PARLIAMENTARY DEBATE
Environment Bill (First sitting) - 10 March 2020 (Commons/Public Bill Committees)

Q Good morning. I would like to start with some thoughts about the Office for Environmental Protection. You will have seen from the structure of the Bill that the office will be set up by the Government, essentially, and will have certain powers, but many people say that, in other areas, it lacks independence or teeth. What is your view of the structure of the OEP?

Martin Baxter: I might as well go first. I think we would share some of the concerns around independence. I think there is an opportunity for greater independence, particularly on the appointment and removal of the chair. The Office for Budget Responsibility has a confirmatory vote for the appointment of its chair, and I think a similar mechanism could be put in for the OEP. It has a wide range of powers and duties. Potentially, some of the powers could become duties, particularly if there are changes to targets, but, largely, it is a body that could have strategic effect in helping to drive improvements in environmental performance.

Signe Norberg: We would agree that the OEP will have a wide remit, and some of its powers are really welcome. We share the view that there are some aspects, with regard to its independence, that we would like strengthened, particularly on matters explicitly to do with funding and the commitment that the Government made previously, in the pre-legislative scrutiny on the previous draft Bill, to having an explicit five-year budget on the face of the Bill, to make sure that there would be long-term certainty. We also support calls for Parliament to have a role in the appointment of the chair of the OEP—making sure that the relevant Select Committee was involved in the appointment process.

Edward Lockhart-Mummery: I would just make a wider point, from a business perspective. I think that the OEP has an important role to play because it gives confidence in the overall system. That is why independence is important. I just wanted to fill in that gap as to why business thinks that independence is important in terms of having a really credible body. That can also be achieved in the way that it operates. I found this with the Committee on Climate Change. One of the important things is the appointment of the first chair—and, actually, the second chair. The chair can determine how a body like that works in practice—its credibility, the things it chooses to pursue, how it gives strategic advice, and things like that. So I think it is also very much the way, and the type of person who is the chair, that are important.

Q You reflected on the independence of the OEP and have suggested that concerns might be raised about its funding and funding cycle. Are there amendments you would like to see to the Bill to establish that independence in a clearcut way? Along with the OEP’s potential independence, would you like to see something specific in the Bill that protects its remit and funding cycle so we can be assured that it will not be subject to the vicissitudes of the Department or the Exchequer?

Signe Norberg: With regards to the specific areas of the Bill, there could be strengthening amendments to schedule 1, which sets out the appointment process. A paragraph in there to specify the role of the Select Committee in appointing the chair would strengthen the Bill, because the OEP’s chair has the power to select the other members. Within that, there is also a funding section, which could establish the five-year process. The important thing is that the OEP, with its formidable remit, will have independence and certainty in the long term. That should go beyond this Government, secure in the fact that successive Governments will deliver on the commitments. It should have a baseline budget to operate from, regardless of economic circumstances. If the funding mechanism in schedule 1 is strengthened, that would be welcome and really bolster the OEP’s ability to do its work.

Martin Baxter: In terms of a specific amendment, paragraph 2(1) of schedule 1 could be changed. It says:

“Non-executive members are to be appointed by the Secretary of State” ,

but you could add to that, “with confirmation from the Environmental Audit Committee and/or Environment, Food and Rural Affairs Committee.” That would give Parliament enhanced power in that appointments process. That is a targeted, small amendment that could enhance independence in the process.

Q Thank you so much for coming in; it is really appreciated. I have two points to pick up, one of which was raised by Ms Norberg. I think you suggested that the Office for Environmental Protection, the overarching body that will hold public bodies to account, ought to be more like the Office for Budget Responsibility, but that body does not have the enforcement functions that the OEP will have. Do you have any views about that?

Signe Norberg: The point about appointing the chair is more about ensuring that there is scrutiny around who is appointed as chair. We fully recognise that the OEP will have a different remit compared to the OBR. It is more about ensuring that Parliament has a role in appointing the chair.

Q The OBR and what we are proposing for the Office for Environmental Protection are quite different in terms of functions. The Office for Environmental Protection is more like the Equality and Human Rights Commission and very much set up on those lines. Do the others have views on that?

Martin Baxter: Given the importance of the OEP and questions about independence and holding public authorities, including Government, to account, stakeholders feel that that enhanced independence is very important. The model of having a confirmatory vote from the appropriate Select Committee in that appointments process is something that the OBR has in its remit, and we think that could be transferred across to the OEP as well. That is not to say that they do not have very different functions as bodies; we fully accept that.

Q Could I widen it out a bit? Industry and business have been very engaged in the development of the Bill, which is much appreciated. One of the strong messages we got from your two groups, in particular, was that you wanted legally binding targets and strong direction in the Bill. Why do you feel that is so important? Can you help the Committee understand whether the Bill is strong enough and why you want that?

Edward Lockhart-Mummery: You are absolutely right. We have been working on this for about two or three years with a wide group of business organisations. We have got 20 of the main business groups, covering all sectors, from the Federation of Small Businesses to the CBI, Make UK, Water UK and the Home Builders Federation. Consistently across that group, the notion of a long-term framework for the environment is incredibly important.

We did a bit of research looking at the timescales over which businesses take decisions, whether it is project cycles, investment cycles for capital, or whatever. A lot of the investment cycles are very long. Unless you have a long-term framework for the environment, it is difficult to make the kind of improvements that we would all like to see.

In the past, we have often had very short-term decision making on the environment, which makes it difficult for business to adjust. If we are constantly in that cycle of responding very quickly and introducing policies on a one or two-year basis, it is very hard for business. Everyone—human beings—wants to see a clean and good environment. Business supports that as much as everyone else. If they have clarity over the long-term direction of policy and a clear set of targets, they can start designing. Whatever sector you are in, you can start designing.

