MONDAY 15 APRIL 2002

__________

Members present:

Mr Michael Jack, in the Chair
Mr David Borrow
Mr David Curry
Mr David Lepper
Mr Eric Martlew
Mr Austin Mitchell
Diana Organ
Paddy Tipping

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Memorandum submitted by Department for Environment, Food and Rural Affairs

Examination of Witnesses

RT HON MR MICHAEL MEACHER, a Member of the House, Minister of State (Environment), MS SUE ELLIS, Head of Waste Policy, and MS MARIA NOLAN, Global Atmosphere Division, Department for Environment, Food and Rural Affairs, examined.

Chairman

  1. Minister, you are very welcome indeed in terms of coming to the Committee. I wonder if for the record you would be kind enough to introduce the officials that you have brought with you.
  2. (Mr Meacher) Yes, certainly. On my right is Maria Nolan, who is Head of the Monitoring of the Montreal Protocol Policy Branch , ie ozone depletion. On my left is Sue Ellis, who is Head of the Waste Policy Division.

  3. Minister, I suppose this particular matter has been doing the rounds since 1999. Our inquiry cannot be said to be in quite that vintage but given that we wrote to you on 11 February, it took two months for your Department to produce its memorandum. Why so long for something that you are clearly aware is known so well?
  4. (Mr Meacher) I am sorry about that. I entirely accept that it was produced late. There was discussion about it before Easter and I was very keen to get it to you before Easter. Easter, as always, with the demands from a whole range of policy issues coming together, is very difficult. I really regret that we did not get it to you before Easter which was the intention and we have got it to you as soon as possible after that. There was a great deal of discussion on numerous items, not least lessons to be learned, which I am sure we are going to turn to at some point, but I do apologise for its lateness.

  5. Thank you very much for saying that. We are going to be looking in the course of the next couple of hours at a number of the points of detail that have come up so far as the purpose and implementation of this particular Directive is concerned. In a Parliamentary answer to myself where I asked you what the purpose of Regulation 2037/2000 was actually all about, you replied to me that the proposal for a Council Regulation on substances that deplete the ozone layer was published by the European Commission on 14 August 1998. "The environmental purpose of the Regulation was to further protect the ozone layer during a decade when ozone depletion was expected to peak." That seemed, certainly to my eye, to leave one in no doubt as to what the purpose of this was and yet, as we will see in our questions, there has been quite a discussion particularly about one item, namely the foam in refrigerators, as to whether it was in or out, although I do not want to anticipate the questions on that. Why, when you were so clear what the purpose of this was, should there be any doubt that anything that had an ozone depleting property in a fridge was covered by this particular Regulation?
  6. (Mr Meacher) As you say, Chairman, the aim of 2037 is to supplement the work of the Montreal Protocol and, in particular, to reflect amendments to the Protocol which have been negotiated between 1995 and 1997. It does go further than the Montreal Protocol in a variety of respects: tightening controls on HCFCs and methyl bromide; the recovery, if practicable, of ozone depleting substances from refrigeration and air-conditioning equipment; the ban on the use of CFCs in the servicing of equipment; the decommissioning of halon fire protection systems by 2003; the prohibition on the export of most controlled substances except HCFCs. That is a substantial tightening and one which I think is entirely justified in the international community's efforts to restrict ozone depleting substances. However, as I did indicate - and this of course is critical - the application of "if practicable" to certain forms of recovery is clearly stated in the original Article 15 and indeed of course was ---

  7. Can I stop you there because we will come back to that in some detail and I do not want us to be sidetracked off our proposed line of enquiry. I was anxious to establish whether you had received any advice at all from your officials that anything in terms of an ozone depleting substance was, at least potentially, covered by this particular Regulation. We will come on to "if practicable" in a moment. Looking at the actual document there seems to be a great long list of CFC-damaging substances in it. As far as I can see, it seems to be quite straightforward that anything with ozone in it was covered.
  8. (Mr Meacher) The Regulation was, of course, drafted by the Commission, not by the United Kingdom and we have to respond to what is in the Commission drafting of the regulation and that is what we did.

  9. We will come on to that. You in your evidence to us in paragraph 30 talk about some of the discussions to deal with the ban on the export of products, which was contained in Article 11 of the Regulation. From the papers that we have seen some of your officials appear to have taken up a lot of time in looking at this particular matter rather than perhaps looking at the questions related to the mandatory recovery of CFCs under Article 16. In fact, most of the discussion of the Management Committee on 4 October 2000 was on the subject of the export ban. Two letters from the Department of the Environment, Transport and Rural Affairs to the Commission's DG Environment dated as late as 8 January 2001 (which also, interestingly, acknowledged that two Member States had got the plant to recover CFCs in foam) dealt almost exclusively with the question of the export ban. Can you tell us why so much official time was taken on that particular matter in that correspondence of relatively recent vintage, that is the Article 11 issues, as opposed to focusing more closely on Article 16 which you started to tip-toe into in your opening comments. Was the eye taken off the ball as far as this export issue was concerned?
  10. (Mr Meacher) No I do not think so at all. You seem to be suggesting that it was exclusively Article 11; it was not.

  11. I am talking about the correspondence which I have specifically mentioned, letters from the DETR to the Commission's DG Environment dated 8 January 2001 and 30 January 2001. Are you aware of that correspondence?
  12. (Mr Meacher) I was not but it seems to me perfectly reasonable that the issue should be raised because it was an issue. It was not the main issue and we never thought it was.

  13. A lot of the official correspondence seems at that time to have concentrated on that rather than the point you were making before about "if practicable" and the other items that are in Article 16.
  14. (Mr Meacher) With respect, Mr Chairman, I think you are a little off the ball there, if I may say so. We were entirely concerned about Article 16 but the question of the ban on the export trade is something of which, first of all, the industry was not aware of I have to say with some surprise of which several departments, including other Member States who were concerned with the export trade, including the Commission, were not aware, nor, indeed, of the extent of it. That is why there was some discussion about it because it did take all parties by surprise - the industry which found it could no longer export and the various departments and Member States and the Commission who found that there was a thriving export trade of which they were unaware.

  15. Are you telling us that the way in which Whitehall correspondence is copied around for input and discussion on this occasion failed to flush out an important ingredient on the way in which this particular matter was going to apply in reality? What we seem to have here is a picture of the DTI, Customs and DEFRA all involved in this. Was there no co-ordination within government that was going to bring together information? You just said you were not aware of the export trade. Surely other departments are brought in to try and fill in the gaps of knowledge in the department?
  16. (Mr Meacher) Absolutely. I am saying there was considerable discussion once it emerged, first of all, that the waste industry was not aware of the Regulation preventing exports. That triggered an understanding on our part - and that is all government departments - that there was an issue here about exports of which we had never been told. We were never even told about it in terms of the extensive consultation that we carried through when the issue of exports was not raised. Therefore, for all of these reasons it is perfectly reasonable that there was considerable discussion about this issue. It was never the central issue but it was an important and significant side issue.

