Motion to Take Note

– in the House of Lords at 11:32 am on 12th December 2008.

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Moved By Lord O'Neill of Clackmannan

That this House takes note of the Report of the Science and Technology Committee on Waste Reduction. (6th report, Session 2007—08, HL Paper 163).

Photo of Lord O'Neill of Clackmannan Lord O'Neill of Clackmannan Labour 11:36 am, 12th December 2008

My Lords, I start by thanking my colleagues for giving me the opportunity of chairing this most interesting and useful study. As one who spent the past 10 years of my time in the other place chairing a Select Committee, it was quite illuminating to compare and contrast the experience of one House against the other. However, I realise that time is the thing that I must not waste today, so I will not carry on in that vein any longer.

It would be inappropriate of me not to thank our special adviser, Professor Evans, and the Clerk, Sarah Jones, for the way in which they enabled us to conduct our business and the manner in which the report was produced. Any criticisms that people may have of what is said here today should not reflect on anything that appeared as a result of their efforts because we are most grateful to both of them.

From the outset, the committee was quite clear about what it wanted to concern itself with. We did not want to concern ourselves with questions relating to domestic waste mainly because we would have drifted into cul-de-sacs out of which we would never have escaped. Equally, the fact is that domestic waste, although it takes up an inordinate amount of people's attention, accounts for only 10 or 11 per cent of the total waste of the UK. It was also more important that we got across that we were more concerned with the better utilisation of scarce raw materials and, when appropriate, the recycling of those materials, and the reuse of components through better and more thoughtful design. In due course, that should lead to a reduction in the needless discarding of so much of the equipment we use at present.

We took as our starting point the inverted pyramid which we have in our report showing the waste hierarchy. Those five points need to be stressed at the beginning: prevention, reuse, recycling, recovery and disposal. The last option should be disposal. We wanted to ensure that the last four were given an enhanced profile. Our approach was to look at waste in context, the quality of nationally gathered statistics, waste-related legislation, mainly emanating from Brussels. We went on to consider issues relating to design, innovation and technology. We examined the application of those areas in manufacturing, construction and the wider economy. We sought to establish the consumer perspective because we were conscious that, as a society, we were drifting towards disposability being the first option rather than the last.

We also wanted to see to what extent business could use waste reduction as an opportunity for enhanced activity rather than a burden. Finally, we wanted to see what the Government could do to give a lead in these matters. Obviously, so much of what we are talking about is within the framework of legislation, albeit legislation over which we do not necessarily have much control as it is European in character. However, it is the Government's responsibility to present that legislation and enable us to send out clear messages to the consumer, producers, business and the community at large.

I shall look at each of these briefly, because I know that colleagues will want to specialise in particular areas. My starting point is the definition of sustainability that we adopted in the report, as coined by the Brundtland Commission in 1987, which said that sustainable development,

"must meet the needs of the present without compromising the ability of future generations to meet their own needs".

As I used to learn at Sunday school: that is the text for today. We were quickly exposed to concepts such as the "zero-waste society", which is rather a zingy title but, when set against reality, is rather more than just an aspiration. We do not need to be too concerned about that.

We have seen in recent years that we are vulnerable as an economy, as a country and as a planet to dramatic surges in economic activity. We have seen in the past decade the Indian and Chinese economies consuming far more of the world's resources, and sometimes doing so in a profligate manner of which we would be well advised to be careful. However, it is not for us, who have been squandering resources since at least the start of the Industrial Revolution 250 years ago, to lecture other countries, but to try to set examples.

In this report, we have tried to see what best practice exists internationally, how legislation and regulations can impact on that and where our aspirations can lead us. To do so, we need evidence-driven information and to make recommendations based on high quality data. One of our first disappointments was that the quality of the data left a lot to be desired, and will probably leave even more to be desired in the near future in so far as we see the budgets for data collection being cut. We are not happy with the nature of the response to that, which I shall address again in a minute or two.

We were concerned not only that we get good information, but that we are able to design equipment to make use of materials in such a way that we can take advantage of what is happening elsewhere, or what our own research facilities are offering. We were impressed by De Montfort University's resource-efficient design initiative, which covered a number of areas. We were able to see, for example, "Design for Disassembly", which sounds a bit like an oxymoron but basically means that we design a motor car in such a way that it can be dismantled very easily and quickly. The components can then be made available for recycling where appropriate, or can be disposed of quite efficiently. When we visited the Toyota European headquarters and saw a film of them dismantling a Toyota car, I, as the owner of another Toyota, was a wee bit disturbed by the ease with which it seemed our trusty cars could be taken to bits.

The point is clear. When we are talking about design for disassembly, we are talking about making it that much easier to take it apart. Equally, product light-weighting—we have to use terrible jargon, because that is the language in which these people speak—takes account of the need to reduce packaging. It is fair to say that the committee was not convinced that enough was being done, for example, to reduce the packaging on chocolate Easter eggs. You get hobby horses in all committees, but that was an issue that some of us identified.

Seriously, we were also impressed by the retailers who made the point that some food packaging could extend shelf life, particularly that of fruit and vegetables. However, we were not satisfied by some of the arguments put forward about sell-by dating procedures employed by retailers, which seemed to be as much about sustaining cash flow as food safety.

We also found that the glass and aluminium industries were concerned about weight-related matters. Aluminium suffers because it is in some ways too light. It is less attractive as a result, and more difficult to separate from other metals. It was estimated that something like 90,000 tons per annum that could be recycled were lost. The point about aluminium recycling is that it operates at 100 per cent: you get out what you put in, less the energy cost involved. However, there is currently a sizeable loss. Equally, with glass, we consumers put our green bottles into one box and our brown bottles into another. These boxes are collected by a company that puts everything back together again, in the interests of convenience. We lose the prospect of quite a lot of recycling there.

We were impressed by the approach of many companies, in a diverse range of activities, to meeting the challenge of sustainable design. However, far higher priority must be given to education and training in design. Within the curriculum there must be a design component taking account of the ambitions for sustainability. Equally, so much of the waste reduction is driven by legislation that we must get a component in design courses drawing students' attention to the regulatory framework in which they will work when they graduate. I am not a lawyer. Any courses that I did at university with a legal component bored the pants off me. However, people are now working in the kind of regulatory frameworks where this is essential. We get the impression that there is quite a lot going on in academia, and there are some good examples, but there are also twilight zones where far more needs to be done.

We were also impressed by what was happening with knowledge transfer, but were concerned that the Government should be doing more to support sustainable design components. We were not assured by their reply to this point. We did not get the feeling that they properly appreciated the need for ring-fencing of the funding of a number of these areas. Things could be fudged and moved. Ultimately, technology transfer will only really be tested by the influence it has on the wider economy. Certainly, the impact is still fairly limited. However, the adoption of waste reduction techniques is made harder by the lack of accounting methodologies to enable businesses to measure their effectiveness. We recognise that ISO 14001 is a useful benchmark of sustainable practices, but we were not convinced that there was much of an incentive for businesses to continue to improve their performance once they achieved that level. The Government responded that they had stressed the need for continuous improvement. However, we felt that another route could be taken to promote continuous improvement; namely, through the development of a publicly available specification (PAS 2050). We would appreciate receiving a clearer statement from the Government on the methodologies referred to in their reply to our Recommendation 6 on this matter.

We are also conscious of a number of barriers to waste reduction in the shape of downstream factors. Local authorities are often the whipping boys in this respect, but they must once again take a wee bit of punishment here. They have a mixed record. Some are constrained by size, being too small to have the capital to purchase equipment. Many of them join consortia to achieve economies of scale. However, a lot still needs to be done in that regard. They are allowed too much freedom to define objectives in their own idiosyncratic ways rather than having a national standard to which they could aspire. There are problems around weight-based definitions. If they go for weight, they do not necessarily go for quality. One thinks of Stalinist steel production figures in connection with waste reduction. Greater attention should be given to the plight of local authorities but they also need more guidance.