Let me give you a quick example. We are working with the home building sector on a sectoral plan for all new houses, for the environment, because we have got the clarity of net zero and because we are getting clarity on targets through the Environment Bill. The sector can suddenly sit down and start saying, “Right, these are the long-term things we need to plan for—water efficiency, flood resilience and air quality.” They can start investing in the R&D and driving innovation.

We think that is very important, and we advocated very strongly right from the start. We put together a blueprint for the Environment Bill. We have advocated very strongly to Treasury and others that that long-term framework is important. We think it is a game changer, in the sense that, as soon as you have that, rather than environment being a compliance issue within firms, it becomes a strategic issue within firms, sectors and local areas, where everyone can build this into what they are doing.

In principle, we think targets are fantastic and we really welcome them in the Bill. We also think that there are some small changes that could be made to the target-setting framework that would be win-wins. They would improve the ability to achieve environmental outcomes but also reduce costs and increase certainty for business. I will focus on two—so that I am not hogging the microphone, I might then hand over to colleagues. One is that we would really like to see clear objectives in the Bill. At the moment, there is a target-setting mechanism, but it is not exactly clear. It says that four targets will be set in four areas, but it is not clear exactly what targets would be set. It would give greater clarity to have objectives that consistently show what kind of targets are going to be set and give that long-term clarity for everyone.

We have often made the point that, in the past 10 years, we have had eight different Secretaries of State at the Department for Environment, Food and Rural Affairs. If they all set their own targets, depending on what they are interested in, you could end up with a patchwork of targets. We would really like to see clarity on the objectives. This is the kind of thing we are talking about. If the Bill said something like environmental objectives would be to have a healthy, resilient and biodiverse natural environment, an environment that supports human health and wellbeing for everyone, and sustainable use of resources, those would be high-level objectives but would give everyone clarity, as to how targets would be set.

May I just interrupt you there for a second? I might bring the other gentleman in from the Broadway group—

Q Can I come back to Mr Baxter first? In the brief you gave us before this sitting began, you mentioned two ways that you thought the Bill could be improved. Although you raised earlier the importance of the selection or election of the OEP chairman and so on, your focus in the written evidence was more on structural issues. Could you flesh out what you meant by

“enhancing the coherence between the different governance elements so they are mutually supportive and aligned to drive environmental improvement to a common purpose”?

That sounds like management-speak. Can you try to bring it alive and explain what you really have in mind and what the benefits of it are?

Martin Baxter: Certainly. There are three key elements in the governance section of the Bill. First is the process for setting legally binding targets, and underpinning that is the significant improvement test in the natural environment. The environmental principles have a slightly different objective, on environmental protection and sustainable development. The Office for Environmental Protection has a different set of objectives as well. We think there is a real opportunity to set a common purpose in terms of clear objectives, as Ed has outlined, and to point all aspects of the governance process into achieving those. That is where we think you could get far greater coherence and cohesion between the different elements.

Q Can I just explore that a bit more? On page 13, in part 1, the principle objective of the OEP is pretty clear:

“to contribute to—

(a) environmental protection, and

(b) the improvement of the natural environment.”

Page 1 of the Bill is about making provision to improve the natural environment and environmental protection. Those two seem to be very closely aligned, are then not?

Martin Baxter: In part, they are, but they could be further brought together. The real test of the targets and the EIPs is whether significant environmental improvement is being met. It is that test that underlies why we are setting targets and it forms the basis on which environmental principles will be applied, potentially, and also the role of the OEP. We think that could provide greater cohesion, via all things pointing to that common purpose.

Q Mr Lockhart-Mummery, you said early on that the Bill needed clear objectives at the beginning. Given what Mr Baxter has just said, do I take it that you want to see a fleshed-out opening paragraph that talks about not just improving the natural environment but what the benefits that we are looking for from that should be?

Edward Lockhart-Mummery: Exactly. Improving the natural environment is a good start. That could be clearer. For example, improving health is not there clearly in “improving the natural environment”, yet quite a lot that we would want to do—improving air quality, nature and so forth—is about health. Being really clear that this is also about health and wellbeing is important. Then there is sustainable resource use. At the moment, there is a big focus on single-use plastics, very rightly. If, in the very short term, we only thought about single-use plastics, we would not necessarily drive holistic sustainability overall. We might rush out of plastics into aluminium or other things, whereas what we really want to know is, right at the top, that this is about using the resources that we have sustainably. If that is clear at the top of the Bill, everything drives that. We do not take siloed short-term decisions, but we are clear that when we are setting targets we are looking to use our resources sustainably overall to contribute to a healthy, resilient, biodiverse natural environment, to health and to wellbeing for everyone. Those three objectives capture almost everything you could want to do through this Bill, alongside decarbonisation, which is the territory of the Climate Change Act 2008, but both are mutually supportive.

Q That sounds as if what both of you are saying is that you want to see an introductory paragraph that lays out, before the stuff that is quite process-y, the benefits that we are trying to drive out through this Environment Bill a bit more clearly.

Ms Norberg, your earlier statement was slightly different. It was less on the ambitions of what the output would be and more on further improvements to strengthen the regulatory framework and the target-setting process. There is quite a lot of detail in terms of the targets and interim targets, is there not? How much more process can a Bill really have?

Signe Norberg: I would begin by saying that we also support Broadway’s ask around an objective. We thoroughly support that because we think it gives the long-term direction—which is set out here, but an objective would provide a little more detail. In terms of the processes around interim targets and the target-setting process, this is not so much about adding in more process—as you say, what we have is already quite a heavy process document—but more about clarifying some aspects, which would be quite welcome. We have touched a little today on the interim targets. It is not about changing them but about maybe clarifying that when intermediate targets look to be off track, there is recourse to put them back on track or the Secretary of State looks at how we will get back on track by updating them. There is a little bit there, but this is about adding further language to clarify a point like that. This is not about adding further process; it is more about adding clarification.