  17. Are you telling us that you received absolutely no written information whatsoever from any part of the waste disposal industry in the United Kingdom that dealt with this export point?
  18. (Mr Meacher) That is certainly my understanding but perhaps I could ask my official to confirm that.

    (Ms Nolan) Not until Customs & Excise started to enforce the ban when the Regulation came into force in October 2000.

    Mr Mitchell

  19. I just want to question the relationship between your Department and Customs & Excise. I am going on memory but we were told by Dixons, as I recall, that Customs & Excise, with its usual enthusiasm for hindering Britain's export trade in any way it possibly can, came in with a circular in September 2000 telling them and the people exporting their fridges (because they sent their fridges on to the people who exported them) that fridges could no longer be exported. That a circular specified that they could not be exported because of the CFCs not only in the coolants but in the insulating foam. In other words, both points which seem to have eluded DETR were known by Customs & Excise in September 2002.
  20. (Mr Meacher) I am sure that is correct. In other words, it did not matter where the CFCs were, whether they were in the coolants or whether they were also included the foam, the fact is that there are a lot of CFCs in the coolant equipment and that was a perfectly sufficient reason for the ban. The issue about the foam is a separate one as to whether recovery was required under the Regulation or whether it fell under 16 (3) and therefore "if practicable".

  21. The argument was that the fridges could not be exported unless the CFCs were taken out of both. DETR's position in 2001 right up until you got notification (and you told Parliament in June 2001 that it did apply to the foam) was that it did not apply to the foam and yet Customs seem to have thought it did.
  22. (Mr Meacher) When we do get on to this issue of the saga from the end of 1998 until June 2001 we will see that there has been a great deal of confusion, which of course is at the heart of this whole issue. I repeat, the issue is that Customs (in indicating to the waste industry that they could not export) were making clear that they could not export because the fridges contained CFCs or HCFCs. For that reason, because it would produce a problem for the developing countries, particularly West Africa and Nigeria in terms of disposal and put them at risk of the Montreal Protocol and because it was prohibited under Article 11, it would no longer take place. I do not think the fact that Customs & Excise regarded CFCs as being in the foam as well as in the liquid coolant meant that this issue of the application of recovery from the foam had been resolved or that they had a particular view. I do not believe that that is the case. This issue was resolved by us in our discussions with the Commission. As we shall soon see, there were very variant views on the application of the Regulation for foam.

  23. Customs were telling the disposal people that if it was removed from both then the fridges could be exported.
  24. (Mr Meacher) Indeed.

  25. So they knew?
  26. (Mr Meacher) If there is no CFC in the fridge at all then, of course, they could be exported, but that leaves open the question as to whether it could be removed fully from all parts of the fridge. Then we are back to the technical feasibility of this.

    Mr Borrow

  27. Can we move on to the subject you were touching on, which is this controversy over the "if practicable" bit of the discussions. If we go back to the informal meeting of Member States in June 2000 when I think this issue arose with the lead of the United Kingdom in Brussels and the discussion as to whether or not it was practicable to recover the foam from fridges, at that meeting some Member States felt that it was but the issue was not resolved and there was a later meeting of the Management Committee in October of that year at which again some Member States felt it was not practicable to remove the foam. The United Kingdom at that stage was still not clear whether it was or not. Why did it take until the meeting on 11 June 2001 for the United Kingdom to finally accept that it was practicable to recover the foam from fridges?
  28. (Mr Meacher) I would put it rather differently; why had it taken until 11 June 2001 for the Commission to reach an authorative view as to whether or not recovery applied to foam. If I may go through the main stages of this whole episode. The Regulation was passed in the Council of Ministers in December 1998. There was virtually no discussion of this issue we are talking about today because there was much greater concern, which had been raised by the industry, about the issue of the phase-out of HCFCs in the EU where it was believed it had begun on an international basis so it was not anti-competitive, and the phasing out of methyl bromide. Those were the issues that Ministers examined. As a result of that, we in the UK took the view that the Regulation would only require recovery of CFCs from the coolant equipment and not from the foam for two reasons. One is the definition of "recovery" under Article 2 of the Regulation which states that recovery means "the collection and the storage of controlled substances from, for example, machinery, equipment and containment vessels, during servicing or before disposal." Since we understood that it was not technically possible to remove controlled substances from rigid foams during servicing or before disposal, we believed that the recovery of CFCs would not be mandatory. Our other reason was that the original reference to "foams" had been deleted from 16 (1) and the new draft paragraph 3 inserted "where recovery is required, if practicable". It seemed to us a very good reason to believe that that is where the recovery from foam would fall. Following that, in February 1999 the first of the Management Committee meetings (and there are only two a year) of the EC took place, and as a result of our raising it - and this was the first time we raised it - it was decided to hold a workshop in Oslo to discuss the practicability of this as to whether it was technically possible to recover CFCs from domestic refrigerators. That was held. It was certainly indicated that the costs were high, especially in the case of insulating foam. Whether anything was taken forward from that, I am not aware. Then in October at the second EC Management Committee, the Committee agreed that clarification was needed on a range of definitions in the Regulation. The minutes of the discussion show that the possibility of making technical amendments to the Draft Regulation in the conciliation process was envisaged. However, the Portuguese Presidency and the Commission were much more focused on dealing with the amendments resulting from the second reading by the European Parliament, on which of course there would have to be a compromise, so it was not taken forward. We then get into (which is very important) the list of clarifications offered by the Commission to Member States on 28 February 2000. This gave their interpretation that Article 16 (1) did not apply to foams blown with either CFCs or HCFCs and "it was the Commission's understanding that the clarification proposed here is in line with the intention of the Council during negotiations of the new Regulation." The next occasion when the matter was raised was in March 2000 when United Kingdom officials requested that the same clarification should apply to 16 (2) because the language in both paragraphs was the same. There was some discussion about that but no conclusion reached. Then in July 2000, as our memorandum indicates, the matter was raised in the margins of a UNEP Montreal Protocol meeting. Some countries - Sweden and Denmark - wanted to go a great deal further and they said that recovery from foam in refrigeration was possible and therefore should be mandatory. We therefore raised it with UNEP's Technology and Economic Assessment Panel as to whether that was feasible. They advised that it would not be possible to remove controlled substances from foam either during maintenance or before dismantling, so removal during service and maintenance was not possible as no such service or maintenance of the foam takes place. They advised that there was a possibility of recovering controlled substances before disposal of equipment but it was not practicable to do so because experience of recovery was mixed, and therefore it was premature to make this mandatory. On 11 September 2000, UK officials therefore wrote to the EU Commission supporting the interpretation that foams should be classified as a "product" under Article 16(3) and that recovery would be only "if practicable". That was the fifth time we raised it. The sixth time was at the fourth Management Committee meeting in October 2000 where the United Kingdom having written the letter, the matter was discussed. The minutes of the meeting 4 to 6 October 2000 record that the Committee agreed that foam containing CFCs was classified as a product and therefore covered by Article 16 (3), in other words if practicable. There was no discussion, I have to say, about what practicability meant and there was a further issue as to whether that would require an extended timescale for introduction so that the technology would be in place. There was another EC Management Committee meeting on 25 October 2000. Again, we raised the matter there. Again, the Commission advised that it would be considered. Perhaps, Chairman, it would be helpful, although it is rather tedious and long, if I just completed this which takes it a little bit further than Mr Borrow had raised. We then sought legal advice at the end of December 2000. Here I think we get to the very heart of this extremely vexed issue. There are, in effect, two views. One is that the fridge contains foam as an integral product and that the CFCs are within the foam in the fridge, in which case it could well be that fridge insulation that is foam blown with CFCs comes under 16 (2) and not under 16 (3). That is one view and, indeed, our legal advice tended to go in that direction. However, that view is contrary to the interpretation of the Commission in its clarification table and the consensus which was reached by Member States that foam contained in the equipment was a product and therefore would fall under the "if practicable" proviso in 16.3. There are two views. One is that the fridge with the foam contains the CFCs, the other is that the foam itself is a product and contains the CFCs and therefore falls under 16.3. It is that fundamental difference of interpretation where the Commission continue to hold the latter view, and did not change until June 2001. If I could, as I say, just try and complete this. On 30th June - this is our eighth attempt to get resolution of it - UK officials wrote to the Commission requesting an urgent interpretation of Article 16 saying that if it was not received it would jeopardise UK compliance with the Regulation. The Commission then produced a revised clarifications paper which was entitled Frequently Asked Questions. It was placed on the agenda for the next Management Committee meeting which was March 2001 and, interestingly, the paper noted that interpretation of Article 16 was still "a grey area", those are their words not mine.