Some of the questions of definition are being addressed by the waste framework directive, but there are problems even there as regards when waste ceases to be waste. The construction industry is subject to a lot of criticism as regards the "waste" definition of materials leaving a site. Insufficient attention is paid to the recyclability of components after demolition has taken place; for example, fancy fireplaces or stone that could be reused. As regards extended producer responsibility regulations—that is, whether you should have a national or an international industry standard or whether individual companies should assume responsibility for the standards—we should note that the end-of-life vehicles directive has been a success. The industry set up ISO 22628 to assess the ability to recycle or to recover elements of vehicles. A lot of work has been done in that regard. Unfortunately, the DVLA has let everybody down by having a half-baked destruction certification system, which means that not all cars have to be submitted for the relevant process. If they are abandoned, or nobody knows who owns the car—as subterfuge has been adopted—and who is to blame for it being abandoned, it is not necessarily subject to dismantling. Therefore, this measure has been partly successful. Some cynics might say that it was going to happen anyway and that it was in companies' interest to adopt it, but certainly the car industry can derive a degree of satisfaction from the measure. Giving responsibility for the measure to an individual company as opposed to an industry has been tried in Japan. The Japanese adopted a different approach. It has been successful but that is because the Japanese retailing system and organisation are rather different from our own.

I am conscious that my allotted time is almost up but I do not want to leave out landfill tax. This is the real curate's egg. Some argue that it should be increased; others say that it is too high. That suggests that it is probably about right. It is interesting to note the European experience. In Europe, countries with a high landfill tax tend to have relatively low levels of landfill and high levels of incineration. The UK rarely takes up the incineration option due to local opposition. We should like to see a far clearer definition of landfill tax. The decision to abandon hypothecation is dangerous. It will deny resources to a number of areas where we would have hoped that the good practice which has been established would have been maintained. The Government's view is that good practice has been established, they have shown the way, and they will now cut back on the budget and get the thing done more cheaply. That is very shortsighted. It is also fair to say that organisations such as Envirowise, the Market Transformation Programme, the National Industrial Symbiosis Programme and WRAP all deserve continuing support. We are disappointed at Defra's response. We understand that it has had burdens imposed on it due to other difficulties, but I do not think that the waste handling industry or the objectives of trying to secure better treatment of waste should necessarily be the casualty of past foot and mouth foul-ups. We shall want to talk to officials about some of our recommendations to which they have not given satisfactory answers.

This was a useful exercise. We are very pleased that we were able to address an issue which in many respects has not been looked at before. We were relieved that some of the people to whom we spoke were pleased that we were doing this because there is nothing worse than conducting a Select Committee inquiry when people are moaning because you are doing it. We had a good response. The committee worked well. We have come up with a realistic set of objectives. I say "realistic" in the sense that we are not in any way trying to wish for the moon and the stars. Therefore, it is sometimes all the more disappointing that the Government have not been quite as constructive in their response as we would have wished. However, we continue to hope.

The test of a Select Committee's recommendations is not three months after the report is produced, but 30 months afterwards. I am always reminded of the words of George Bernard Shaw, who said of his father that at the age of 18 he was probably the most ignorant man he had ever met but that by the time he was 21 he was surprised how much he had learnt. Sometimes Governments go through that process as well.

Photo of The Earl of Selborne The Earl of Selborne Conservative 11:59 am, 12th December 2008

My Lords, the whole House will be grateful to the noble Lord, Lord O'Neill of Clackmannan, for the very skilful way in which he chaired our inquiry and, indeed, for the way in which he presented this timely report today. He is absolutely right to say that we were very well served by our specialist adviser, Professor Evans, and our Clerk, Miss Sarah Jones. I join in paying tribute to them both.

As the noble Lord reminded us, when we look at waste we tend to give far too much attention to domestic waste, which represents only about 10 per cent of waste. We can make an impact as regards demolition and construction waste, which represents about a third of waste, or mining and quarrying waste, which represents about another 30 per cent, or industrial waste at 13 per cent of the total.

In the demolition and construction industry, two clear initiatives are needed, with leadership and co-ordination from government and from the industry. First, on design, we should look at the amount of materials that are taken on to a building site and the amount of waste that emanates from those materials because of a lack of co-ordination between the trades. It is particularly reprehensible to have waste simply because the bureaucracy created by myriad legal rulings and the waste framework directive, which has now been revised, means that waste has to be handled through a lot of permits and the like. We heard what was a perfectly fair whinge from any number of people, who said that they could make much better use of raw materials, if only the definitions were more user-friendly, both for the producer and the consumer.

I was very impressed when we visited Belgium, particularly Flanders, which has done something that we do not seem able to do; that is, effectively to co-ordinate the handling of domestic and industrial waste. Perhaps by accident, we have locked ourselves in to local authorities each choosing their own contractors to handle waste, very often with completely different contractors alongside each other. They lack critical mass. It is very difficult for, say, a national designer of a product to be able to ensure that this is handled consistently throughout the country, when there are completely different objectives from the local authorities, and the local authorities are working separately from the industrial waste contractors. Co-ordination is needed, and leadership is clearly the role of government.

The incentive of the waste management companies is all on weight, which is to the detriment of light, valuable materials such as aluminium, to which the noble Lord, Lord O'Neill, drew our attention. It is a great confession of failure that we use twice as much new aluminium as old aluminium. We are just not recycling efficiently. Local authorities have no incentive to co-ordinate with the industrial sector. The moment that they take responsibility for waste, they are subject to the landfill allowance trading scheme, known as LATS. Once they then fail to achieve their landfill allowance trading scheme targets, they are penalised. Inevitably, there is a disincentive to handle that waste; exactly what is not required. Yet the government response to our report says that the LATS is "working well" and that it is,

"a crucial scheme to ensure compliance with the landfill directive".

I accept that the LATS may be crucial, but it is not working well. In other parts of mainland Europe, the LATS apply to the industrial sector as well as to local authorities. Surely the first and most obvious thing to be resolved is how local authorities can be encouraged, not disincentivised, to produce a co-ordinated approach to waste handling through all waste streams, particularly industrial, building and construction waste, which is, after all, the main part of the problem.

We call for joint waste authorities, but they must be more than authorities concerned with the co-ordinated collection, treatment and disposal of waste. We are talking about raw materials which are the by-products of the source of material for relevant industries. They are providers of raw materials for a wide range of industries. Here, we come back to the problem of the definition of waste, which has been a highly contentious issue since 1975. When the waste framework directive was originally drafted, it was absolutely clear that it was extremely tightly drawn, and legal case after legal case has tried to interpret what is meant by "waste". There is a great reluctance now for agencies such as the Environment Agency in the United Kingdom, or other regulators, to go through a lot of attrition to at least establish what is meant by "waste" and what permits are required, upsetting these legal rulings. It has been trying to make sense of an extremely expensive and wasteful misuse of these raw materials coming out of the waste stream.

At least now we have some definition of "end-of-waste" in the revised directive. Previously, the waste directive was silent on that issue. Some 30 years after the framework directive was originally formulated, the Environment Agency is producing protocols to help industry to determine how to handle materials that can be reused by business without the need for waste management controls. It would be churlish not to say that these protocols, after all these years, are helpful, regarding products such as cooking oil, compost and the like. There are also some manuals of regulatory position statements on products such as wood.

Clearly, this is extremely important and helpful. It gives some guidance to industry on how to get through this plethora of regulation. I am simply mystified why it has taken 30 years to give this guidance. I would go further. I agree with Professor Grimes, who is quoted in paragraph 4.42 of our report. She suggested that,

"waste should only be material destined for final disposal", and that,

"anything that can be re-used or recycled should be defined as a non-waste by-product".

The revisions agreed to the framework directive by the European Parliament and the Council of Ministers are a modest start. At least we now know when waste ceases to be waste, when it can be reused, and the status of some by-products. We wait still for the Joint Research Centre in Seville to undertake what is described as "preparatory work" for new criteria for the waste stream. I groan when I read that, because it is clearly going to be some more years until final elucidation is given on these matters.