Q Returning to the OEP, what are your thoughts on the relationship between the OEP and the environmental governance bodies, including the Committee on Climate Change, the Environment Agency and Natural England? Major budget cuts have clearly been made at Natural England recently, and the organisation has expressed concerns about its ability to monitor environmental breaches. What are your thoughts on how that works, or does not work, in the Bill?

Martin Baxter: We support the creation of the OEP. Its role in ensuring that public authorities fulfil their duties under environmental law is important. That remit is quite different from the role of the Environment Agency, Natural England and the Committee on Climate Change. That committee has an advisory role; it does a lot of analysis and a lot of fantastic work, but it does not have a role in holding public authorities to account for the delivery of net zero commitments. That is an important distinction to make between the OEP and the Committee on Climate Change.

Ideally, the OEP will be a strategic body able to look at where our governance system might either need to be strengthened or become more effective, and then make recommendations. It has an important monitoring and scrutiny role that extends into progress towards achieving long-term targets and looking at environmental improvement plans, so at least we will have a transparent and independent view of that, which is important. We welcome that.

The OEP also has an ability to advise on the implementation of environmental law. That implementation role is critical, because the effectiveness of environmental law is often in the extent to which it might be properly enforced. In terms of monitoring the implementation of environmental law, the OEP has the power to comment on whether there are sufficient resources in place for those laws to be properly implemented, enforced and delivered. There are the right hooks in the Bill, in terms of the OEP’s role and remit, to allow that to go forward.

Q You sound a wee bit equivocal or dubious about whether the OEP has sufficient powers to enforce this properly. That is the impression I am getting; correct me if I am wrong.

Martin Baxter: No, it has the powers to be able to do it. The question is how it chooses to use its powers. In setting up the OEP, one of the first things it has to do is develop its strategy, which will be absolutely crucial in determining the direction that it sees for itself, in terms of implementing the powers and duties that it has. If it chooses to utilise those powers to help to drive systemic change where there may be weaknesses in our system of environmental governance, that would be really welcome. That is what we expect it to be able to do.

Q Ms Norberg, in the event that, in the future after the passage of the Bill, the British Government—for whatever reason—do not perform very well and do not do the things that we believe they should, who should be the main accountable individual or group of individuals for that?

Signe Norberg: Within Government?

Q I am trying to say that you presumably want the Government to be accountable for this, through Parliament and, ultimately, to the electorate in our elections. Do you agree?

Signe Norberg: Yes.

Q So, going back to what we were talking about at the beginning around the Office for Environmental Protection, and thinking about accountability, what is your sense of giving more power to Parliament, as opposed to the Government? My reading is that that might actually impact on that accountability.

Signe Norberg: I am not entirely sure that I agree with that. The Bill gives a lot of powers to the Secretary of State to provide an overall framework to meet targets, working with the chair of the independent OEP. With regard to having Parliament as part of that, that is just an additional mechanism to give further authority to the OEP. It is not necessarily to act as a hindrance; it is more about the Bill giving Parliament a role in the OEP’s setting up, to make sure that it is truly independent, because it is meant to be for the ages. As you rightly put it, we do not know what will happen in the future, so this is more about ensuring that the setting up of the OEP, and particularly the chair, because of the essential role of the chair, is robust enough.

Q You mentioned independence. Do you think there is a danger that if you were to increase the distance between the OEP and the Secretary of State and the Department, you might end up in a situation in which the Government are trying to do one thing and the OEP is trying to do something else? Obviously, in all government there is a natural tension all the time, but I suppose my point is: do you not feel that, in our parliamentary system, we should hold the Secretary of State to account fully for all the decisions that get made, including those relating to the chair and the nature of everything we are talking about? Do you not worry that if you were to increase that distance, you might reduce accountability for that individual, because they may say, “Look, the Office for Environmental Protection did this, but I did not agree”?

Signe Norberg: The purpose of the OEP is to hold public authorities to account. Because of that, it should have a little bit of distance from the Secretary of State. That does not mean that it is completely separate. Through its annual reporting and so on, it should be able to criticise the Government where appropriate. Surely they should also work together. I am not necessarily sure that I agree that it would limit the effectiveness of the system itself. The OEP should be a critical, independent friend of the Government, to achieve that natural improvement.

Q So it should be a bit like an environmental National Audit Office, which is the way I like to think about it?

Signe Norberg: Yes, I would not disagree with that characterisation.

Edward Lockhart-Mummery: There is a relationship between Government and the electorate every five years. The OEP has an important role in making transparent just what is going on in the interim period so that the electorate has the right information every five years and can see transparently what has been going on, what the Government have been doing, how that has affected the outcome, whether the Government have been pulling the right levers and that kind of thing. That is a role that the CCC plays very effectively on climate change, because people are increasingly aware of how the Government are performing. There is a role. The CCC is playing that role with probably less independence than the OEP currently has.

I take your point that there is a question. You do not necessarily want to go to an extreme on independence. Somehow you need to get the balance right. The question of Parliament having a say over appointments is quite interesting, partly because when a Secretary of State is appointing a chair, they are thinking, “Is that a chair that the EFRA Committee and the EAC across all parties will accept?”. I think that is quite an interesting discipline. It removes any fear that it might just be the Secretary of State appointing their chums, if they know that it will be properly scrutinised across parties. That degree of independence would be quite effective, but I take your point.

The CCC is not particularly independent, but putting forward the advice on net zero was a bold thing to do. It was able to do that. The role of transparency and making clear to the electorate what is going on could be the body’s most important function.

I would also expect that an effective body would not take Government enforcement action all the time. What you do not want is a body constantly doing that. What the OEP might effectively do is make clear from the start, “These are the types of cases we are going to take and why.” That would send a clear signal to Government and then you would hope that there would not be loads of enforcement cases, with the OEP taking public bodies to court.

