it has many implications whatsoever to this particular problem.

  Mr Thornton: I certainly would not want to argue that the UK has always been in the vanguard in Europe in seeking intrusive or protective waste legislation. You are right to say that some other Member States have in the past been more active in that area. Of course, in relation to landfill, we have, in some sense, been directed by our industrial and our geographical past, so the fact that we have more landfill sites than, say, the Netherlands is a matter of necessary fact as well as a matter of history. So there are undoubtedly some areas where we have been catching up with good European practice. Also, the increased emphasis on climate change has improved the motivation and recognition here that those are proper things to pursue. I think I can best assert that we are trying to do better by taking the example of the Waste Framework Directive renegotiation where one of my colleagues is leading the policy-making end of that negotiation, in close consultation with other departments and with the Environment Agency, as it were, in the room. We agree, you cannot sensibly negotiate a Directive unless you know what it is going to be like to implement and the Environment Agency has been absolutely part of the team that has been preparing our negotiating position and we work through the usual mechanisms, obviously, keeping a very close touch with UKREP, with the Commission, working with the European Parliament's Rapporteur Caroline Jackson and so on. We think we are doing better but I am sure there is a way to go.

  Q8  Earl of Selborne: In your written evidence on sustainable public procurement you note that the Government and the wider public sector spends around £150 billion. Is there a target for sustainable procurement within government departments?

  Mr Thornton: There are targets for Government departments' own procurement and own behaviour. We are seeking to reduce waste from the Government estate by 5 per cent by 2010 compared with 2004-05 levels and by 25 per cent by 2020. We are also seeking to establish recycling rates in own waste, if you like, of 40 per cent by 2010 and 75 per cent by 2020. Some of that is going reasonably well. The recycling figures are running at about 50 per cent at the moment. However, the waste reduction figures are not going so well. Waste in the Government estate is thought to have increased by about 10-13 per cent in the past year from the 16 departments who have reported figures. That may be partly a measurement issue but it certainly is not pointing in the right direction.

  Q9  Earl of Selborne: What about the timetable? You talk about mandating minimum product standards for a wide range of categories and commodities.

  Mr Thornton: Yes. We are working on trying to use the power of Government procurement, as you rightly identify, to improve the way the markets can work and to set standards that can then be adopted elsewhere, as well as in terms of the Government's buying power. With our Market Transformation Programme we are seeking to identify products where the best win would be had from establishing Government procurement standards and we are hoping to consult on new standards in a matter of months.

  Q10  Earl of Selborne: Then you will have a timescale to deliver on?

  Mr Thornton: Yes. We will then ensure there is a delivery plan and a process by which we establish those standards. We would obviously be seeking to establish standards that would also be relevant to the wider economy. They would be adopted in Government first. That is the kind of point that the Commission on Environmental Markets and Economic Performance, which just reported last week, is very strongly saying: the Government should use its power in the economy to drive performance where it can be adopted elsewhere later.

  Q11  Lord Haskel: Is the intention also to encourage new technologies or to drive down price?

  Dr Evans: The intention, certainly from the point of view of my department, is both. It is both to get better value for money, although I would have to say that better value for money is usually measured by whole-life cost rather than, upfront, a price of the procurement. That is probably the big problem we have come from, in that the way that Government has procured in the past has focused too much on the initial cost and not enough on the whole lifetime cost. My department has started thinking about what we can do to help in the area of Government procurement in order to get better value for money for the taxpayer and better performance from the point of view of business. We have worked with the Technology Strategy Board to try to identify opportunities where we have upcoming procurement. We have created something called an Innovation Platform as a model for investment. We have a couple of those running with other Government departments. One is with the Department of Transport about low carbon vehicles and another is with the Department of Communities about low environmental impact buildings, going in the direction of the "zero carbon" house which the Government has said it wants to impose regulatorily from 2016. These are ways in which we can use R&D investment, R&D grants with business to help bring forward the kind of products which meet society's needs, as well as, we hope, creating businesses which will be world beating.

  Q12  Lord Howie of Troon: You have mentioned targets and timescales. I am wondering how you arrive at them. Are they reliable or are they just "feel good" things?

  Mr Thornton: We try to arrive at them, as you would expect, in a way which gives us a reasonable prospect of meeting the targets, so that would require us to have some evidence for the target: what is going on in the economy at the moment, what we think might be achievable in the timeframes we are talking about. Typically there will be quite a discussion, both amongst Whitehall departments and with our ministers, about what the level of target with most sensibly be set out. Obviously there are some targets that are aspirational, in the sense that we are saying we are seeking for the economy to achieve this kind of level of recycling, but there is not a mechanism available to us to force it. There are some targets, like, for example, the landfill allowances for local government, which are more than targets, very much more than targets; they are obligations, where we are trying to meet a European figure. The Waste Strategy does set out quite a wide range of targets of both kinds and I think the general principle would be evidence-basing and stretching but achievable. I think that would be the nearest one could get.

