Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence


Examination of Witness (Questions 780 - 799)

WEDNESDAY 22 NOVEMBER 2000

DR MALCOLM AICKIN

  780. But when you are asked a question and you have to give a really sharp answer, you would not do that, would you?
  (Dr Aickin) I hope I would.

  781. But you appear to have and then that evidence was not submitted to us, it was changed. The tone of it was changed.
  (Dr Aickin) To some extent the scheme is a very imaginative and powerful scheme. Could it be improved? Yes, of course it could be improved because everything could be improved, nothing starts off perfect. It is very difficult to balance criticism where you want things constructively to happen to make a thing better and you do not want then to be read to say this is not the sort of scheme that should be there. Having put those things down on paper, I think there is an inference from it that the scheme is in some ways fatally flawed, or that inference could be adduced from it. One of the reasons that we did not put the evidence in was that was not what we thought or felt and we wanted the scheme to be praised and continued, not criticised and stopped.

  782. What about the remuneration for Entrust's directors which specifically, according to their constitution, they should not be having?
  (Dr Aickin) To some extent you put that down on paper and you start looking at it and then you have to work out what the inferences are from it. When the scheme was started it did not go down the charitable route. The scheme requires that environmental bodies should be not for profit organisations. In not going down the charitable route there are two bits that are left aside, one of which is the charitable objectives of what the organisation can do and the other of which is the governance structure that it has to sit within. I think when the scheme was started some of the approved objects of the scheme it was felt might not be entirely within objects which were generally thought to be charitable. But when that was done, the idea both about the regulator, I suppose, and certainly about environmental bodies was that they should be not for profit, but in this country we do not have a very good understanding outside charity what not for profit means. It is perfectly proper, and I am not sure which version of the document you have, that the directors of Entrust should be remunerated for their time and trouble.

  783. But Entrust have a remarkable ability to change their constitution and regulations at a whim it seems.
  (Dr Aickin) That is a conclusion that I came to. Whether they are changing that for the better or for the worse is for other people to decide.

  784. For better or worse for whom?
  (Dr Aickin) For the scheme in general.

  785. Making it better for themselves in terms of remuneration?
  (Dr Aickin) The changes that they have made are in a public document and I think you have to read them and come to a conclusion for yourself. I do not think it is improper that the Entrust directors should be paid for the time and effort they put in. If it was a charity then it would be improper that they be paid but they would be within a different set of rules of governance. Given that they are paid, my personal view is that even if they were the most upstanding, upright people in the world, even if they were all of completely halo-like integrity, to give them the opportunity to set their own remuneration without reference to anyone outside is putting a temptation in their way which probably should not be put in their way.

  786. Do you think they were tempted?
  (Dr Aickin) I do not know whether they were tempted or not. If you take from that evidence a view that I thought they were tempted, or that EBCO thought they were tempted, then I think that we were right not to submit the evidence because that is really not the impression that we want to create. The opportunity for them to be tempted is there and I think it would be better if it was not there. I hope, through the Improvement Panel, that improvements like that will be accomplished. If you ask me now, today, what I think would be a better mechanism I could not give you an answer. That was written in essence because I think there is a possible temptation there and it probably would be better if it was not there. Whether or not they were tempted, I simply do not know and I am not capable to pass judgment really.

Mr Blunt

  787. These words, I presume, will be familiar to you: "EBCO has wanted to work with Entrust to make a difference to this situation.", the situation being the confusion caused by inconsistent and inappropriate implementation of complex and inadequate Regulations, "We believe that the Regulations and their implementation should facilitate, rather than curtail, the approved objects. Entrust has tended to consider our concerns as criticism for its own sake. It is a matter of deep regret to us, and ultimately of failure, that we have been unable to convince Entrust of the benefits collaboration would bring or of the valid role that environmental bodies have in such a process." Do those words ring a bell?
  (Dr Aickin) Those words ring a bell and they are helpful, at least, to place where the document that you have came from. I would no longer wish to give that flavour.

  788. Perhaps you no longer wish to give that flavour because of something else you said in your draft document earlier, talking about the appeals process that, however, EBCO is "ill defined, insufficiently independent of Entrust..." Perhaps you are now insufficiently independent of Entrust. Is that why you are backing off from the criticisms you made when you were freer?
  (Dr Aickin) No, it is not at all. One of the troubles with drafting documents is that you draft them and you know what you mean but you do not necessarily know what you say because you get too close.