Q Following on from that question, clearly the duties of the OEP in investigation and enforcement are very important. We have a regulatory environment that finishes in December this year. The OEP will not be up and running in January next year. Do you have concerns that there will be a governance gap in the interim? How do you feel about the independence of enforcement, investigation and action that is taken on potential breaches in that interim period?

Signe Norberg: From what I understand, there is a Government ambition to prevent that being the case, and that is why we have seen the inclusion in the Bill of the interim chief executive officer. In so far as that is a safeguard to ensure that we have the OEP set up by 1 January, I think that is welcome. It stresses the importance of ensuring that this is robust enough and that you get on with appointing the permanent chair and the permanent executive directors of the OEP as quickly as possible.

Martin Baxter: If you look at the role of the European Commission, which is where in part the OEP comes from in terms of its functions and that watchdog role, the Commission moves very slowly. It does not take rapid action. It does not instigate infraction proceedings against member states. There is a build-up of a process by which you can start to see the Commission giving a warning shot across the bows, where there might be a member state that is not in a position to achieve everything. I do not see a huge challenge in terms of a governance gap with the OEP becoming set up in the timescales that are being discussed. I do not think that is a material weakness.

Q This is a different subject, but something you alluded to earlier was the need for a broader strategic aim. Other countries have an overarching environmental objective as part of their environmental legislation. The shadow Minister, my hon. Friend the Member for Southampton, Test, has tabled an amendment that at the start of the Bill there should be a clause stating an environmental objective. Do you think that would improve and strengthen the Bill?

Martin Baxter: Definitely; I think we made that clear in our earlier comments. We see that internationally. The Dutch Environment and Planning Act has a clear set of objectives that frame the purpose of the legislation. I think you also see that in the Environment (Wales) Act 2016. This is not without precedent in the UK and internationally. It provides that direction of travel and the opportunity to think about the different parts of the Bill as a coherent whole.

Q I am interested in the witnesses’ views on the whole system of environmental governance and how well it works together, including the targets, the environmental protections and the Office for Environmental Protection. Do you think that it works together holistically? Are there any gaps? It would be good to get your views on that.

Martin Baxter: We have touched on the issue of coherence, which is fine. The key elements of a national framework are there, at least for England, because the governance aspects do not stretch into all parts of the UK. It is important to recognise that. There is a certain rhythm between the process for setting targets and the development of an environmental improvement plan, which is aligned to achieving the targets. Then there is a process of implementation and reporting by the Secretary of State, and commentary and reporting by the Office for Environmental Protection. That is good.

There is potentially a question from our perspective over the transmission mechanism from national policy, targets and plans down to what this means in the spatial context. That has not been brought forward in the Bill. We have local nature recovery strategies, which are in the nature chapter. We have requirements on water management plans, which are in the water chapter. But there was the potential to bring together, at a local level, more coherence to environmental improvement strategies in places, which can be contextualised to local environments and provide the basis for local people to be able to engage in democratic processes in helping to set priorities. That is where we would look at completing a full governance framework. That is the direction of travel that we would like to see.

Q You referred to objectives earlier. Is there not a risk that you could look at these objectives and set targets a little too early —putting the cart before the horse—before we have had a chance to delve into the detail and heard everybody’s expert advice?

Edward Lockhart-Mummery: I take your point. Like many organisations that we work closely with, we argued strongly not to have set targets on the face of the Bill, because it is really important that there is an inclusive discussion about what the right targets are, which targets will build on what people already do, how quickly we can meet targets and how much they will cost. We think that having a target-setting process in the Bill is the right way to go, and then there can be a discussion about what targets are appropriate.

If you do not have something guiding what you are trying to achieve from those targets, then it is not clear what the targets are for. We would not support two pages or 10 pages setting out in detail what you are trying to achieve. We need something saying that it is about a healthy environment, the health and wellbeing of people, and sustainable resource use. We think that is the right level of detail to guide target setting.

I have worked in environmental policy for 20 years. Those three things are always the purpose of environmental policy. That is not second guessing or putting the cart before the horse, because we know from experience that those are things we are trying to achieve. If we put those on the face of the Bill, it will be clear.

Having knowledge of all the Secretaries of State over the past 10 years, any self-respecting Secretary of State would have wanted to put a target in. However, if a Secretary of State was really interested in butterflies or single-use plastics, you would end up with targets all over the place. What you want is clarity about what you are trying to achieve through targets, and we feel that something high level would be helpful.

Q You talk about having a healthy environment as an objective. How would you legally define a healthy environment? If it is on the face of the Bill, we need legal certainty about what the concept means. Otherwise, are we not just creating legal confusion and vagueness?

Edward Lockhart-Mummery: It is something that has precedent in Welsh law. There would need to be a process of defining in more detail what it means. There are other terms in the Bill that need to be defined, such as the significant improvement test for the targets. There would need to be a process. I would argue that that would be quite a helpful process, because then we would have a public conversation about what we mean by “healthy”. Is it that people going about in their daily lives and going to school should be able to do so without dying? What does it mean, and what is the proportionate, sensible definition for that? You are right that it would need to be defined in this context, but the process of defining it is probably an important step towards achieving the outcome.

Q One thing we have not heard this morning, in the context of how the OEP and the targets that are to be set might work, is the fact that all this is taking over from the environmental protections that were there through the European Union when we were members. Do you think the Bill allows for the transition of those protections to a UK context to be sufficiently enforced and, ideally, enhanced? Or do you think there needs to be anything else in the Bill that can perhaps ensure that there is no regression in standards as we move forward with these new arrangements?

Signe Norberg: With regard to whether or not it would sufficiently transfer protections into a UK context, it is important, as Martin pointed out earlier, to noteeb;normal;j that the Bill itself predominantly applies to England. There must be processes through which the devolved Administrations set up their independent supervisory bodies, but they also all need to work together. Through that, the Bill has the right building blocks; it will be about how those bodies co-ordinate among themselves.