As the noble Lord, Lord O'Neill, reported, we went to see Toyota in Belgium, which is one of the most impressive companies in Europe in how it handles waste and how it encourages its suppliers to put in place protocols for reducing waste. It would say that, of the obstacles that it finds the most challenging, it is the question of legal definitions of waste and differing legislation between countries. I clearly favour a harmonised EU waste directive, but I fear that we have some way to go before the revised directive is fit for purpose.

Photo of Lord Whitty Lord Whitty Labour 12:08 pm, 12th December 2008

My Lords, I, too, very much welcome the report, and I congratulate my noble friend Lord O'Neill and the committee on producing it, and particularly on the systemic approach that it took to the waste stream, taking it back to the design stage.

I shall focus on four points; first, government policy of various sorts, and, secondly, the whole issue of waste streams, particularly the point that the noble Earl, Lord Selborne, just referred to, on how we can change waste into raw materials and into feedstock, both in legal and definitional terms and in process management. Thirdly, I shall touch on consumer behaviour in this area and, fourthly, on recycling markets, both domestic and international.

I declare two interests; I am the chair of Consumer Focus, and I am a member of the Environment Agency board. I am, therefore, personally deeply conflicted regarding the differing demands of the consumer interest and of sustainability in this field. We strive to reconcile those as regards government and consumer representation.

On government policy, I know that there has been some hesitation about the effectiveness of the targets and the landfill tax in relation to the leverage that the Government have already used. The report is certainly correct to say that huge attention has been given to municipal waste, mainly household waste, and relatively little attention given to industrial and commercial waste, which is far greater in quantity and more difficult to dispose of and use effectively. We need more broadly to use the leverage that we have already developed in the municipal waste area upstream by looking at waste reduction, re-use, recycling and disposal targets, and we need also to move on from municipal to commercial and industrial waste.

That requires attention to the total waste stream. It takes us back to issues of product distribution, the production process and, as the report firmly emphasises, the design process for systems and products. I agree also with the report in that it is a little worrying that the forward expenditure by the Government on such bodies as Envirowise, WRAP and the market transformation system is extremely short-sighted. I hope that Ministers will revisit that. It also has a knock-on effect on the quality of data—as was stated in the first recommendation in the report.

I also think that the Government need to get over their inhibitions about hypothecation and the fact that the landfill tax will have reduced hypothecation, rather than more. The Treasury has taken a sort of ideological position in this area in which we are trying to change business and consumer behaviour, and where hypothecation is an enormously important part of the motivation and reward systems which make interventions effective. I therefore hope that those issues will be revisited across Whitehall.

I return to the need to address the total waste stream, where there are also significant difficulties with the regulatory framework, as the noble Earl, Lord Selborne, said. As a Defra Minister I was concerned that the regulatory requirements on waste conflicted with those that we wished to introduce to mobilise the use of waste as feedstock for biofuels, for example, and in other areas. That conflict of regulation and the subsequent legal cases to which the noble Earl referred have greatly inhibited reaching a situation whereby the waste stream can move relatively seamlessly into a stream that deals with raw materials and feedstock. I am glad to say that not only has the waste framework directive been altered to improve this, at least to some extent, but the Environment Agency in recent years has recognised this point. There are clearly safety, transport and environmental problems regarding waste taken offsite or away from industrial processes. Those issues have to be addressed and must have regulations which are properly enforced. That is why I am not sure that this can be dealt with simply by redefining much of that waste as by-products with potential for further use.

It is vital that a waste chain needs to be established which moves into the productive use of those materials. That is why the Environment Agency's work on waste streams is important, so that we can move from a system whereby waste is a cost and a hazard, to one in which it is a feedstock and a profitable raw material. As the noble Earl, Lord Selborne, said, the Environment Agency has already developed a number of protocols on, for example, waste wood and vegetable oil, and is working in further areas, including flat glass, boiler ash, plasterboard, and the residue from anaerobic digestion. That cycle will be completed when those protocols are in place, and that continuous process is very important. There is a long way to go and this area requires a superstructure of regulation to be reflected in it.

I wish to focus slightly on the energy use of waste. We have debated energy frequently in this House recently; we have focused on policy regarding renewables, nuclear energy and energy efficiency policy, but we are very coy about how we use materials that have already passed through the consumer end as a feedstock for energy. We can generate electricity by incinerating mixed wastes. There is not a huge sorting problem in many cases. We can achieve heat recovery at the same time by maximising combined heat and power, and we can use anaerobic digestion to generate electricity or produce biogas on small and medium scales. The variety of technologies available in this area are enormous and are in relatively common use in a number of European countries, but in the UK we allow ourselves the indulgence of continuing to landfill materials of high calorific value which could be used to produce energy.

There would also be, of course, an indirect effect whereby if we used similar waste materials as the raw materials for other industries, those industries would save energy. It takes three-fifths of the energy to produce a bottle from recycled glass, compared with virgin materials, simply because it needs to be held in a molten form for a significantly shorter period. That can be a huge saving for glass manufacturers and a huge saving in potential waste. These recycling processes save money and energy and we need to develop the capacity to deliver those processes to manufacturers and to develop the market for them.

The consumer is vital, and the consumer society as it has developed has dropped many aspects of reuse and recycling that were there in the 1950s. We have managed to motivate a certain degree of consumer behaviour in relation to composting and recycling, but we have not done that much in terms of reuse or reduction of household and consumer waste in total. Some of this is a regulatory issue, and some of it quasi-regulatory. My noble friend Lord O'Neill referred to sell-by dates; many food retailers, for example, use sell-by dates that are much tighter than those laid down in the regulations. However, there is not so much a regulatory need as there is a need to induce changes in consumer behaviour. That clearly applies regarding food, and although there has been some progress in reducing waste in the food processing and retail sectors, that same benefit has not been seen at the consumer end.

This is also the case in other fields where there has been regulatory intervention—the noble Lord mentioned end-of-life vehicles whereby owners of cars have not been brought into the process, except through what appears to be a bureaucratic procedure. I had similar objections to the way in which the WEEE directive was introduced; consumers were not involved or told of the implications until well after the regulation was actually enforced, and even then it was pretty haphazard and we did not provide the capacity to deal with the disposal, dismantling and recycling of much of those materials—one would have thought we would have learnt from our experience with fridges. We are still dumping electronic equipment into mainstream waste, and even when such waste is in the recycling system there is the problem of collectors actually remixing it—plus we have insufficient capacity for dealing with it.

The other consumer issue is labelling. It is vital that we do not go for a profusion of labels in the sustainability area. It may take a bit of time, but we need to work out a proper carbon labelling system which applies to a whole range of products. There is total confusion regarding the labelling of agricultural production methods, and all-out conflict over nutritional labelling, although I hope that is being resolved by the FSA and the industry. We cannot afford the same confusion and conflict over labelling for sustainability purposes, and certainly confusing consumers is far worse than not telling them anything.

My final point relates to recycling markets. There has been a good deal of panic in some of the press with comments that, because the Chinese economy is growing by only 6 per cent instead of 11 per cent, the whole market for our waste will dry up. I do not think that that is yet true but obviously some of the signals are pretty negative, and issues relating to storage and our own waste or recyclables chain in this country are important. The key point here is the quality of the chain.

Recyclates are fit for use by industry as raw materials, or at least most of them should be. The demand for such raw materials from India and China, and indeed from industries closer to home, will continue. However, because that market boomed so quickly in the past, in one sense it has let us get away with the low-grade provision of badly sorted paper and cardboard and mixed plastics. The recession is forcing us to increase the quality, but clearly in the immediate period there will be a drastic reduction in the price. However, we are talking about a commodity, and commodity prices go up and down, so in that sense these recyclable materials are no different from agricultural products. But the price will go up again, particularly if we offer these markets properly sorted, high-quality waste. For example, the market for clean recyclable material such as cardboard and particularly paper, which we sell to Sweden, is still substantially stronger than some of the lower-grade markets where we have relied on poor-quality or invalidated waste for a few bob when, if the quality were higher, we would be able to sell it at a much higher price and in a wider range of markets.