    Chairman

  29. Can I just stop you there for a second, Minister. I do not want to get lost too much in important points of detail but can I just ask you which part of the refrigerator has the most ozone damaging substances in it?
  30. (Mr Meacher) I think the answer is the foam. Certainly it is a high level of chlorine loading which comes from the foam, that is perfectly true.

  31. When this Regulation was first discussed, way back in 1999, was that fact known also?
  32. (Mr Meacher) I am sure it was known.

  33. Would I be right in saying that there is a strong adherence to the Montreal Protocol. In answer to my first question the implication you gave was that we were very much willing to take action to safeguard the ozone layer. Would it be the case that if this Regulation had not touched upon that part of refrigerators whether domestic or commercial which contained the most ozone depleting substances that the United Kingdom might have asked a question "why not"?
  34. (Mr Meacher) I entirely support the line of your reasoning, I entirely support that. The issue was whether it fell under - to use this jargon, I am afraid - 16.3 and whether it was "if practicable" or whether it was mandatory not whether it was desirable. Certainly it was desirable but the issue was if it was practicable then that would provide time for the technology which was required to achieve this, which was not present at that time in the UK, to be secured. That was the sole issue, not any dispute about the desirability of tightening and making more stringent the Montreal Protocol provisions.

    Mr Borrow

  35. Minister, you have clarified that quite succinctly but it raises one clear question in my own mind which is if there is a mandatory requirement to get rid of the foam or a mandatory requirement to do it "if practicable" then surely during this period from the summer of 2000 to the summer of 2001 there should have been a clear policy coming from your Department which said "We will have to get rid of the foam. Whether or not it is under 16.2 or 16.3 is immaterial. The bottom line is we have to put in place the measures which are required to ensure we have the capacity in the UK to get rid of the foam" and rather than wasting a full year asking about whether it is 16.2 or 16.3 before we do anything your Department should actually have been doing something to ensure that we have the sort of capacity that exists in Germany and other Members of the EU.
  36. (Mr Meacher) That is a very key question and the answer is it makes all the difference in the world as to whether it is 16.2 or 16.3. It is not a matter of triviality. What we were wanting was clarity from the Commission, only the Commission was able to provide it. The point about it being a Regulation as opposed to a Directive was it was intended, for very good reasons, it should be introduced in exactly the same way across all the Member States. For that reason there had to be clarity which would cover all the Member States. The only one who could provide that was the Commission. I have to say - and I do not say this aggressively at all - on nine separate occasions we did seek clarification and it was not until the 11th June 2001 that we obtained it. Now if we had decided, as, Mr Borrow, you are suggesting that we should have gone ahead and implemented it as a domestic regulation, I think there is no question that we would have been accused of gold plating. I hope this term of abuse is well understood in the Committee, it means where governments are demanding more than the Regulations specifically require and are imposing burdens on the industry which are costly. I think it would have been accepted with difficulty by other Government departments. Certainly I think it would not have been accepted by industry. What the recycling and foam blowing industry were saying to us was "we want certainty one way or the other". That was what they were wanting so that they would then be assured as to what was the date of recovery, when that was going to be enforced and they could make plans for it but they were not going to make plans for it if the date was uncertain, why should they? That was why the whole of the thrust of our policy was to secure their certainty.

  37. Could I just come back to the confusion over the words "if practicable".
  38. (Mr Meacher) Yes.

  39. If we assume we are looking at 16.3 not 16.2 as the Regulation that applies.
  40. (Mr Meacher) Yes.

  41. It is clear from the evidence we have received from the Commission, and to a certain extent from the evidence given to the Committee by your own Department, that other Member States viewed the words "if practicable" on the basis of if the technology existed or if the technical expertise existed to deal with the foam then that met the definition "if practicable" whereas I get the impression from the paper that your Department sent to the Committee that your Department viewed the words "if practicable" to mean if the capacity existed within the UK to deal with the foam. So it was not a matter of whether it was scientific expertise that existed to deal with whether it was possible, it was whether the investment had taken place in the UK. Would you just clarify that was the nub of the argument that your officials were having? They viewed the words "if practicable" whether the UK had the capacity rather than whether or not the technology actually existed somewhere else in Europe.
  42. (Mr Meacher) Yes. Our view of "if practicable" was based on three criteria. Firstly, the availability of the relevant technologies in the UK; secondly the economic feasibility of introducing such technologies if they were in use elsewhere and thirdly the concept of proportionality. In other words, we did believe that the question of cost versus benefit was relevant here. Indeed at one or both of the meetings of the Management Committee in 1999, the Management Committee did agree that the cost element was relevant. If you say, as indeed you did, that in other Member States they have the technology in place, I think there are four or five - Germany, Austria, Sweden, Netherlands possibly Finland - the reason for that is either that they have a private industry which deals with the particular issue of recovery and private investors in those countries have decided to take a much more proactive view and to invest in technologies in the expectation of their future market or, which I think is the case to a large degree, most of these other Member States have a government backed waste industry. We do not in this country, our industry is entirely private and of course it is a matter for them whether they decide to invest or not. I think one of the lessons I might see coming out of this whole episode is that instead of being over concerned about gold plating, I think the industry ought to understand that there are often opportunities in being able to anticipate future demand and future markets and investing in accordance with it, although they will say certainly that they want to have a measure of certainty before they are going to spend two or three million pounds on investment plants.