In and of itself, the Bill does not inherently prevent future regression from standards, but there could be mechanisms within the Bill to clarify that. For instance, if you had strong language in the objective about maintaining high environmental standards, that would clearly set out that it should not be a regression. We recognise that there is not an intention for a regression to take place, but that could be an example of how you would potentially safeguard against that.

Edward Lockhart-Mummery: On day one, of course, we roll over all existing standards, and then we have the OEP in place to enforce. That gives us the starting point. With a few tweaks, this governance framework ensures that we at least maintain and improve, because you have that process of setting targets that always have to improve, and because the governance process is set out with the environmental improvement plans and principles, with the Office for Environmental Protection overseeing everything.

If that works, we are in a better position and we can really think creatively here. What are the structures, what are the plans, what are the partnerships that are needed to achieve those objectives? I would put a “potentially” in front of that, because potentially we have a better basis for achieving, but there are probably some tweaks that can be made to the Bill during its passage. Implementation, and how everyone works together on achieving the outcomes, is also important.

The transparency mechanism that was inserted into the Bill between its first and second iterations is helpful, because it allows proper, transparent consideration of whether we are doing something that regresses and how we look compared with international standards. That is a useful way of driving transparency within Parliament about what is happening. Clearly, the Government have moved quite a distance on this. We are driving from the private sector perspective to try to make all of this work and support the direction of the Bill. We are doing it in hope, to some extent.

Q On a related point, do you think it is important to have an equivalent governance framework to the OEP in Scotland and Wales? Northern Ireland is already committed to joining the OEP, as is set out in the Bill. The other two have close liaison with all the teams and countries, but at the moment they have said they are going to set up their own bodies. How important is it, from a business point of view, that they function in as similar way as possible?

Martin Baxter: In terms of functioning, the really important thing is common standards driving common outcomes. Businesses are working across the UK and beyond, so having a harmonised approach to the environmental outcomes we are looking to achieve is very important.

In terms of the governance mechanisms, the Scottish Government announced last week that they were looking to create an independent body and watchdog. For Northern Ireland, there are obviously the provisions in the Bill. Wales is perhaps on a slightly different track at the moment. I am not entirely sure where it is in terms of an independent body.

There is clearly an opportunity to drive efficiency by having a common framework, maybe for an overarching view. Yes, I agree with common governance frameworks and ensuring that there is co-operation and collaboration, so that where we have shared environments, such as shared catchments, we are managing those and setting targets and objectives for improvement on a common basis. That is very important.

I also think there is the potential within the UK that, if we start to set different standards, we will shift burdens from one place to another. If you end up with very different policies on waste, for example, you might end up shipping waste from one part of the UK to the other, just because it happens to be easier or cheaper. Those overarching mechanisms of co-operation and collaboration are very important.

Q Good morning, gentlemen. The Bill is generally recognised as having some good bits, on recycling materials and end-of-life concerns about materials in the part on waste and resources, but it has been widely criticised because it concentrates on those particular elements of the waste hierarchy rather than looking at ways in which the waste hierarchy could be driven up, as reflected in the waste and resources White Paper. Do you have any views on that? Do you think that there are any ways in which the Bill could be strengthened to emphasise the point that, actually, recycling is not the end of the road, as far as waste is concerned, and that other things—reuse, redesign and minimisation—have an equally important part to play?

Martin Curtois: In terms of the Bill, the resources and waste strategy that DEFRA devised is very strong—you are absolutely right—because what it does, in a number of different ways, is try to improve the whole process. It incorporates things such as “polluter pays”, so it puts the onus on manufacturers to design better. The inclusion of modulated fees in the extended producer responsibility puts a clear onus on manufacturers and producers to design for recyclability, and that will ultimately reduce waste, which is what we all want. Obviously, it involves elements including better segregation, for example, of food waste, which should reduce the carbon impact. It talks about taking the burden away from local authorities and putting it more on manufacturers.

You are therefore absolutely right to say that that is a strong element of the Bill, but I think possibly there should also be other things. As you say, at the top of the hierarchy are elements such as reuse. We operate many sites across the UK where we have voluntary arrangements, for example in Southwark with the British Heart Foundation, where there are various items that can be reused and that is done for charitable benefit. It may be that that ought to be looked at, possibly in the detail of the Bill, just to see where it can be done, because obviously it ultimately is the best way forward. It should at least get some consideration, because everything focused around the resources and waste strategy is primarily, as you say, on the recycling side. There is not much emphasis on residual waste, which obviously we need to avoid because we need to avoid landfill. I therefore think there could be some consideration in terms of reuse.

I also think that one of the best ways in which you can reduce waste right at the outset is by designing better. The Bill reflects that element of the resources and waste strategy, which we see in a very positive way, because so many manufacturers and producers have come to our site—some from not far away in south-east London—to see how they can design their products with perhaps less composites, in a better way, which will ensure that they are at least recyclable at the outset. That is the very start of the process, which we have to get right if we are to make significant change.

Q Clause 52, in the context of recycling and minimisation of waste, provides for charges for single-use plastic items. Do you think this clause clarifies its purpose sufficiently? Is it about minimising single-use items, or is it about reducing the role of plastic in single-use items? First, do you think that a clause such as this would work in reducing single-use items in the food and drink industry, for example? Do you consider that it might be prudent to concentrate on the fact that single-use items can be made of more things than plastic and that amendments to the Bill might make that clear in terms of how the single-use environment might develop?

Q Mr Bellamy clearly highlighted the legal requirements already in place on a lot of waste and recycling issues. There is the waste strategy, which has the reuse, recycle, longer-life element to it, which is very strong. Will you give us business’s point of view on how the Bill will move us towards what we call the circular economy? What opportunities will that provide for businesses in particular? Maybe you could give special thought to the Bill aligning all local authority recycling collection services across the country. What sort of opportunities might that, among other measures, offer businesses?