  Q13  Lord Howie of Troon: You say there are obligations, is anyone reaching them?

  Mr Thornton: Those that are obligations we are, of course, looking at very closely. On landfill allowances—and I do not know how closely you monitor that system—we have an obligation on biodegradable municipal waste for the years 2009-10, 2012-13 and 2019-20 which are absolute obligations on us in European law. In England, where we have something like 180 disposal authorities, clearly that is not something that Government can achieve centrally so we have laid obligations on local governments, in a cap and trade system, if you like, and we are very closely monitoring how they are performing. There are penalties that they would have to meet if they were not meeting its obligations. So far that is working and it is working quite well.

  Q14  Lord Methuen: You have mentioned landfill tax to some small degree. How do you see that increases in landfill tax will feed back to manufacturers to encourage waste reduction? In a lot of cases the product is going to landfill much later in its life, although obviously in the manufacturing process there is some output to landfill.

  Mr Thornton: I suppose there are two versions of that for my answer. One is in the relatively narrow sense that some parts of landfill tax, revenues, have been used to help the business community to improve its product and its waste performance, using the BREW (Business Resource Efficiency and Waste) programme which has been in place up until this current year. That has helped to fund bodies like the National Industrial Symbiosis Programme, WRAP, Envirowise, to provide advice and brokerage services to the business community to help them to improve their performance and to improve their profitability. The more fundamental question is, obviously, if you put a very substantial tax into the economy, you change relative prices in the economy. It is very consistent with Nick Stern's analysis of how one should be addressing the environmental impact of climate change. Landfill tax is changing the price of waste because landfill, almost now, and certainly in the near future, will not be the cheapest way of disposing of most wastes and therefore people will feel more reluctant to generate waste because it costs them more, so you change the economics of the business model.

  Q15  Lord Crickhowell: We are getting into a dilemma here. We talk about sustainable product standards, product life-cycles in a way that involves two things: trying to make the product last longer perhaps, or, if it is disposable, making sure that it can be broken down easily and disposed of separately or taken back. But there is a problem here. Yes, with buildings you can probably make buildings so that they last much longer and you have to replace them less and they use less waste along the road, but we are in a very fast developing technology world and in most of the modern technologies, electronics and so on, the whole process of development gets faster and faster and faster and you no sooner have a product than you are asked to replace it and invited by manufacturers to replace it. Very often they do not ask for it to be taken back in again. How are you setting about reconciling this? In the days when I was encouraging inward investment as a minister, every time I went to a country like Japan I was simply startled by what had happened in developing the new products, which are always smaller and lighter and more attractive than the one before. There is a big dilemma here. Would you like to comment on it?

  Mr Thornton: Yes. I will ask Tony Pedrotti to talk about electronic goods in particular, where, you are right, the product cycles move very fast. As a general point, there is no point in us in Government kicking against the market. We have to work with the grain of the market, we have to work with what consumers want and what businesses find they can generate, so I think our emphasis needs to be in different product areas, to think through the environmental impacts of that product life-cycle and to try to focus our policy interventions or our approaches to the consumer and the business community on those areas where the worst damages come through. Of course you are right to say that there are some areas—and End of Life Vehicles is another area which is also the responsibility of the Business department—where design is terribly important. Product design which you can influence at the front end and put some pressure there. To mention one thing that my department is involved in before I pass to Tony, we recognise in central Government that you cannot employ enough civil servants to have a life-cycle analysis of every product in the economy, even if anybody thought that was a sensible thing to do, so we are trying to take some generic product types and think through the impacts of those product types in the hope that that will inform the business community and consumers about the way in which they address products. We call those "product roadmaps". We are looking at, for example, milk, at, for example, clothing, at where the impacts arise. Vehicles is perhaps one that we are thinking about for the future but it has, in substantial part, been thought about at the European level already. Perhaps I could ask Tony to pick up on the fast-moving electronics question.