There is also the question of why we do not have high-quality waste facilities ourselves. It is easy to say that we cannot sort high-quality raw materials here because our wages are a hundred times higher than those in China and that basically this is a labour issue, but it is not necessarily a labour issue. The recovery of high-quality materials depends on capital investment, the introduction of technology in that area and the construction of a more domestic supply chain in the UK and in Europe.

There is money to be made out of muck. There always will be, and there is some pretty high-quality muck out there as a consequence of 50 years of a consumer society. We need to get businesses and consumers to change their behaviour but we also need to establish systems and changes that will enable people to make money out of waste to ensure that we minimise the amount produced in the process.

Photo of Lord Bhattacharyya Lord Bhattacharyya Labour 12:22 pm, 12th December 2008

My Lords, waste may not seem a glamorous subject but it impacts on us every day. Waste affects the prices of the goods we buy, the environment we live in, the businesses we work for and the future we leave to others. So I declare an interest, both as a citizen and more specifically as professor of manufacturing at Warwick University.

As a result of the all-pervading presence of waste in our society, the challenge of reducing it involves a complex, many-layered problem. From the individual consumer to the European Union, we all have a contribution to make.

In bringing out the contributions of every member of the committee, my noble friend Lord O'Neill deserves the thanks of the whole House for the thoughtful and non-partisan approach that he brought to the subject as chairman. His remarks in opening the debate were so to the point that I am tempted to reduce waste by simply agreeing with him and taking my seat, but in this area I am not quite as committed to re-use and recycling as I should be.

As the report states, on current estimates we produce 270 million tonnes of waste each year, but it is important to realise that this enormous figure refers only to the waste that we can measure. For example, if a process is developed to reduce the paint used on a car by 20 per cent but no one uses it, then 20 per cent of all car painting is wasteful, but it will never be classified as such. This is a crucial point because it shows that, when we examine the challenge of reducing waste from first principles, then design and the transfer of knowledge are central to our task. If we were to focus simply on waste disposal and recycling, we would spend too little time thinking about the management of waste reduction from first concepts. This is the essence of the waste hierarchy that is discussed in the report. So I am glad that the government response recognises that only 9 per cent of waste comes from consumers and that we need a "much stronger" focus on business waste. The question is how to achieve this aim.

The committee discovered that we have no shortage of regulation on the subject of waste. From Europe alone, we have a galaxy of directives. There is the waste framework directive, the end-of-life vehicle directive, the waste electrical and electronic equipment directive, the packaging waste directive and many more. Many of these directives are helpful; some have achieved notable success. As an aside, like many others, I have concerns about the practicality of applying extended producer responsibility to the entire electronics industry, but it is probably sufficient for the moment to say that, while the principle is fair, the implementation must be managed very carefully.

Unfortunately, this regulatory focus on the disposal and management of waste has not been accompanied by a similar focus on the benefits of designing out waste to begin with. As a result, as the report says at paragraph 3.25, many businesses are unclear about what they should be doing to reduce waste. Witnesses told the committee that as much as four-fifths of a product's environmental impact could be eliminated through better design, yet we do not give four-fifths of our attention to better design. As the Centre for Resource Management and Efficiency at Cranfield University told us, eco-design is not seen as an essential function.

There is no doubt that pressure by regulation has increased business interest in waste reduction but, alongside the stick of regulation, surely we need to offer businesses the carrot of improved profits and lower costs. Sometimes the benefits of less wasteful design are obvious and businesses do not need prompting to pursue them. The witness from Philips told the committee that three-quarters of the company's environmental initiatives had a positive impact on its bottom line. The benefit to automotive manufacturers of producing lighter, more fuel-efficient cars is also very clear, but identifying and reducing waste is not always obvious, especially for small and medium-sized enterprises struggling with the day-to-day battle to increase their business. It takes time, effort and staff resource, all of which are at a premium.

Therefore, those involved in design and production in development agencies, universities and research councils need to work together with businesses to find practical ways to minimise waste. As an engineer myself, I was particularly struck by the six sustainable design strategies set out by the Resource Efficient Design initiative at De Montfort University. These strategies—design for disassembly, product light weighting, durability, recyclability, reusability and cradle-to-cradle design—give us a useful way of categorising and educating designers and engineers in the techniques and benefits of low-waste design. For example, consumer PCs are essentially modular, but very few consumers treat them as such, which means that many computers are simply discarded when computing requirements increase. This is as much an engineering design as a waste disposal problem. There is no magic bullet for a problem as big as waste, merely the continued application of common sense and new technologies.

Like the lean manufacturing model employed with such success by modern manufacturers, minimising waste via better design must be a continual, iterative process. Whether by improving modular production or the application of "smart" materials, such as plastics which expand when exposed to particular sound frequencies, innovation and better design can help to reduce waste in measurable ways. We must ensure that low-waste design is part of all our higher education and research priorities and that this research is made useful to business via knowledge-transfer networks and partnerships with industry. This should be a real priority for the Government.

I believe that the Government need to be more aggressive in supporting the spread of low-waste design to businesses than their current response to the report suggests. The Government's science budget allocation document says that research focused on energy consumption and living with environmental change are two of the four "grand challenges" that face the nation. Despite this, there is little clarity on how research councils are supporting these aspirations with hard cash.

The Government should pay careful attention to the funding streams for sustainable design, waste reduction research and knowledge transfer. As Dr Tracy Bhamra of Loughborough told us, sustainable design and knowledge transfer is currently something of an ad hoc affair. We need to change that, and to be blunt, that takes money.

The EPSRC told us that it is important to focus on a holistic understanding of the whole resource and energy life cycle. Indeed it is, but given the importance of waste reduction now, it is just as important to focus on the practical changes that can be made by research and development and the subsequent knowledge transfer of new technologies. Today, funding to do this is available to researchers and businesses through ring-fenced funding, but this is being phased out in favour of a more flexible approach. We must ensure that investment in sustainable design and waste reduction increasesafter the move away from ring-fenced funding.

Increased investment would also provide a helpful spoonful of sugar to make sure businesses accept the benefits of landfill tax increases, even if this is not quite the tax hypothecation that the Government oppose. I was pleased that Ian Pearson MP, the former science Minister, was focused on this point. I hope that he has taken that same focus with him to his new eminence in the Treasury and that his successor keeps a clear focus on this area.

Among engineering students and businesses there is huge enthusiasm for finding ways to reduce waste. As an engineer, I can tell the House that there is nothing we like more than a practical problem on which to start working. When we hear of innovations, such as the use of RFID chips to track component parts or lamination to reduce packaging requirements, even a grey beard like me can think of myriad uses to reduce waste across several industries. In just the same way, my students are excited and inspired by the possibilities of low-waste design.

At Warwick Manufacturing Group we recently developed the Eco One racing car, made entirely from natural materials. The tyres are made from corn starch and the body work from plant fibres. Green yes, but it has a power-to-weight ratio superior to a Ferrari Enzo and can reach 140 mph. The enthusiasm that those students showed in finding cradle to cradle solutions to design problems will stay with them for life, as will the understanding of how to develop low-waste answers to high-tech challenges. Students like these, the future engineers and designers of our products, should be helped to find practical solutions to our growing waste crisis. We should help them by extending the education of all designers and engineers on waste minimisation and reduction and by increasing the funding that goes to supporting research and innovation in low waste design, whether blue sky or applied. Finally, we should all help by ensuring that the benefits of their research are quickly propagated to the businesses that can apply them in the commercial world.

I believe that this report shows us the way forward.

Photo of Baroness Sharp of Guildford Baroness Sharp of Guildford Spokesperson in the Lords, Innovation, Universities and Skills 12:33 pm, 12th December 2008

My Lords, I speak wearing two hats: first, as the spokesman from the Liberal Democrat Front Bench and, secondly, as a member of the committee. Fortunately there is no conflict of interest, as my party endorses all the recommendations in the report and I am happy to do the same. I extend my thanks to the noble Lord, Lord O'Neill of Clackmannan, for the way in which he chaired the committee and for his masterly presentation this morning of its main findings. I also thank our expert, Professor Stephen Evans, and our clerk, Sarah Jones, who both contributed substantially to what proved to be a substantial report.