Sorry about that.

David Bellamy: Clearly, the powers in the Bill on extended producer responsibility, introducing a deposit return system and collection consistency—provided these systems are developed holistically together, and are joined up—will, combined, revolutionise our recycling system in the UK. As I say, we need to be mindful of unintended consequences. That is why they need to be developed holistically: so we have a coherent system.

Consistency is an essential piece of this jigsaw that we do not want overlooked in taking these reforms forward. If producers are asked, for example, to label their packaging as either recyclable or non-recyclable in a binary system, it is vital that we bring the public with us on that journey. The collection system needs to be in line with that change, and consistency will need to be in place, ready, in time for this new producer responsibility system. That is vital for the FDF and its members. We support that approach.

We would also like a very early signal from Government that they plan to include plastic film in that core set of materials, for consistency. We may even be able to accelerate that faster than the work of the UK plastics pact, which I think is looking at 2025. We may be able to do that sooner with the right co-operation in the chain. We would like to be ambitious in that regard. By that, we mean mono-material and multi-material films, and we include cartons in that aspiration as well. We would like the Government to be more ambitious on that. Let’s get this right from the start, so the local authorities have the right signals from Government about the consistency in the core set of materials, and develop the infrastructure accordingly from the outset. That is very important to us.

I mentioned earlier that it is important that all the money raised by producers in this new system goes towards improving the system. That is why we have separate issues with the plastics tax; it does not adhere to that principle, because we have a policy of non-hypothecation in the UK. We are not in support of a plastics tax; we are in support of reforming the producer responsibility system through a few modulated fees, which would then be used to improve the system.

One specific issue we have is the exponential cost our members face in buying the packaging recovery notes. You may be aware that these prices have gone up exponentially over the past year or so for plastics and aluminium. There is no evidence that this additional money—our members are paying hundreds of millions of extra pounds in these costs—is going towards improving the recycling system. We are happy to pay the extra money, but we want to see the improvements in the system. We would like a meeting with the Minister as soon as can be arranged to discuss a range of options that we have set out in a written submission to Government about things that can be done in the shorter term to address this PRN crisis, as we regard it, within our membership. We would like the Minister to reconsider our request to have that meeting as soon as possible.

Q I want to follow up on the Minister’s question about a more collaborative, joined-up approach. Obviously, Andrew, local authorities will be your key partners, and you touched on small businesses and the challenges that they may face. Can you go into detail about your resourcing, and the support needed to deliver on the recycling targets?

Andrew Poole: Businesses do not have access to waste collection services provided by local authorities, which means that they have to arrange the collections themselves. That incurs a cost, but one thing that is often overlooked is the opportunity cost for small businesses; the issue is not so much the waste collection service itself. How do you identify a trustworthy waste collector? How do you know what they are doing with that waste? Do they provide all the different types of recycling that you need? Will that come at an additional cost? Do they collect on the right days, when you need it? All of those things that businesses need to think about could be made easier. Giving them access to more domestic-focused waste collection would be one way of looking at that for certain businesses below a certain threshold.

Another thing is pragmatism. If you are talking about a deposit and return scheme, for instance, with which many of our businesses will be involved, do they have the space to do it? Is there practically and pragmatically enough space? Those issues could easily be got over, but they need to be thought about. It comes back to the theme of what we can do, within the existing infrastructure, to make it easier for businesses to comply, even before we start to think about what new things are required. A lot of things could be done today to make it easier for businesses to recycle more, in particular.

Martin Curtois: Owing to the emphasis in the resources and waste strategy on domestic infrastructure and building facilities here, so that we can treat our waste and recycling within the UK, the industry estimates that there is a £10 billion business opportunity for investment in the UK, because there are gaps in regional infrastructure. It is important that we treat as much of both our recyclate and residual waste as possible in the UK. To be honest, some of the borders are closing in terms of waste being treated overseas in northern Europe. Obviously there is public demand for more plastic reprocessing in the UK, because that is best from an environmental point of view. That is really important.

Consistent collections will make things easier for households, because whatever part of the country you are in, you will essentially have the choice to recycle paper and card; plastic bottles; pots, tubs and trays, which at the moment many councils do not recycle; and steels and aluminium. There will also be separate glass and food waste. That will make it easier to recycle and easier, to be frank, to generate revenue from those materials, because they are collected separately. You can imagine that for the anaerobic digestion industry, separate food waste will be beneficial—or if it is food and green, that is used for in-vessel composting. There is a logic in that.

As for individual businesses, as my fellow witnesses will know, there will be mandatory collection of food waste above a certain limit. That is another good way to reduce carbon impact. In terms of the commercial collection schemes that we run, sometimes you can have economies of scale if you collect within a certain commercial trading estate and offer a service to all businesses within that estate. The obvious point, which really I should have made at the start, is that everyone thinks about municipal recycling and what everyone leaves outside their property, but business recycling is just as, if not more, important; there might be more waste involved. Anything we can do to simplify the system for businesses, so that it is less onerous and allows us to reduce our carbon impact quicker, has to be the right move.

Q We have talked a little bit about recycling this morning, but I am interested in the steps taken by the food and drink industry and the small business sector to reduce the use of plastics. From your perspective, what are the unintended consequences of reducing plastic use, and how will the Bill support you with those unintended consequences?

David Bellamy: On reducing plastic use, there is a presumption there that plastic can be substituted by equivalent materials; that is the challenge. Obviously the industry is happy to look at alternative materials, but they must provide that equivalent functionality. Plastic is a very efficient material for getting products through the supply chain. The issue really is plastic waste, not plastic per se. An element of responsible disposal comes into this discussion as well.