  43. Can I just come back with one last question. If your Department's definition of the words "if practicable" had been upheld by the Commission, in other words "if practicable" meant whether or not the technical capacity existed in the UK to deal with the foam, if that was finely interpreted as a correct meaning of that Regulation 16.3, would that have meant that so far as your Department was concerned it would have been perfectly reasonable for the UK to have continued to dispose of the foam in the same way from the 1st January this year onwards ad infinitum as it had done up until the 31st December last year?
  44. (Mr Meacher) Let me answer that by saying that the Commission's clarification paper early on in 2001 with regard to the question of what is meant by "if practicable" says - and I quote - "the practicability of recovering ozone depleting substances from products, installations and equipment, not referred to in 16.1 and 16.2 should be assessed on a case by case basis". Then they go on "Such assessments need to take account of the costs and benefits of utilising whatever technologies are available." That is the basis on which they thought that "if practicable" should be exercised. I think at that time certainly we accepted that.

    Chairman

  45. Can I just ask, in an answer to the European Parliament, Commissioner Wallström tells the Parliament in a quote that "At the first meeting with the Management Committee under new Regulation on 4th October 2000 a number of Member States explained the CFC recovery from foam in domestic refrigerators had been practicable for many years in their countries". Did the United Kingdom's officials disagree with that?
  46. (Mr Meacher) No, clearly that is the case.

  47. So you knew it was quite practical to do it?
  48. (Mr Meacher) Certainly we knew that it existed in other countries. The question was whether "if practicable" meant that the technology was in use elsewhere or whether it existed in a particular Member State and therefore it was practicable to put it into operation. That was an issue.

  49. That statement makes it very clear that others were doing it some time ago so they knew that it was practicable. Why are we arguing so much when it was demonstrable, from other Member States, that they could do it. The implications, as you said in your evidence earlier, were that this Regulation was designed to deal with the CFCs in fridges wherever the CFCs occur. Here it is palpably demonstrated it can be done. The Regulations were agreed to at a political level before so you knew it was going to be implemented. Why are we dancing on the tip of a pin arguing about it when we can see it can be done?
  50. (Mr Meacher) Because we and the Commission believed that the issue of recovery from foam was covered by 16.3 which contains the words "if practicable" and not surprisingly we wanted to know what it meant, partly because this would involve the timescale within which investors - who at that stage did not exist in the UK - would be investing in what were quite expensive plants.

  51. It seems as long ago as the 26th January 2000 you knew that this thing was coming down the track because in a letter to Mr Davies, a Member of the European Parliament, you signed a letter and wrote "The new EC regulation will make the recovery of used controlled substances from refrigeration and air conditioning equipment mandatory. This requirement does not apply to domestic fridges and freezers until 31st January 2001". As long ago as 26th January you seemed to be anticipating that all of this was going to happen. Why were we arguing about whether it was practical or not when other Member States were actually doing it? It seems to me that you knew we were going to have to do it.
  52. (Mr Meacher) You put it again in an odd way.

  53. I put it in using your words. You signed the letter.
  54. (Mr Meacher) I know but the interpretation - dare I say the spin - which you are trying to put on it is not at all appropriate. You seemed to be suggesting that we were both reluctant and perhaps not knowing the full position and therefore did not act in the way which might have been expected. The truth is it was the UK more than any other country in the European Community which was raising the necessary issue as to what the regulation which had been passed by ministers - this issue about foam never having been discussed - what it actually meant. That letter, of course, does not broach upon the issue of the recovery of foam. It just refers to the fact that as from the beginning of 2002 there would be a mandatory recovery of CFCs from fridges, of course that is absolutely the case.

  55. Why did the Global Atmosphere Division of the DETR write to Dr Batchelor of the Climate Change Unit at the European Commission in correspondence dated 11th September 2000, which seems to give the indication that they judge that all foams should fall under Article 16.3? Are you aware of this correspondence from DETR?
  56. (Mr Meacher) Exactly. If it falls under Article 16.3 then it only has to be undertaken "if practicable".

  57. Yet Member States going back to this Management Committee in October 2000 demonstrate it is practical.
  58. (Mr Meacher) We are back to the issue of what is meant by "if practicable". We have never been in doubt that the technology existed elsewhere. I repeat - as I did in answer to Mr Borrow - that there are three issues when we are talking about practicability. One is the availability of the relevant technologies in the UK. That is what most people would think is meant by practicability otherwise you have to wait to invest before it can be introduced in the UK or you have to export. If you are talking about practicability most people would take that to mean that the technology is available in the UK. That was one issue. Secondly, of course it exists elsewhere, as we well knew, you can either export to that country or you can introduce the technology from that country. The question then is about the economic feasibility and the question of cost, cost as against benefit. Thirdly the issue of proportionality. I accept the issue of proportionality, it is justified for the reasons that you have given yourself, there is significant chlorine loading in the foam and therefore it is justified so long as it is practical. Now it is technically extremely difficult, it is costly also. Those are relevant considerations.

    Diana Organ

  59. The Regulation of June 2000 that was signed up to by the UK Government obviously has massive implications, not least for local authorities at present who have now got to spend huge amounts of money which has not yet come to them storing fridges and implications for export of fridges and the whole issue has got quite a considerable impact. At the same time there seems to have been in the process leading up to and since then considerable knowledge gaps between Departments, between the industry, between Government. The UK Government signed up to this Regulation in June 2000. Are you satisfied that it was clear about the implications of what it had signed up to when it did?
  60. (Mr Meacher) Of course that is one of the lessons to be learned. We agreed this in the European Council of Ministers, the Environment Council, on 21st December 1998. We reached a common position in February 1999. There was then discussion, as I have indicated, in several Management Committee meetings where for the first time this issue of the application of mandatory recovery from foam was raised and it was never resolved. Clearly that is very unsatisfactory.

  61. The question I am asking, Minister, is does the UK Government regularly sign up to Regulations that it is not really aware of what the implication of what it is signing up to is going to be?
  62. (Mr Meacher) Of course we do not.

  63. Did you in this case?
  64. (Mr Meacher) Well, in the event it was indeed uncertain as to the application. The matter was never raised with us in our consultation with industry. They were far more concerned about methyl bromide and HCFCs. It was never discussed in the Environment Council. When it came to be discussed by officials in the Management Committee either the matter was repeatedly postponed or there were different interpretations and the matter was never resolved. Obviously that is very unsatisfactory. I cannot think of another precedent where that has happened. Obviously that should not happen and we have to take steps to ensure that does not happen again.