We began, as the noble Lord, Lord O'Neill, mentioned, by looking at the waste hierarchy. I was slightly surprised that we used the term "prevention" rather than "reduction", because I have always thought of it in terms of the three Rs. Perhaps in my education hat I think naturally in those terms, but reduce, reuse and recycle were always the top three elements in the waste hierarchy. Reduction is at the top because it positively saves us from using the resources of energy, material and labour unnecessarily. If we reduce waste, everyone gains. Potentially there are more resources to devote to meeting other needs, or perhaps one should say future needs. We should be aware that every tonne that goes into landfill is equivalent to a quarter of a tonne of CO2. The more we can save from going into landfill, the more we are contributing to limiting our emissions of CO2 and other greenhouse gases. The rule of thumb that I use is the one used by WRAP, although I confess that it is very rough and ready.

It is significant that we are discussing this report today at a time when in Brussels people are arguing hard about the future of the emissions trading system. Perhaps I should declare another interest. I was rolled off the Science and Technology Committee and rolled on to another committee, which has been looking at the EU emissions trading system and produced its report earlier this week. We argued that we should be tough and not let the EU run away from its climate change obligations and that we should stick by our targets. It is significant that waste management contributes to helping to fulfil our responsibilities under those CO2 targets.

As I said, reduction has the top slot in the hierarchy. To our mind—the noble Lord, Lord O'Neill, and the noble Earl, Lord Selborne, mentioned this—it got lost to some extent in government policy, where concentration has been placed disproportionately on recycling, the third one in the hierarchy, and particularly on recycling domestic waste. Only 9 per cent of waste in this country is domestic waste, so our report concentrated on the 91 per cent that comes from the commercial and industrial sectors and on the need for reduction there.

How relatively easily that can be achieved was illustrated in a piece in the Guardian commenting on our report. It produced the example of the £1 billion Bart's and the Royal London hospitals' building site. The main contractor is Skanska, and 99 per cent of the waste from the site is now recycled in one form or another. More to the point, Skanska has worked with its suppliers and trade contractors to prevent waste from coming on site by minimising the amount of packaging and by ordering components to size and fit. By careful planning and ordering and by working closely with the designers, it has been able to eliminate much of what was previously designated waste. Where waste comes on site, it is carefully segregated into different skips and can be recycled from them.

In our report, we were anxious that some of these principles should be adopted by industry. Putting emphasis on sustainability alongside engineering and design in the early stages of product development would see a new generation of products coming down the line, whether tin cans or cars, where resource efficiency is the key element in production and use. The noble Lord, Lord Bhattacharyya, spoke about his students' excitement in taking up these principles and incorporating them in the work that they are doing. It is exciting that we now have a new generation of students coming through who have these principles in mind.

To some degree, we can see the concept of life-cycle analysis, which looks at the use of resources through the life of a product, being incorporated in some of the elements that we are seeing coming into use. The End-of-Life Vehicles Regulations have already been mentioned. Almost everybody has mentioned that we were very influenced by our visit to Toyota and how impressed we were by the fact that Toyota is taking these principles into account. It is significant that its Burnaston plant was the first plant to achieve zero waste. The noble Lord, Lord O'Neill, mentioned that that is an ideal, but in 2005, three years ago, the Burnaston plant achieved the zero-waste target. All Toyota's plants in Europe are now zero waste. That it can be done and that a lot of it is achieved through design is strikingly important and an example to us all.

We were also influenced when we went to see Xerox and Hewlett-Packard and talked to them about the way in which they recycle their machinery. We were impressed by the extent to which Xerox is recycling copiers and designing them so that they can be dismantled and the parts can be refurbished and used again. What was sad was the degree to which consumers are not always ready to use those machines. We need to take consumer attitudes seriously.

Firms such as Toyota, Xerox or Hewlett Packard are at the forefront of what can be achieved. However, the difficulty for small and medium-sized businesses, which make up the majority of British firms, is that unless they are caught up in the supply-side chain of one of these major firms, they are somewhat left out in the cold. Indeed, their position is perhaps even worse than being left out in the cold because, as we discovered, they often have difficulty even in recycling their rubbish. The noble Earl, Lord Selborne, mentioned that local authorities are loath to pick up any waste that they are not required to because of the LAT scheme. Small and medium-sized businesses find that they have to make arrangements for commercial collection of their waste. However, because they are too small to handle specialist recyclables, many commercial companies will take general waste but not specialist recyclables. Small and medium-sized businesses then get rapped on the knuckles if they put their recyclables in the local authority site. They face a real problem.

By contrast, in Belgium we visited OVAM, the public waste agency in Flanders. It provides a counselling service for small and medium-sized businesses, helps them to dispose of their waste and provides them with free audits and a lot of advice about how they can minimise waste. I am sure that the Minister will say that the Government have been providing precisely that sort of help. Under the BREW—business resource efficiency and waste—scheme, there were four agencies: WRAP, the waste resource action programme; Envirowise; the national industrial symbiosis programme, which was rather misnamed, because no one really knew what it meant, although it provided precisely that sort of help from government; and the market transformation programme. They all, in their different ways, helped to advise and direct small firms in their waste management programmes, giving them precisely the sort of help that OVAM provides in Flanders.

We then discovered that the budget for all the BREW programmes, which had stood at just over £90 million, was cut last year to £56 million. Schemes such as the national industrial symbiosis programme have been more or less eliminated. It is very difficult to understand why the Government are folding those schemes. They were to a degree overlapping and I know that the Government are bringing them under the RDA hat and that they will be served by Business Link. However, when you have spent three or four years training people to provide precisely that advice, is it not absolutely stupid to fold those schemes and try to start all over again training a whole lot of new consultants under the Business Link scheme? Will the RDAs really be able to do that job? What sort of measures of waste reduction will be used by RDAs? What competence do they have to provide the energy audits that schemes such as WRAP and NISP used to provide?

Once again, the Government, having got some relatively small schemes—in the broad picture, £90 million is very small beer for the Government to spend—up and running, doing a very useful job and becoming extremely successful, just close them down and start again. That is too typical of the initiatives that we see from the Government. It is most unfortunate. Let me quote from the Government's response as to why they were doing that:

"Defra's delivery bodies have delivered major environmental benefits and substantial cost savings for businesses".

That is absolutely true.

"However, given the change in business attitudes referred to above"— in the government evidence, but I am not sure what they were referring to there—

"we have decided to refocus the support that we provide through our delivery bodies. From the current financial year onwards, support will concentrate on providing the necessary evidence to encourage businesses to change their behaviour, rather than supporting individual businesses for projects where the benefits come quickly through to the company bottom line".

More evidence and information are not what those companies need. They are receiving masses of glossy brochures every day. They do not want more information. They want precisely what they were getting, which was direct help with their bottom line.

Why do the Government do this? Why do they resist the hypothecation of the landfill tax? It works so well. I know that the Treasury does not like hypothecation, but if you are trying to mobilise public opinion, nothing was better than the notion that you could trade off investment in the infrastructure to provide better waste management and the little schemes to help small and medium-sized businesses against the money paid in such taxes. Locally, you could trade off environmental improvements against money paid in those taxes. That gave the public the right message. By breaking the hypothecation link, the Government are sending completely the wrong message to the public.

Our biggest disappointment is the failure of the Government to provide a lead on the issue—indeed, on all environmental issues. The Minister probably does not agree, but having sat through reports on renewable energy, energy efficiency and now waste reduction, time and again I have had the one feeling that the public are now ready for a lead, but the Government have failed and failed again to provide it. There is a problem with consumers; we know that. The "I will if you will" attitude is endemic, but the credit crunch provides us with an opportunity to break the link with conspicuous consumption. I think that the public are willing to follow a lead from the Government, as is business.