  789. As regards early drafts, yes.
  (Dr Aickin) I think that expression of failure, if you like, is too self-critical. It is certainly too critical both of us and of Entrust.

  790. You are now on Entrust's Improvement Panel, are you not?
  (Dr Aickin) Yes.

  791. Are you paid for that work?
  (Dr Aickin) I believe so.

  Mr Olner: I happen to know whether I am paid or not.

Mr Blunt

  792. Are you in the position that you do not need to know whether you are paid for this work or not, which is a rather agreeable position to be in?
  (Dr Aickin) I am in the position where if I needed to be paid for this work, as you put it, then the amount of payment that I was paid as the Chairman of EBCO, I believe as a member of the Improvement Panel it is likely to be at the same level.

  793. What is that?
  (Dr Aickin) As the Chairman of EBCO it was £140 and some odd number of pennies a day, which I derived from some comparable scale because it seemed to be appropriate. If that was what I had to do for my living then I could not afford to do it.

  Mr Blunt: That makes sense. Thank you.

Mr Brake

  794. You have obviously touched on this but could I just ask you to describe your relationship now with EBCO and your relationship now with Entrust?
  (Dr Aickin) I would like to say that the relationship with both of them is friendly and constructive.

  795. You would like to perhaps but you are not going to?
  (Dr Aickin) That is the way I would describe it but perhaps you ought to ask them as well.

  796. Maybe there is another subject for a further inquiry there. In the evidence, which unfortunately you have not seen, you talk about complications, or someone talks about complications, in the Landfill Tax Credit Scheme Regulations to which resources have been diverted at the expense of the approved objects. If you do recognise that phrase, are you in a position to give us any examples?
  (Dr Aickin) I think there are complexities in the scheme and I think that understanding those complexities has diverted resources from other things. I think that the regulations themselves are less good than they might be. I think some of the things are quite complicated.

  797. Can you give us some concrete examples? There is this quote that is quite specific, "resources are being diverted at the expense of the approved objects."
  (Dr Aickin) For example, environmental bodies have told me that they did not use the self pre-approval pilot that Entrust ran in part because of the complexity and they wanted the comfort and the reassurance that what they thought the regulations said and meant, the regulator also thought the regulations said and meant. I think that when there is that degree of uncertainty caused by either confusion or complexity, if you are spending a lot of time and effort working out whether something is within the regulations or not then that is time and effort that you are not spending doing whatever it was that you wanted to do that was in the approved objects.

  798. Did you submit any suggestions as to how these complexities could be ironed out?
  (Dr Aickin) EBCO suggested, and EBs through EBCO's regional meetings have suggested, that an approach would be to go through both the regulations and what I suspect in that document is talked about as extra-regulatory requirements as well and say "what are these? Why are they there? Are they necessary? Can they be improved? Can they be simplified?" I think that is an exercise which is something that would be productive to hold. I could not give you very many examples now of how I thought the thing could be improved. I could possibly give you one but it is, I think, removed from the sustainable waste management subject of your inquiry. Within the regulations there are a number of places where either powers are given to the regulator or obligations are given to environmental bodies. There is also provision that Customs & Excise might dismiss the regulator. In those circumstances for some of the powers and for some of their obligations they have been reserved to the commissioners if they are exercising the powers of the regulator, but some of them have not been. I think that was sloppy draughtsmanship. I think either they should all be reserved or none of them should be reserved. It probably would be better to draft the regulations so that where Customs had the power to suspend or terminate the regulator's function and to take it over themselves that within that clause was the power to take over all the rights and duties, if you like. I do not have a draft for it but I think conceptually that would be a better way of doing it and would avoid the problem where, for example, if Customs took the regulator's functions there would be no two per cent levy on environmental bodies. If environmental bodies worked that out they might think it was an advantage to them in having Entrust suspended because that two per cent levy would be saved. Whether that would really be the case or not, I am not sure. Whether this is a theological argument about angels on the heads of pins, I am not sure, but it does seem to me that it is symptomatic of a drafting problem where if more intellectual effort had been put in to get this right then things would be easier rather than more difficult.

Christine Butler

  799. Did you personally write the draft, the submission that never arrived?
  (Dr Aickin) If you mean did I personally write it then the answer is yes, I wrote it in terms of pressing the keys on my computer to do it. If when you say did I personally do it, you mean did I do it in some personal capacity or did I do it as the Chairman of EBCO, as things have turned out, when we decided—


 
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