  65. Talking about precedents, are you convinced then that we are aware of all the implications of signing up to the Waste Electronic and Electrical Equipment Directive?
  66. (Mr Meacher) That is a very different issue for the simple reason that the Ozone Depleting Substances legislation that we are talking about here today is a Regulation. It is directly applicable in the UK courts. It differs not a jot from its application across the whole Community. There is no discretional flexibility in the manner in which it is applied whereas the Waste Electronic and Electrical Equipment Directive is a Directive. What that does is to set a broad framework with discretion for Member States as to how they apply it. Of course there is absolutely no question of setting requirements so high that no facilities are available to treat electronic and electrical equipment.

  67. You are saying we are prepared for that? Better prepared than we were for this?
  68. (Mr Meacher) I am saying we are totally prepared for that not least because the UK already exceeds the draft collection target of four to six kilograms per head of population. That is what is down as the required target, we exceed it already in the UK. I have read, like you, in the press, whether we are talking about the WEEE Directive, whether we are talking End of Life Vehicles, we are going to see mountains in other cases, that is absolutely not the case. The only reason it occurred in the case of fridges was because the interpretation of recovery from foam was left so late that we were not able to put in place the investment which would have it ready for action by 1st January 2002. That is the only thing and frankly this should not have happened. I do not think it is a good idea - I know blame culture is very popular in some quarters - I do not blame anyone but I do think we have to learn lessons. I do think it could have been decided a lot earlier, should have been, and I am sure in future will be.

  69. Can I go back to knowledge gaps, if you like, leading up to the Regulation that we are talking about to do with fridges. Dr Batchelor told the Sub-Committee that DEFRA had made it known to the Management Committee in October 2000 that the UK team would be unaware of the UK's "considerable export trade of between one and 1.5 million domestic refrigerators per year".
  70. (Mr Meacher) Yes.

  71. Why was DEFRA and the DTI unaware that so many fridges were being exported each year and that with this Regulation, when signed up to by the UK Government, that trade would cease?
  72. (Mr Meacher) I agree. I am as puzzled as you are. Of course, if the industry who are at the sharp end undertaking the export trade do not tell you, you do not know. It is remarkable and I cannot explain why it is that representatives of the waste industry that we were in regular touch with and so were Customs and Excise and so were DTI ---

    Chairman

  73. From when, Minister?
  74. (Mr Meacher) Sorry?

  75. When were you in touch with these people? You said "regularly in touch", when did this "in touch with" start?
  76. (Mr Meacher) Our first discussions I think with the recycling industry were in February 2000 about this particular Regulation.

    Diana Organ

  77. They had asked for meetings before, had they not?
  78. (Mr Meacher) I am sure there are, from time to time. If you are saying, as I am sure you are, when were you discussing this particular Regulation and its application, I think the answer is the first meeting was in February 2000 and there were several meetings thereafter. I am as astonished as you are that when 40 per cent of fridges were exported that this was not known to Government Departments or, I have to say, to other Member States where the trade was taking place or to the Commission.

    Chairman

  79. Just to carry on that line of questioning. I have a letter here dated 1st December ---
  80. (Mr Meacher) 1st December which year?

  81. 2000.
  82. (Mr Meacher) Right.

  83. Which gives the impression, or it does not give the impression, it is signed by Mr Robert Mason, it says "The export of second hand fridges and freezers ..." and it goes into some detail about what would be banned and it says that there have been widescale consultations. That must have gone on for some months before this letter of 1st December was issued. It sounds to me as at some point in the year 2000 people became very aware of this matter.
  84. (Mr Meacher) Indeed. I have just indicated that we had discussions with the recycling industry in February 2000 and I am sure several meetings thereafter through 2000. What I am saying is that prior to that apparently this export trade, on a substantial scale, was not known.

    Diana Organ

  85. Can we talk about another knowledge gap. Dr Batchelor mentioned again at another meeting of the Management Committee that two thirds of CFCs in a typical refrigerator are contained within the foam. I wonder, therefore - because all this hinges around the understanding that the UK Government has about this Regulation 16 - why were the DEFRA team ignorant of technical facts about the CFCs contained in foam? Surely if you are signing up to a Regulation that is going to deal with this you would expect somebody to have some technical knowledge about it?
  86. (Mr Meacher) Of course we had that technical knowledge. I think we would say at least half rather than two thirds but certainly 50 to 60 per cent is contained in the foam. We fully understood that. Of course that is completely different from the issue which is at the heart of this of whether recovery from foam applied under 16.1.2 or 16.3. We were not disputing the need for it, the desirability, we were questioning the basis of the date at which recovery would be made mandatory because it mattered for our industry because we did not have the technology. That was the sole issue.

    Mr Lepper

  87. It is clear that there were these two areas of knowledge about exports and about the technicalities of foam where there were gaps of understanding on the part of Government Departments. Now Dr Batchelor, who has been referred to several times in our session this afternoon, is from the Climate Change Unit at the European Commission, when he was before us he had perhaps a not very charitable interpretation of what was going on in terms of the correspondence between UK Government Departments and the Commission over these issues. He said this "If you become aware of the significant facts - the volume of trade combined with the lack of knowledge of the volume of CFCs in the foam - then you may adopt a strategy that would try to discuss the semantics of the Regulation in the hope that you might undermine that part of its compliance and therefore take you on a track that might absolve you of those difficulties you are facing". What he seemed to be suggesting was that suddenly - I did not say here is a way of looking at it - the UK Government became aware of the fact that there were things it should have known about this Regulation and did not know. It was facing a crisis. "How do we deal with it? Let us try to argue for as long as possible over the meanings of words, particularly those two words 'if practicable' and hope that we can buy time either to deal with the situation in some way, get the technology in place, or perhaps undermine that part of the Regulation where in fulfilling its requirements we are deficient currently". How do you feel about that interpretation?
  88. (Mr Meacher) This is Dr Batchelor who gave evidence to you the other day?