We support the work of the UK plastics pact, which looks at not only phasing out non-essential plastic items, but how we can make plastic more recyclable, compostable or reusable, and generally reducing that waste. This is a combination of things, and looking at potential alternatives to plastic, where there are equivalent materials that provide equivalent functionality. We must not end up with unintended consequences, either for food safety or for food waste. It is about finding that sweet spot and functionality.

Also, we need to look at how we improve plastics as they are used now, perhaps moving towards alternative types of plastic and looking at how we can increase the recyclability of existing formats. There is not a one-size-fits-all approach; it has to be evaluated in the round, and we have to make sure we do not move to unintended consequences. Also, we need to keep focused on the fact that plastics per se are not the issue; it is plastic waste. It is about keeping plastics in the circular economy and out of the environment. The measures in the Bill to give producers full responsibility for the system, at full cost, will make it a lot easier to deliver change.

Andrew Poole: I back up what David said. On the unintended consequences, it is worth looking at associated opportunity costs. Presumably one of the unintended consequences relates to not putting businesses out of business. Coming back to the point about carrier bags, a cost was put on bags, and the business community as a whole welcomed that, but one issue was really hard to communicate, it seemed. It was not that businesses did not want to charge for the plastic, because they could manage that; they could swap and do alternatives. However, one unintended consequence, particularly for smaller retailers, was the reporting requirements on top. We need to look underneath the physical changes that the businesses have to make, and examine the bureaucracy that underpins those changes, such as any onerous reporting burden that is not balanced or proportionate. That is often quite hidden, but so often, the opportunity cost for businesses outweighs the up-front cost.

Martin Curtois: Most major brands have focus groups based on consumers—you and me—and there has been a significant change in how brands are responding to the issue of sustainability, because they understand that the public get it and want us to improve environmental performance. We can see that in supermarkets: we now have refill options, which are great ways to encourage reuse and reduce waste from the outset.

We have agreed on most things so far. However, from a reprocessor’s point of view, the great benefit that I see arising from a plastics tax that insists that products contain 30% recycled content is that it gives certainty to invest in more plastics reprocessing facilities. That will ultimately mean that the plastic is more sustainable at the outset, because you are using less virgin plastic and more recycled content. Before this Bill has even come on to the statute book, brands that always thought of sustainability as a nice-to-have—likely with a small financial incentive as well—now think of it as a must-have. That is significant and positive, because it will mean we are getting it right at the start of the process, which reduces the carbon impact.

It has even been shown through research that if the public are offered a water bottle with clearly labelled recycled content that costs £1.24, as opposed to a bottle without it that costs £1.20, they will pay the little bit extra to have a sustainable container. We have to make sure we exert the influence that the public want us to have when it comes to performing better in this area.

Q I will speak to two areas. First, when I engage with people in both the food and drink industry and the waste compressing industry, one issue is the lack of reprocessing facilities, but the second—and usually more important—issue is the quality of the bales of material. When they show me a bale from France and a bale from the UK, the French bales are much cleaner than the UK ones. Are the provisions in the Bill going to improve that so we can have better recycling?

Secondly, you alluded to the market in waste pushing up the cost of these bales, which is a disincentive to invest in reprocessing. Do you think that the provisions in this Bill will pull that back? As an adjunct, there is the issue of transfrontier shipments of waste—that is, waste being sold overseas. Again, do you think the provisions in this Bill will help us end that practice and engage in reprocessing in order to create a circular economy in the UK?

Martin Curtois: There are a couple of elements that we have to bear in mind. First, due to the changes in China and many other markets, the emphasis in those countries is on a race to the top. They are insisting on premium quality, and if we provide premium-quality bales it is much easier to have a market, so the way that has changed has actually been beneficial to some extent. Also, the overall value of these commodities has fallen, as with many others, so it is even more important that the product you are producing is of a premium quality. It is very important that we get that right at the start.

The Bill’s emphasis on encouraging more investment within the UK was one of the very clear signals that was outlined in the strategy. To give you an example, with plastic pots, tubs and trays, it is currently inconsistent. Part of that is that they are of little value as things currently stand, but if they were being collected separately under a formalised approach, it would be easier to generate value from them. That is the case with all elements of recycling. If you can collect clean product—this is why DRS may be advantageous as well—in sufficient quantity, it is easier to make a high-grade product for reprocessing.

There are a number of principles within the Bill that are pointing us in the right direction. From the sector as a whole, if the Bill becomes a reality and, as a result, we make it easier for the reprocessors to produce a good product, and if they have confirmation that the legislation is there and they are not investing in something that, 10 years down the line, will no longer be a Government priority, the money is there to go in. There is a benefit to the UK economy as a whole, because these facilities are needed throughout the UK. It is just where people are and where the waste is, so there can be a knock-on benefit nationally to the economy.

David Bellamy: On the issue of quality, the powers in the Bill around EPR reform will help the situation. They will change the dynamic, in the sense that producers will be in the driving seat in terms of how payments are made to local authorities for collection. Those payments will only be handed over against agreed quality standards, so there will be a much bigger drive towards quality collections, which is what we need. Combined with the consistency approach, that will help the situation considerably.

We have also not mentioned the DRS, which will also help the quality of collections as far as particularly polyethylene terephthalate plastics in drinks bottles are concerned. That will also have a positive impact on quality. There is still an issue, as I suggested earlier, about the option of the industry working more with Government to develop quality standards and ex-MRF for bales and such. In many places on the continent, they have much higher standards for accepting materials, and we ought to be doing something similar here.

Q I am interested to see that the Bill provides a balance between the detail and the direction of travel. My question is to do with how much of a carrot or stick approach the industry needs from Government. The industry has come on in leaps and bounds in this direction in recent years, but in terms of consistent labelling and practices between different local authorities, how much of a stick or carrot approach do you think the industry needs from Government? Or is industry able to take charge on this?