I cite the evidence given to us by Mr Tait, programme manager for the market transformation programme. He said that businesses want "long, loud and legal" signals:

"They want it to be absolutely clear that this is a long-term process; they want to be told about it clearly, in no uncertain terms; and they want to have it underpinned by a legal framework so they know exactly where they stand".

This is extremely disappointing. The government response as a whole is very complacent.

Finally, I shall read from two paragraphs from the Government's introductory remarks. Paragraph 5 says:

"We have made good progress already and our focus is now to continue to translate these priorities into practical action, in a way which makes a difference on the ground".

Well, all right, but good progress in what? The UK in relation to our international partners, particularly our European partners, is at the bottom of the league tables. There is so much to be achieved and so much that we could do. We only have to look at a country such as Belgium, which we visited, or Germany to realise how much there is to be done. What complacency is this on the part of the Government?

Paragraph 7 says:

"We already have a wide array of measures and processes to address the key issues ... Measures already in place include the substantial increase in the landfill tax escalator announced in 2007"— yes, but that is not an environmental measure—

"a range of voluntary agreements on waste reduction and recycling with different sectors of industry, detailed implementation of several sector-specific EU waste directives, and EU agreement on revisions to the Waste Framework Directive".

Yes, yes, yes, we have all these, but, with the exception of the landfill tax escalator, these are all either voluntary agreements—we know that although some countries will obey them, others will not; it is often a matter of "I will if you will"—or are EU driven. Indeed, we have much for which to thank the EU. I do not know whether others sat in on the previous debate, but quite clearly this is an area in which the EU has taken the lead and our Government have not. In no sense have the Government shown decisive leadership in all this.

The danger of the recession that is now upon us is that the environmental agenda will be shelved. Recycling schemes are already under threat from falling commodity prices, and many similar initiatives will be under pressure. Yet recession also offers the opportunity to make a decisive change. If the Government are prepared to adopt active leadership, this is the time to encourage people to make those behavioural changes for which we have long been looking: to buy products that last longer and can be repaired and not just scrapped; to shift to smaller, energy-efficient cars; and to turn the central heating down that one notch. What we need from the Government is not the attitude, "We are doing splendidly. Now it is up to you", but, "This is an opportunity to make substantial changes, and we will provide the lead to help you to make those changes". I hope that I shall hear something of this response from the Minister.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Shadow Minister, Environment, Food & Rural Affairs 12:52 pm, 12th December 2008

My Lords, I declare an interest as the co-chairman of the Associate Parliamentary Sustainable Resource Group. This used to be the All-Party Sustainable Waste Group, so it has a great interest in this subject, and I take this opportunity to praise its work in this area. It has done a lot, not least when it organised a reception to celebrate the publication of the committee's report. My bulb business also has a packaging waste obligation, so I have a direct interest in and some experience of the subject. On a personal note, however, I suspect that when my doctor talks of waste reduction, he has something else in mind.

I thank the House of Lords sub-committee for producing this report and the noble Lord, Lord O'Neill of Clackmannan, for its introduction. All noble Lords have spoken from experience in the debate. The Government have produced a somewhat disappointing written response, and I look forward to the Minister's reply at the conclusion of this debate in the hope that the Government might be able to remedy some of these deficiencies.

Waste reduction and resource efficiency are integral, as the noble Baroness, Lady Sharp, has pointed out, to our contribution in combating climate change by reducing greenhouse gas emissions and by our sustainable use of resources, which are depleting rapidly. Zero waste must be the objective, even if it is a distant prospect, as the noble Lord, Lord O'Neill, has pointed out, if we are to meet the needs of our environment and the social well-being of our economy.

I welcome the report's focus on waste from the industrial, commercial and construction sectors. Domestic waste, as has been pointed out, accounts for only 9 per cent of the total waste stream in the UK. It is a much smaller percentage than most people would believe. I also wish to commend the Science and Technology Committee for examining waste reduction and for placing a clear emphasis on the urgent need for waste prevention and reduction, rather than actions about the management of waste, however important that might be.

In addition, I welcome the report's emphasis that waste reduction is a priority which requires a collaborative approach and calls for a strong lead from government. In the light of the urgent need to focus on waste reduction, what action specifically will the Government take to address this? I have a number of questions, which, if the Minister is unable to give direct answers to today, perhaps he might respond to in writing to interested noble Lords. The sentiment of the debate is that we should like to take this report on and we hope that the Government will take note of it.

There is a significant commentary on data in the report. It highlights that there is a lack of joined-up data collection. It suggests that the Government's approach of amalgamating administrative data sources is an insufficient and short-sighted way of tackling waste. When questioned about the lack of data, the Minister in another place, Joan Ruddock, conceded "we have got gaps". But, rather than attempting to "plug all those gaps" the Government decided to focus on priority waste streams and then,

"work on the reduction of waste within that particular waste stream".

The Government have said that they are focusing on priority waste streams. However, does the Minister believe that the data collection on waste will be sufficient to improve our policy and that it would fully meet the requirements for recycling targets from the newly adopted waste framework directive?

The last comprehensive data survey on commercial industrial waste was conducted by the Environment Agency in 2002-03. We in the Opposition believe that there need to be comprehensive surveys to collect data on various waste streams in the UK in order to provide a holistic view on the development of a strategic direction of waste policy. As the report states:

"Targets and policies ... are meaningless if they are not based upon a thorough understanding of the waste streams involved".

I turn now to sustainable design. It has been suggested that about 80 per cent of a product's environmental impact can be eliminated by better design. The report states that some businesses have begun to embrace sustainability principles as part of their product design, to which noble Lords have referred in this debate, but that large gaps in knowledge still exist. The noble Lord, Lord O'Neill, rightly praised the work at De Montfort University and the noble Lord, Lord Bhattacharyya, brought us his engineering experience to show what can be done by research and knowledge transfer. We must not forget just how important knowledge transfer is to complement the research.

The Opposition believe that in order to encourage sustainable design, designers must be encouraged to work beyond the minimum level of compliance. This process must start at the beginning of product life, with designing out waste through reduced packaging and improved product design. It is possible to use raw materials much more efficaciously and in turn recycle and reuse to much greater effect. This undoubtedly offers environmental and economic benefits. Does the Minister support the use of awards, for example, as suggested in the report, which would be issued by professional bodies to acknowledge those who push the boundaries of sustainable design?

I should like to celebrate an excellent example of how a collaborative approach to sustainable design was recorded in the report. SATCoL, the trading arm of the Salvation Army in the UK, collaborating with a spin-out company of the University of Leeds and Oakdene Hollins, has been working on a cradle-to-cradle approach to encourage the creation of sustainable textile garments. Their work is directed at encouraging reuse—in other words, upcycling—and extending the life of existing products, and should be commended.

At the heart of a waste reduction economy is a set of measures on producer responsibility. This means a reduction in the environmental impact of products and is achieved by producers changing product design, substituting materials and extending product life. Current producer responsibility arrangements cover only a small proportion of waste, mainly packaging, electrical goods, vehicles and batteries. Furthermore, because the current scope of producer responsibility is based on specific categories, it represents only 16 per cent of the total waste generated. It is imperative that we extend producer responsibility at least to those industries, such as electronic producers, that have unilaterally written a joint statement calling on individual producer responsibility in their sector. We know that the British Retail Consortium remains supportive of the reduction of waste. There is much that it can do in this area, as indicated by the noble Lord, Lord Whitty, in his valid point about the sell-by date on foodstuffs.

We need better producer responsibility so that it changes the nature of products. Poor implementation and enforcement of producer responsibility legislation, such as the essential requirements of the 1994 packaging waste directive, have resulted in limited success and missed opportunities regarding waste reduction. How right my noble friend Lord Selborne was to point out that the use of weight criteria discriminates against aluminium, one of the most recyclable materials but in energy terms one of the most costly to produce from its bauxite ore.