  89. That is right.
  90. (Mr Meacher) Yes. First of all, I accept, and have made clear, my sharing your view of surprise at our not knowing about the export trade but I do not accept the other point that you made that we had a knowledge gap, as you put it, with regard to the chlorine loading of foam. I do not believe that. I think Dr Batchelor is being a little perverse if he thinks that we were just simply playing for time. He, of course, is defending his position in the Commission, I entirely understand that and I do not want to be at loggerheads with the Commission, I simply want to explain our position. I think it is not unreasonable that we wanted clarity as to whether recovery from foam fell under 16.3 and therefore was "if practicable" and we then discuss what that means and how our industry has time to install the necessary technology or whether it is under 16.1 or 16.2. To say that we were simply playing for time, engaging in semantics, I simply do not accept. I just say to any objective observer or listener to the arguments to make up their minds. I am absolutely convinced of the reasonableness of our position. I repeat, we raised it on nine separate occasions seeking clarification. I do not think one could be more reasonable than that. Since you do mention the question of semantics, I did take the opportunity to look at the evidence which was given by Mrs Marianne Wenning and Dr Tom Batchelor to you. I must say I could not help but observe that they themselves even at this very late point in the argument appear to be contradicting each other. I am not sure if this appeared to the Committee. If I could refer you to paragraph 230, you probably have not got the text in front of you. At the end of paragraph 230 Mrs Wenning is speaking and says, and I quote her words "so foam is the product which is not mentioned under Article 16.1 and not under Article 16.2 so the recovery of ozone depleting substances such as CFCs from foam would be required if practicable", in other words under 16.3. "So for us" she says "it was never a question of whether there was the demand to recover CFCs from foam but always the question 'is it practicable?'". Now that is the most senior official from the Commission speaking and I think if she says that it is not unreasonable that I should be repeating it. However, almost immediately afterwards, Dr Batchelor in paragraph 233 says, and I quote his words, "so this Regulation by covering 16.1, 16.2, and 16.3 was very clear to us from the beginning that no matter which components of a refrigerator you were talking about, no matter how you interpreted it, that required both the recovery of the CFCs from the foam and from the compressor". I am not saying which is correct, I am simply saying that they are incompatible. I think if the Commission, even at this stage, and its most senior officials, gives an incompatible interpretation that throws a pretty searing light on the difficulties we have all had in the last three years.

  91. So despite the clarification that everyone thought had been given back in June or July last year on this issue, are you suggesting, as far as the Commission is concerned, there are still issues to be settled?
  92. (Mr Meacher) I can only give the evidence and I leave it for you, Mr Lepper, to draw your conclusions. The way we left it was that the Commission finally retreated from the view that they had taken all through that foam was a product and therefore came under 16.3, that was a view they took right up to the end, until June 2001. We accepted that view, even though we had doubts about it, because the industry wanted certainty and so long as a view was taken one way or the other about what it actually meant we were going to accept it. For that reason I am still a little surprised that the matter continues to be raised. We have accepted the position in June 2001 and we have acted scrupulously, promptly and, I hope, effectively since then to try and deal with it in the light of that agreement in June 2001.

    Chairman

  93. Minister, as we are in a sort of evangelical mood of trading quotations, let me ask you why you did not get as far as paragraph 244 of the evidence given by Dr Batchelor because he says "However we look at 'if practicable' from the EC level and we would interpret it, and I think many other Member States would interpret it the same way that if somebody can do it some way in the EC then it is practicable and we saw that not one, not two, not three, but four Member States came forward right at the beginning and said it was practicable". I am sure we could go on taking our own textural analysis but paragraph 244 seems to bring together the other two paragraphs which you quoted a moment ago.
  94. (Mr Meacher) My answer to that is if we are talking about "if practicable" then we are moving into different territory because the question then arises ----

  95. You raised it.
  96. (Mr Sharp) I did, I did. It was always our view that that was the relevant consideration. In the end the Commission took a different view and we accepted it. All I am saying is that if Dr Batchelor thinks that "if practicable" is actually the real consideration, that brings him into alignment with Mrs Wenning, I agree, although it is rather contrary to what he said a little earlier. The question then has to be decided what is meant by "if practicable". It might be a question of if that technology exists in another country, fine, then it is practicable anywhere, or it might be, yes, of course it is practicable because it exists elsewhere, but we have to look at the practicalities of investing in our own country and the timescales which are required for that.

    Mr Martlew

  97. Before you came in, Minister, we watched the recording of your performance at Question Time and it was very interesting. If you were asked the question again would you answer it in a different way?
  98. (Mr Meacher) I was asked, if I remember, by the Member for Mid Bedfordshire, who was the Opposition spokesman on the environment, and I have not had the advantage or disadvantage, whichever it is, of looking again at the script, but if I recall he raised the point that the British Government had been incompetent. I was incensed by that. Maybe I should not have risen to the bait but I did, I think it was very unfair for all the reasons I have given this afternoon. I think it is a judgment which cannot be sustained. I simply responded in accordance with the badinage which goes on in the Chamber by saying it is not we who have been incompetent, it is the Commission. I do regret that as a result of that, of course, there was a great deal of discussion about the UK Government and the Commission at loggerheads and I certainly did not intend that. I was responding off the cuff in the heat of the exchanges that occur in the Chamber to a provocative statement. Does that answer your question?

  99. Basically you are saying you would not say the same again?
  100. (Mr Meacher) I would not say it again in cold blood, no. I think there is a different way of approaching this and that, I think, is the serious way which we have now accepted.

  101. You were talking about the blame culture earlier on. You are not blaming the civil servants now?
  102. (Mr Meacher) For all the reasons that I have given I do not believe that British civil servants behaved in a deficient or improper way at all, not at all. I have looked at this with great care and I do not believe that any person on the British side has failed to do what is necessary in the circumstances. As I have said, there are lessons to be learned and I do not simply want to say "we are fine, it is all the Commission's fault", I do not want to say that. I am sure the Commission did not want this to happen. They did not expect it to happen, none of us expected it to happen. We have to learn the lessons of what has been obviously a very regrettable episode.

  103. Do you welcome these Regulations, Minister?
  104. (Mr Meacher) Do I welcome?

  105. Do you welcome the Regulations?
  106. (Mr Meacher) I do. I do.

  107. From evidence we received it appeared that the UK civil servants were arguing to stall these Regulations. Would you accept that?
  108. (Mr Meacher) No, I would not. I do not think they were stalling. I think what they were doing was saying we need to be clear about the basis on which recovery from foam, which is a technology the UK does not have, operates. That was what they were saying, no more, no less. They were asking a very simple question. We could have got an answer as early as February 1999 or on any of the eight occasions before June 2001. If we had, we would have been in a much better position to put in place what we are now trying to do but, unfortunately, it is now late in the day.

  109. If you had won the argument, how would you have implemented the Regulations regarding foam? Would you have done it or would you have said that we do not have to do it?
  110. (Mr Meacher) No, no. I fully accept the view which has been put by the Chairman and several other Members that there is a high level of chlorine loading in the foam. In fact, most of the CFCs do occur in the foam and clearly it is desirable that it should be extracted. Certainly the UK Government wants that to be done. Our concern is that we should be able to do it without fridge mountains, without finding ourselves in the position in which we now are. If we had known the position three years ago there would not have been a problem.

  111. But you did know the position three years ago to the extent that you knew that two-thirds of CFCs were in the foam. Why did you not take practical steps to ensure that we had the machinery available to extract it?
  112. (Mr Meacher) As I stated earlier, if we had then insisted with our own industry that it had to be undertaken even though there was uncertainty about the application of the EU Regulation I have absolutely no doubt that we would have been chased out of town on the grounds that we were gold-plating, we were going beyond what was actually required, we were imposing costs when in the event it might not be necessary. To require the industry to spend ---- We are now talking about eight to ten plants, they could cost two to three million each, this is a substantial cost, and to require them to do it when they would say that there was no requirement apart from the caprice of the British Government in enforcing it when no-one else was subject to the same requirement, we would not have got away with it.