Martin Curtois: Consistency of labelling could be one of the most significant changes in the right direction. At the moment you have this awful phrase, “widely recyclable”, and no one knows what it means. It could apply to one local authority and not to another. We would advocate literally a simplified traffic light system, whereby green is recyclable and red is not. I think the shock, for a retailer or producer, of having a red dot on its packaging would be such that it would want to avoid it. At a stroke, you would be improving recyclability straightaway.

That is one key element of it. It also drives people mad that they just do not know whether a product is recyclable or not, so you would get an improvement not only at the front end in terms of the manufacturers’ production, but in the materials we receive at the processing facilities. As you can imagine, we receive thousands of tonnes of materials a year. Anything that can be done to ensure that people are sorting it more efficiently at the outset will make our job of reprocessing it more straightforward.

Andrew Poole: For me and for small businesses, a lot of this legislation is generally about trust. The problem is that, if we do not get these things in place, everyone knows that the stick will come. There is an opportunity at the moment to be on the front foot. A lot of our engagement around the Bill has been about keeping businesses on the front foot and steering the legislation in a way that is beneficial to everyone. It is a case of giving all of these things a consistent approach, including labelling, for example. It is about trust in the outcomes of the legislation, and about making the right decisions. It is about trusting what they can see and seeing that the decisions are the right ones. It is important to have that transparency around the whole Bill.

Q Mr Poole, you spoke a lot about trust and transparency, and the Bill has a careful balance between detail and direction, but a lot of details will be prescribed through secondary legislation. I just wanted to garner your opinions on the importance of public consultation, so that we can garner expert views to develop detailed policies through secondary legislation.

Andrew Poole: I come back to the point I keep making, which is that small businesses are signed up to this—in the broad concept. They want to do the right thing for the environment. They are human beings. What is increasingly important is that they want to demonstrate to their customers that they are doing the right thing. They are aligned with the broad concept of the Bill.

When it comes to those granular details, that is obviously what is going to make or break the Bill. Government must see small businesses as a partner for delivery at every stage where those decision have to be made. I suggest that the outcomes of this Bill will not be achieved without a fully engaged small business community playing a very active role in it. It is a plea to policy makers and legislators that small business views are taken into account fully when those decisions get made, at each stage.

Q Can I come back, Mr Curtois, to your earlier point that you thought there was masses in the Bill in terms of recycling, but less on residual waste and how that should be treated. What would you hope to see in the Bill that would cover that?

Martin Curtois: The situation in the UK in terms of residual waste is that it is virtually impossible to export refuse-derived fuel now in a viable way, because particularly in mainland Europe the cost of that is making it prohibitive. For obvious reasons, landfill is at the bottom of the waste hierarchy, and from what I can see from the resources and waste strategy the overall aim is to prevent waste where possible, recycle more and landfill next to nothing.

So we have got to recognise that even though recycling will hopefully continue to go up—ultimately I think the aim is to get, possibly, to 65%—there is something that has not yet really been covered in depth in the resources and waste strategy, which is that we need to do something with the residual waste. We operate 10 energy recovery facilities within the UK, three of which have district heating. Bearing in mind the plans that the Department for Business, Energy and Industrial Strategy has for a heat road map, which I think is proposed for June, there is a role, which we need at least to recognise, for energy recovery, preferably with heat decarbonisation.

We are addressing the issue that the waste has to go somewhere. The landfills are running out. Therefore we need to do something with it that will also help us with generating electricity, given the fact that there will be even more intense pressure on the grid because of the number of electric cars that we obviously hope for, to reduce our carbon impact. There should be at least some recognition that it is an important component of the overall mix.

Q Can I ask Mr Bellamy a separate question? It is really about your members and their attitudes to eliminating avoidable waste of all kinds. Do you think the introduction of charges for any single-use plastic item will incentivise a shift towards the direction that the Government want to go in, or do you think your members will resist that?

David Bellamy: The question of avoidable waste is a little bit open to interpretation, in our estimation. It may warrant a definition in the Bill. We suggest that that material might not be recoverable in any shape or form, or it might not be replaceable by something else.

Q Would you support the traffic light system, which clearly identifies for every consumer exactly which bit of plastic can be recycled and which cannot?

David Bellamy: We support a binary labelling system to that effect. We have not looked at a traffic light scheme as such. The current proposal is more of a descriptor-based labelling system, which basically says that something can or cannot be recycled. We strongly support the concept of a binary system.

Q Andrew, can your members respond to the challenge with the speed that is needed to achieve these net carbon targets?

Andrew Poole: The truth is that some will, and some will not. We have tried to highlight, across the piece, in terms of these environmental challenges, the requirement to understand the business audience in more detail. Small businesses are very different. There are myriad different types of organisation. We consistently challenge policy makers on that requirement to understand in more detail the business audience that is being affected. If there are any requirements or opportunities to provide support to small businesses, that support should be targeted to those businesses that are least able to adapt. The more time that businesses are given to adapt and change the way they do things, the more likely they are to achieve those changes.

In one way—

Q Thank you. I will be very quick. I want to return briefly to the issue of public consultation. How important will that be in determining the type of deposit return scheme that would be delivered by the Bill through the secondary legislation that it will bring in?

Martin Curtois: I believe that in Scotland, they are planning to go for an all-in deposit return scheme in April 2021. We will see how that works in practice. It seems that in Scotland they have decided that is the way they will go. It will be interesting—because they have proposed an all-in scheme rather than an on-the-go scheme—to see whether they can cope with the number of materials that will involve, as far as a DRS is concerned.

There was, perhaps, some merit to an on-the-go scheme. It would perhaps have had the advantage of primarily focusing on the plastic bottles and cans that are collected, which currently go into high street refuse bins and are virtually unsorted. We could go from 60% to 95% recycling of plastic bottles, if we have an on-the-go system that works and that focuses strictly on the bottles and the cans. It will be interesting to see what happens in Scotland and how that evolves. That will be the biggest and best test.