  Mr Pedrotti: Without doubt, it is a growing problem. Waste electrical equipment is the fastest growing waste stream in the EU because, as you say, the products get put on the market and, although they might not quite be obsolete, the consumer wants the next one and a lighter one, et cetera. We are trying to tackle it basically from both ends. You have two pieces of legislation: Restriction of Hazardous Substances Regulations which were developed to try to encourage (i) companies to start thinking about the product and how to design it more efficiently, and (ii) not to put rather nasty environmental elements within that electronic equipment; you then have the Waste Electronic Equipment Regulations that put in place a system where at the end of its life it is not just landfill and it is captured and it is treated and recycled. Part of that process, obviously, is challenging manufacturers, not just within the EU but internationally, to start thinking about their products in a different way, not just, "Let's get the latest gadget out" so you are talking about eco-design, as Neil mentioned. The other thing we have tried to do in implementing the WEEE regulations within the UK is to encourage the reuse of appliances. Whilst one consumer may feel that that product is not what they need any more, there are plenty of other people who can make full use of that product and so we have built into that system the encouragement of the reuse of old appliances, but we do have to look beyond just, say, the UK or the EU from a production point of view. You were mentioning earlier about influencing Europe and we are behind the game regarding some of the environmental legislation. I am quite pleased that a member of my team—and I will give him a big head undoubtedly—is respected around not only Europe but in the US and the Far East and China as the world expert when it comes to RoHS (Restriction of Hazardous Substances Regulations). He is working with the Chinese Government to challenge their manufacturers to start thinking about this. Rather than just seeing it as a UK problem, that when it is imported we have to deal with it at the end of its life, we are trying to get in at the start of the process. If I allowed him to be, he would be based outside of the UK virtually all year round, because he has that type of reputation to try to help these companies. Waste electrical equipment is a huge challenge.

  Q16  Lord Crickhowell: I am already being pressed to upgrade my mobile at the end of this year. There may be very good reasons for doing so—every 12 months you are invited to do just that. What pressure is put on making the company which is upgrading take back your original model? None that I see at the moment, so I put it straight in the drawer of former larger, less good mobiles. Furthermore, with batteries, if I go around Europe I find that outside every chemist shop there is a container in which small batteries can be placed. There is a lot of effort made to get rid of big batteries in this country but I see practically no effort to get rid of the small batteries which most of us, even if they come out of our hearing aids, look at rather despairingly when we change them. Is regulation getting where we need it to go?

  Mr Pedrotti: I can assure you that for 99.9 per cent of the mobile phones which do not stay in drawers, if you take them back to the shop when you were upgrading they will take them off your hands.

  Q17  Lord Crickhowell: There is nothing to make them do that.

  Mr Pedrotti: There is no obligation on the consumer to do that. Part of the Waste Electrical Equipment Regulations is trying to shift consumer behaviour. Particularly with the smaller household item, not so much the larger domestic appliance, the message is, "Do not black bag it". With regard to mobile phone, mobile phone companies are working very hard to try to encourage people to bring their old phones back. Indeed, when they do come back, a very high proportion are reused, either in this country or elsewhere. So it is not a case of you handing the phone back to them and then they destroy it; they are reused. Particularly the older type ones that may be sitting in your drawer, they love, because they are so hardy compared to, say, your latest upgrade. Regarding batteries, there is a separate set of legislation, a third producer responsibility regulation. We are working to a timetable of implementation for September 2008. You are quite right that at this moment in time in the UK we do have a very strong track record when it comes to large-scale industrial and also automotive but on the portable side we currently recycle around 1 per cent. So we are doing something to address this matter.

  Q18  Lord Haskel: You are beginning to touch on the point I was going to ask. Most businesses sell products which they are trying to get as fashion products so that they can get a premium on them. But when they go out of fashion they are still serviceable, and there is quite a market, particularly with clothing, selling it to third world countries and so on. How do you view this from the waste reduction point of view? Do you consider that as disposed of as waste, or do you consider that as something which has just sort of disappeared from the market?

  Mr Thornton: Your point is completely made, in a sense. In the opening remarks, I said that we need to look at waste as one part of the product life-cycle: it is the end of life. It might be typically responsible for 25 per cent of the environmental impacts of a product. We are working on a clothing roadmap, in consultation with stakeholders and interested partners, and clothing is also interesting because it is not only about climate change and energy impacts, it is has very substantial water impact, as you can imagine, and also brings in societal concerns of child labour and so on in some of the fast-moving fashion goods. We certainly do not look at things like clothing only as an end-of-life issue but we do want to deal with them responsibly when they do reach end of life. One of the questions with fashion garments is often that the materials are mixed materials and it is not always easy to generate something reusable or of high value from the materials you are getting at the end of life, so it is identifying how you can separate the materials and how you can bring them back into use. Obviously the role of the third sector, charity shops and so on, is reduced but it is by no means not there. There is still a great deal of reuse of clothing—as Tony has implied with electrical goods—often in other countries. We are seeking to get as much of a closed loop in the production cycle as we can, thinking about end of life as we think of front of life. With some products, the very heavily designed, the very dependent on a lot of technology up front, you may end up with a producer responsibility Directive of the kind you have with batteries and vehicles and electrical equipment. In other cases, you are trying to influence and inform the design houses, the major retailers who are handling clothing, to take an interest themselves in the environmental impact of the products they are carrying.

  Q19  Chairman: You say you are going to establish a unit to monitor this with a view to producing a report in 2008.

  Mr Thornton: Yes.