  113. So you were frightened of the wrath of the industry, is that what you are saying?
  114. (Mr Meacher) Another way of putting it, Mr Martlew, is that we were sensitive to the reasonable request of the industry to have certainty. The right way to solve this is not to go ahead and do it when we do not have to, but to get certainty about what is required, get it as soon as possible, and then we all act together.

  115. Surely the right way would have been to have contingencies to argue this case, to get clarity. You knew that we needed to take the CFCs from the foam but you appear to have done nothing about it.
  116. (Mr Meacher) You say that we knew we had to ----

  117. Can I stop you. You said personally that you wanted it, you welcomed these Regulations, and that is what those Regulations did. Two-thirds of the CFCs were in the foam.
  118. (Mr Meacher) Yes.

  119. So why did you not make contingency plans to remove that?
  120. (Mr Meacher) For the reasons that I have given. It is desirable that this is done, I entirely agree. The question is the speed at which it is done and whether it is done in a manner which minimises costs for the industry and whether the industry understands that it is not unilaterally having burdens imposed on it that do not exist anywhere else in the Member States. The way to resolve all this to get certainty from the EU and then we proceed. If we had done this unilaterally, it was not just that I was afraid of the industry, I think we would have had intense difficulties in enforcing it and they would certainly have said ----

    Mr Mitchell

  121. Not more intense than now. Why?
  122. (Mr Meacher) The problems that are occurring now are not problems from the industry but, of course, problems from everyone else, in particular local authorities, questions of cost, which of course Government in the end is now having to bear.

    Diana Organ: But you have not paid the money to them yet.

    Mr Martlew: Just to jump a question, why did you not then decide instead of spending, and I am not sure how many millions, whether it is going to be 100 or 200 million or less, not just say to the EU "We cannot do it for a year. We cannot implement this Directive, we will do it as soon as we can"? We are all well aware that the French do not allow in British beef, that has been going on for about five years. Why did you not just say that we could not do it for a year? There are other countries in the EU in a similar situation as we are.

    Chairman

  123. Like the French.
  124. (Mr Meacher) Indeed. I think there are four countries, and maybe more, - France, Portugal, Ireland and Greece - who to my knowledge have so far taken no action. Of course, the consequences are that the Commission is considering infraction proceedings, and indeed it would be very surprising if they were not. In other words, they will be forced to do it and they will pay a fine for the period of time since January 2002 when they were not putting it in place. We obviously did consider whether we could postpone it, whether we could get a derogation, the fact is if we were going to go for a derogation, as indeed the French proposed, I think, at the end of 2001, then we would have to get the agreement of the Commission, and I am absolutely certain that would not have been forthcoming, and the agreement of all other Member States, and of course Member States who are sitting pretty because they have already got the technology in place would not agree. The other point, of course, about could we not have more time is if it had been a Directive we would have been in a much easier, more flexible position but this is a Regulation and it becomes applicable in the court of law of each Member State on day one. If on 1 January we had said "Sorry, we are not ready for it, we are going to spend a year", the industry could have taken us to court and said "this applies in this country, the UK Government is failing to take action, we want them to be required to take action and penalised because they are not" and they would have won.

    Mr Martlew

  125. We are only talking about it because in the written evidence, or especially in the questions you answered in the House, you said that the facilities will be ready by this spring. So it would only have been from the beginning of the year until the spring that we would not have been able to comply. That was not a great deal of time. Surely that was worth the risk instead of having fridge mountains? I am feeling quite annoyed about this because I came out into my street this morning and there was an empty fridge discarded. It was only a matter of months, we would have been complying in a matter of months. Why did you not ask for that time? Would the fine not have been less than what it has cost us already?
  126. (Mr Meacher) As I have said, we were not in a position to get an extension of time because we could have been taken to court immediately by any representative of the industry who stood to gain from this Regulation and they would have won because it is directly applicable, it applies in every country from 1 January. There is no exception to that and there is no provision whereby a Regulation can simply be extended. The only change to European legislation can be made by the Commission and, as I say, there is no question whatsoever that the Commission would not have agreed. Other Member States were happily implementing it who already had the technology and the Council having passed the Regulation is bound to enforce it.

  127. So is there any country in the EU that has taken our course of action? You say that four countries are ignoring it and other ones are implementing it, is anybody else doing what we are doing?
  128. (Mr Meacher) My understanding, and I cannot be certain about this, I am obviously dependent on the information we get from our embassies, is that there may be four or five countries that have the technology to deal with all the fridges in their own countries. That leaves ten. There are at least four who, as far as I know, have not done anything. The remainder in the middle, and we are in that area, are doing the best they can now to try and implement. We have had a mobile plant which can process 150,000 units a year in operation in Sussex since 14 March. I hope that there may be another mobile plant, I have reason to think another mobile plant may be operating before long. We expect two fixed plants, each of which can process 300,000 units a year, to be in place by the end of June. I believe we have done everything we can to put it in place. Can I just say one other thing which is quite important. We were informed, and I have an e-mail of a DTI minute which was sent to us, of a DTI meeting, quite properly, with the recycling industry, which I think was in June 2001 or thereabouts, saying that they would be able in the timescale available to produce the plant necessary by the date the Regulation came into operation.

  129. And that was not the case.
  130. (Mr Meacher) As we have found out, I am afraid, it was not the case.

    Mr Mitchell

  131. You are losing me a bit. When you came in with the clarion call "it is all the Commission's fault" that was music to my years, good stuff, but you are now resiling a bit from that because you are saying effectively we were fighting a rearguard action on behalf of an industry which was too mean to spend the money and we thought we had better help them and not make ourselves gold-plating euro fanatics by helping that resistance. You were then saying that mean industry would take you to court if you had not implemented it and would have demanded damages against you for implementing what they opposed. I just do not get that frankly.
  132. (Mr Meacher) There were a number of descriptions there which ----

  133. Which you need not necessarily agree with.
  134. (Mr Meacher) Whilst I see the thrust of the argument that is not the wording that I would use. The industry wanted certainty about when they would have to do this. For all the reasons I have given repeatedly, I think that was reasonable, we did our very best to secure it. Come 1 January 2002, if we had done nothing those representatives of the industry who already were beginning to put in place investment plans ---- Investment does not come on stream in a matter of weeks, you get technical standards, you go to tender, you find a plant which meets your specification and you go to the bank, this is a long process of preparing for a major investment. They began that in the second half of 2001. If we had then backtracked at the beginning of 2002 I have no doubt that they would have dealt with us through the courts and, I repeat, there is no question, they would have won.

    Mr Mitchell: Okay, that is a tenable position but it brings us back to "if practicable". It is practicable to run the London Marathon wearing a 120lb diving suit but you would be fairly daft to do it. If you are saying that you had to implement this thing in full including foam from 1 January, when it was not practicable in this country, why did you not ask for a delay? Certainly you would have had a strong legal position for saying "it is not practicable"? It is the euro fanatics who are trying to interrupt me again.