The Opposition have recently announced that Archie Norman, the former shadow Environment Secretary and chairman and chief executive of Asda, will develop the first "responsibility deal", looking at producer waste. I look forward to the development of this deal, and certainly Mr Norman's experience and drive give good reason to suppose that it can make a significant difference. But what the report makes clear to the Government is that there is much that they can do, and others can take the initiative if they fail to do so.

I am sure that we are all well aware of the collapse in the market for recycled products. Recommendation 4 of the report is,

"to once again ring-fence a proportion of the landfill tax revenue to fund waste reduction initiatives".

What is the Government's response to this recommendation? As the noble Lord, Lord Whitty, pointed out, we are way behind in new technologies on recovering energy from waste, whether through the thermal combustion of dry products or anaerobic digestion systems for wet products.

The key to success lies in encouraging businesses to place waste reduction high on their agenda. Those firms which implement innovative solutions to waste reduction often make significant cost savings that also contribute to environmental gains. However, businesses are still lacking information, advice and guidance on clear strategies for waste reduction, and many still fail to recognise the financial costs of their waste material. As enormous contributors to waste production in the UK, it is vital that businesses are given the support required to improve their environmental performance. It is a cause for concern that the Government consider the current arrangements for business support to be sufficient. As the noble Baroness, Lady Sharp, pointed out, organisations such as the Waste and Resources Action Programme, Envirowise and the Market Transformation Programme have an essential part to play in maintaining the momentum in waste reduction, but at the same time the committee recorded its extreme disappointment at the reduced funding for some of these major support bodies. What are the Government's plans for the future funding of these projects?

It is clear that there is a key relationship between businesses and local authorities in managing waste reduction. As the noble Lord, Lord O'Neill, pointed out, there is a need to provide further guidance to local authorities. How do the Government plan to support the role of local authorities in the management of commercial and industrial waste in the light of funding cuts?

I have spoken up until now about the role of business in particular, but we all have a part to play. Changing our approach to waste is vital for the health of the environment; it is about changing our mindset. Use of eco-labels is a step in the right direction to help consumers make informed choices over products. However, as the committee report noted, the use of eco-labels will not be enough to change the behaviour of consumers to ensure that we become a zero waste society. More must be done, not least, of course, the introduction of an agreed labelling standard, as the noble Lord, Lord Whitty, pointed out. What other measures will the Government take to ensure that there is a change in consumer behaviour towards purchasing environmentally supportive goods?

There is a lack of effective ways for government, business, the voluntary sector and other members of the community to work together. As part of the collaborative approach required, the Government should not underestimate the role that the voluntary sector can play in mobilising support among individuals and community groups—for example, the work of the furniture reuse project during the July 2007 floods, a voluntary network which offered free furniture to those in need.

The Government must, of course, get their own house in order first. We commend them for the establishment of the Centre of Expertise in Sustainable Procurement and look forward to the principles of waste reduction being incorporated into all government departments.

I conclude by thanking once again the sub-committee for conducting this important inquiry and I congratulate its chairman, the noble Lord, Lord O'Neill of Clackmannan, on producing an impressive report. "A useful exercise", he said. I should say so. Comments throughout the report demonstrate the value that waste reduction brings to creating a low-carbon economy and the pursuit of a zero waste society. I agree with that view and look forward to progress on the committee's recommendations.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Minister of State (Sustainable Development, Climate Change Adaptation and Air Quality), Department for Environment, Food and Rural Affairs, Minister of State (Sustainable Development, Climate Change Adaptation and Air Quality), Department for Energy and Climate Change, Minister of State (Department of Energy and Climate Change), Minister of State (Department for Environment, Food and Rural Affairs) (Sustainable Development, Climate Change Adaptation and Air Quality) (also in the Department for Energy and Climate Change), Deputy Leader of the House of Lords 1:07 pm, 12th December 2008

My Lords, I thank my noble friend Lord O'Neill for his chairmanship of the committee and for an excellent opening speech in today's interesting debate. Although he said that he was disappointed with some aspects of the response from Defra, some useful matters have been raised today and I can assure him that we wish to continue the dialogue. He mentioned wishing to have further engagement with officials in my department; I would welcome that. It has been a very informative debate.

I welcome the emphasis in the report and in the debate on non-domestic waste, an entirely sensible focus. I also commend the committee on the development of what is described as the waste hierarchy, with disposal being regarded as the last resort. The noble Lord, Lord Taylor, referred to waste and his waist. This can be seen in parallel with the way in which health policy has changed in recent years. For many years the emphasis was always on the end of life—or at least when care had to be given in hospital—whereas recently more emphasis has been placed on prevention in the first place. Of course care in itself is important, just as disposal policies are important, but it has been helpful to give a sense of the comprehensive, integrated and holistic approach that needs to be taken on waste.

I agree that it is right for the UK to seek to set an example. I agreed with the noble Baroness, Lady Sharp, before she injected some disagreeable comments into the later aspects of her speech, when she referred to the current discussions in Europe. She knows that in the Council of Heads of State these very matters are being discussed at the moment. They are critical, not just in terms of European action but with regard to our hopes for Copenhagen at the end of next year. Unless Europe sets the right example, those negotiations will become more difficult.

My noble friend Lord Bhattacharyya said that waste is hugely important and complex. Indeed it is, but it is part of a more general approach to sustainability and our efforts in respect of climate change. It is difficult to overestimate the importance of what we are discussing today.

I reject the noble Baroness's delightful way of accusing the Government of complacency. My experience in the department I now speak for over the past two and a half months is that there is a huge range of activity, and indeed concern, to ensure that we get our policies and actions right with regard to waste. Her analysis that we are way behind our EU counterparts is not borne out by the facts. Of course there is more that we need to do and that can be done, but we should not underestimate the achievements that have taken place so far. We all accept that waste reduction is necessary, both for reducing carbon emissions and for using resources more efficiently. One of the important messages to come through today is the significant economic benefits for society and businesses of more efficient approaches to the use and disposal of materials, including waste prevention and re-use. The recent developments in the world economy further underline the importance of waste reduction.

That is the key message we have to get over to businesses, whether large businesses or SMEs, and to public sector organisations, which in many cases—the health service in particular—run operations that are very similar to business operations. We have heard examples of businesses that have done extraordinarily well in this area and in the area of design in the past few years, but we have to accept that there is much more to be done to ensure that business is aware of the potential for greater resource efficiency.

I have been discussing this matter with officials very recently, and one thing that has become clear is that the real challenge is to get through to business leaders—the boards of directors and the chief executives—of public sector organisations. We have to take advantage of the challenging economic climate to do that. I pay tribute in that regard to the all-party group mentioned by the noble Lord, Lord Taylor, because it has played an important part in bringing together businesses that operate in the waste sector and the customers they wish to engage with. For me the key challenge remains the question of what we can do to encourage business to recognise that there are distinct financial advantages for it in taking this agenda seriously.

I understand the concerns that the economic downturn poses a problem for those managing waste, as does the volatility of the recycling market. My noble friend Lord Whitty thought that we should be wary of panicking, and I understand that. I was at the Energy Council of the EU last week where this matter was raised by a number of member states. The EU has agreed to consider it before the council's next meeting. Clearly, we are all aware of the issue.

Equally, we have to focus on commercial and industrial waste. The committee feels that greater emphasis needs to be given by Government to commercial and industrial waste. We believe that the Government have a series of policies which are just so addressed: the landfill tax escalator specifically targets business and commerce as highways producers. I shall come on to hypothecation in a moment. We have a big programme of engagement with business, and we are engaging with key waste stakeholders on priorities for commercial and industrial waste reduction.

I understand the concerns that local authorities may not be providing adequate opportunities for businesses to dispose of and recycle waste. I accept that the connections between commercial and municipal waste streams could be improved. We support the development of local government services through the BREW Centre for Local Authorities, and I do not believe that we should underestimate its work.

A number of noble Lords referred to the perception that local authorities may be disincentivised to collect commercial waste by the landfill allowance trading scheme. I understand that this is a concern for some waste disposal authorities, although there is no evidence that the proportion of commercial waste in the municipal waste stream is decreasing. A dilemma for the Government is that we are very keen to ensure that the landfill directive targets in 2013 and 2020 are met. They are very challenging. Long-term certainty and stability is needed in the scheme. That has led us to the view that rather than restructuring the scheme, we should use the BREW Centre for Local Authorities, which is funded, to support and encourage local authorities to address commercial and industrial waste.

I also understand the points raised by my noble friend Lord O'Neill and the noble Earl, Lord Selborne, about local authority performance and the need for greater consistency and direction. How I wish that they had made that point in the Queen's Speech debate on local government only two days ago. Here we have the eternal problem between the role of local authorities and central government. In our Queen's Speech debate on local government, most—indeed, all—of the arguments from noble Lords, particularly those on the Liberal Democrat Benches, were that the Government were telling local government to do too much. Today, as often in these matters when one comes to a specific sector, the view of the House of Lords is entirely different—basically it wishes the Government to tell local government what to do. I recognise the dilemma, because Governments continually play that pressure, but in desisting from the encouragement to dictate to local government in this matter, we have to rise to the challenge of ensuring that local authorities co-ordinate their approaches as much as possible. I certainly accept the potential of joint waste authorities. I will reflect on the comments made in this debate regarding future discussions in my department and with local authorities.

I say to the noble Earl, Lord Selborne, that local authorities have expressed concern about the apparent difference between the practical definition of municipal waste used in guidance for the scheme compared with that set down in the underpinning legislation. We have consulted on this issue and I understand that the majority of responses to the consultation agreed that we need to clarify the interpretation of municipal waste used in the landfill allowance trading scheme. We are planning to change the definition of municipal waste in the Waste and Emissions Trading Act 2003 to bring it into line with the practical application for the 2009-10 LATS year.

I have said that we are keen to give certainty about the level of the standard rate of landfill tax. Decisions on rates beyond 2010-11 will be taken nearer the time, but I can say to the noble Lord, Lord Taylor, that the Government have stated that they expect the standard rate of landfill tax to continue to rise after 2010-11.

I will come to the issue of hypothecation in a moment because I need to address the resources made available by the Government to encourage greater reduction of business waste. It is on the record that the Government are being more selective in the activities that they fund. Clearly, finance must be used as effectively as possible. Inevitably, there are increasing demands on government budgets and we have to ensure that we spend our money in the most effective way possible. I am adding up the list of public expenditure commitments made by the noble Lord, Lord Taylor, and making a careful note. It is easy for all of us to say we should spend more money on particular areas, but we need to be responsible about budgeting. There are clearly strong advantages for businesses to follow the advice given to them by these excellent bodies. It is not simply a matter of putting more resources into these bodies. It is a question of the effectiveness of the advice and the messages given. In general, we are moving away from a policy of hypothecation in order to secure maximum flexibility from our budgets. Even without it, businesses continue to benefit substantially from the support that is provided.

We had an interesting discussion about design. All noble Lords mentioned it in one way or another. The case for less wasteful design was made very clearly indeed. My noble friend Lord Bhattacharyya made some helpful comments, which I will reflect on. I hope that he will offer further advice to the Government in view of the tremendous work that he has undertaken at the Warwick Manufacturing Group. The Government are working with the Design Council on these matters. Clearly, we have to raise awareness of sustainable good design. I certainly accept that that is a challenge that must be undertaken.

I agree with what the noble Lord, Lord Taylor, said about procurement. If we include local government and other bodies, the Government are responsible for approximately £185 billion, which is a huge amount. The more that sustainability in its widest sense can be seen to be a key part of decisions, the more impact we can have on businesses and the way that services are provided. I am keen to take forward that work.

Just as we were saying earlier that we need to ensure that students and designers understand this agenda, so do people who procure—not just the procurement directive within the Office of Government Commerce, but those out there in the world of business and in the public sector. All those people who are concerned with procurement need help, advice and training. We need to engage with the institutes that provide the examination qualifications for those in procurement in this area.

The noble Lord, Lord Taylor, also mentioned awards. I have a list, which I am happy to share with noble Lords, of the many awards available. It has raised in my own mind the question whether there are too many awards, and whether they are perhaps insufficiently focused. I would welcome comments from noble Lords and others on whether the current system of the huge number of awards really does the job properly. I am struck by the fact that, when you visit organisations, you often see in the entrance Investors in People awards or the Queen's Award flagged. I am not sure that I have seen many with relevance to sustainability. I wonder whether there needs to be a rationalisation and a way in which we can give more emphasis to those awards. We must come to that.

Producer responsibility is important. My department is concerned about the whole question of the environmental impact of products. We are currently piloting 10 product road maps looking at how environmental performance can be improved. I am hoping to launch another road map, on the clothing industry, some time in the new year. There is a great deal of potential.

The noble Earl, Lord Selborne, spoke wisely about how regulations can have a negative impact on the kind of progress that the committee wishes to see. He suggested that, while it is welcome that the Commission plans to overhaul and simplify the whole of the EU's waste legislation, it will take some time. He is of course right. I will certainly see what we can do to encourage faster progress. It is as well that the noble Lord, Lord Pearson, is not in his place to hear me say that. On action in this country, we are, in liaison with the Environment Agency, planning to issue for consultation updated guidance on the definition of waste to assist businesses and other interested parties.

My noble friend Lord Whitty made some important points on consumer behaviour. We have heard about De Montfort and the need for consumer groups to play their part. We have recently given our intent to pay grants to a number of consumer third-sector voluntary bodies to look at the impact that they can have on changing behaviour. I am happy to write to the noble Lord with further information.

I have no doubt that consumer pressure on businesses to change their attitudes and policies can be very powerful indeed. Given that consumers are increasingly concerned, they will be responsible for the tipping point in our country when businesses that do not get this message will find themselves out of business. I am sure that we need to do more with consumers. The points about sell-by dates and labelling are well taken.

Finally—I have run out of time—I clearly understand the importance of good data in this area. Ministers are always asking officials for more data. We are mostly criticised in this House for the amount of data that we collect. However, I understand what a critical issue this is. We are looking at the available data and the priority waste streams. Early next year we will come to a view on whether the existing sources of data pulled together provide sufficient quality, or whether we need to do further work. I will be happy to report to noble Lords who have spoken in this debate when we reach those conclusions.

This has been an important and informative debate. Although noble Lords may be disappointed with some aspects of the Government's response, I hope that I have convinced them that we take the report very seriously. We will continue to engage with members of the committee and with the important points that have been put forward today. I again thank my noble friend and members of the committee for their excellent work in this important area.

Photo of Lord O'Neill of Clackmannan Lord O'Neill of Clackmannan Labour 1:30 pm, 12th December 2008

My Lords, I am grateful to my committee colleagues, the noble Earl, Lord Selborne, the noble Lord, Lord Bhattacharyya, and the noble Baroness, Lady Sharp, for their contributions. We were not only by and large in agreement but complemented one another, as we did not specialise in the same areas. However, we all emphasised our commitment to improving design, and the awareness of design, which lies at the heart of resolving so many of the problems.

I thank my noble friend Lord Whitty for assisting us with his previous ministerial experience and his ever increasing expertise in consumer matters. He made most helpful points. I appreciate the backing that the noble Lord, Lord Taylor, gave to the report. I am not a consensus politician by gut instinct, but I consider that we can agree on matters of this nature. Since the summer we have seen an increase in environmental ambition in this House and in the other place. There is an ever heightening awareness of the importance of getting things right and not slackening in our work despite the fact that we are living in more straitened economic circumstances.

I welcomed at least some of the remarks of my noble friend Lord Hunt of Kings Heath. He did his best to be conciliatory. However, he or his officials will be put not to the sword but to the test if we reconvene the committee. A report of this nature is a position paper at a point in time, but we as a House must return to this issue, not next year but perhaps two or three years' hence, to see what is going on. Unless we keep it under scrutiny, this issue will be lost to people's attention. Out of sight is often out of mind. With that health warning, if I can put it that way, I submit the report to the House.

Motion agreed.

House adjourned at 1.33 pm.