    The Committee suspended from 4.21pm to 4.33pm for a division in the House.

    Chairman: Minister, I know you have got other items in your diary and we would like to make progress. I will now ask Austin Mitchell if he would kindly resume the questioning.

    Mr Mitchell

  135. It is just a continuation of Eric Martlew's point which is really would it not have been a legally tenable case to ask for some delay on the grounds that practicable has to mean practicable in this country and it was not on 1 January, therefore why not delay it for six months until the machinery was installed?
  136. (Mr Meacher) I entirely agree that that is a reasonable assumption to make.

  137. It would have been a tenable legal position.
  138. (Mr Meacher) That is the problem, my advice is that it was not.

  139. Oh.
  140. (Mr Meacher) And that once the Regulation has been passed by Council which says that this becomes applicable on 1 January 2002, the only way that can be changed is if the Commission is prepared to accept the proposal and it is also agreed by all the other Member States. I repeat, there was just not a snowball's chance in hell, as they say, of the Commission agreeing.

  141. You would have been obeying part of it but you would not have been obeying the part that says "if practicable", because it was not.
  142. (Mr Meacher) I am sorry, the question was?

  143. You would have been taking out the coolant, which is the main substance of the Regulation.
  144. (Mr Meacher) Yes. If we had made such a request it would have been on the basis of "if practicable" and that we needed time, which has been our argument all along. We thought about this very carefully and regrettably we decided there was simply no option.

    Chairman

  145. Was it not the fact that you were a bit taken aback by letters like the one addressed to you on 24 November by Dixons when they said "end of free collection service, end of exports, masses of fridges piling up, please put the brakes on, consult", did that not really drive you forward in terms of your strategy from November 2000?
  146. (Mr Meacher) Chairman, well before November 2000 we had already considered ---- You are talking about November 2000, sorry, as opposed to 2001.

  147. Yes.
  148. (Mr Meacher) As of November 2000 we were beginning to become extremely concerned at the delay in reaching clarification. As I have indicated, at one of the meetings which was in March 2001 just after the date you have indicated we did state explicitly that if we did not receive clarification it would jeopardise UK compliance with the Regulation. All that we then got back was a revised clarification paper which said "this is a grey area". It noted that technologies existed and were being developed to recover controlled substances from foam but that they were not yet widespread throughout the EU. It repeated the Commission's understanding of its interpretation that Article 16.3 covered foam was in line with the Council's intention during their negotiation. It was not for lack of trying on our part to find a way through.

  149. It seems that you also had a lot of entreaties from people like Biffa and the waste industry. If you have been reading our evidence as carefully as it is clear you have read some paragraphs of the Commission's evidence you will have no doubt come across what Mr Jones of Biffa said. He was very anxious to know the details, he was very anxious to get on with the job, he could see a big business opportunity out there, he seems to have been somewhat thwarted particularly in his correspondence with your Department, if I recall. There was a long delay in giving any kind of guidelines or indication to the industry about this. Why all this delay when you were getting all these messages from the people affected by it who wanted to get on and do something about it?
  150. (Mr Meacher) I cannot believe, Chairman, that you would listen to, let me be the first to say, my long and tedious recital of what happened over nearly two and a half years and say we were in any sense whatsoever responsible for delay. I totally and utterly refute that charge. We wanted certainty. We returned to it endlessly, repeatedly. I just do not see how we could be accused of delay. We wanted clarification. In the end we accepted a definition of "if practicable", or we accepted a view of the mandatory recovery from foam which was not in accordance with our view but as the only way of finally settling this issue before we actually got to January 2002. We were assured by the industry that that was sufficient time but in the event it has turned out not to be. We did everything possible to try and clarify this and to get clarification. I do not want to go on the attack despite cajoling from Mr Mitchell but ----

    Mr Mitchell

  151. I will not go on.
  152. (Mr Meacher) I do not think fault is on our side.

    Chairman: You have roused Mr Mitchell now so I have got to let him have another go.

    Mr Mitchell

  153. I do not want to have a go at Europe, we are too adult for that on this Committee. Mr Jones at Biffa did write on 19 March 2001 and by that stage Biffa was convinced that the Regulations would apply in full in nine months, in other words they knew something you did not, and he pointed out "fridges will thus inundate city amenity sites from January next year". He was ahead of you.
  154. (Mr Meacher) Not altogether. I have great respect for Mr Jones of Biffa, who I know well. We were doing exactly what he was saying and in the light of the legal advice which we had received, our own legal advice, namely that recovery might come at 16.2, and of the strong arguments which have repeatedly been made in this Committee this afternoon that I entirely understand that some Member States were able to do this perfectly practicably, UK officials at this point, which was early 2000, informed the industry that it was likely that the outcome would be that recovery facilities would be required. We said to them that we expect that this is going to be required and their response to us was to continue to press us strongly for certainty regarding the requirement for extraction from foam as a precondition for securing the funding to invest in facilities. It is not as though we tried to conceal it from them, we did the opposite, we advised them that they probably would have to do it, but they said to us, not wanting to spend the money no doubt, "tell us when we have got to do it".

    Chairman

  155. That does not quite line up with Mr Jones' letter to Mr Lee of the Environment Agency in correspondence dated 24 May where he says "Personally I believe this nitpicking on the Regulations is a total irrelevance given the overall objective to limit emissions which are contributing to a problem which many believe is far more immediate than that of global warming". He seems to want to get on with the job.
  156. (Mr Meacher) I totally understand that point of view and, indeed, I have a lot of sympathy with it. The problem is I could not, using the EU Regulation, require the industry mandatorily to extract CFCs from foam because that position had not yet been established, the industry would have said "if practicable". We could have put in place, I suppose, a domestic regulation even in the face of the continuing confusion and uncertainty from the EU side and if we were trying to do all that, all I can say is I think there would have been great resistance within Government to forcing industry to do something which they were not required to do at considerable expense as a unilateral burden that trendy Mr Meacher in DEFRA or DETR was imposing on the industry when they did not have to. I think it would have been very strongly resisted and I think the industry would have been up in arms and no doubt making calls to very senior people in Government saying it was unnecessary and would they call him off. That was the situation that we were in.

    Paddy Tipping

  157. You told us that industry wanted certainty and you have told us twice that you did not want to gold-plate the Regulations.
  158. (Mr Meacher) Yes.

  159. Is it not a fact that the delays, and the fact is maybe they are not gold-plated, the cost of disposal is going to be pretty immense? Will you give us some figures? What are the total costs of getting rid of refrigerators?
  160. (Mr Meacher) I entirely accept your premise, and this is one of the lessons which we believe need to be learned, we need to take a more proactive view if we can to see these things as a business opportunity and less of a business burden. I think that is one of the morals coming out of this episode. However, we are where we are and the answer to your question is that we have awarded 6 million through the RFG for the period up to the end of fiscal 2001 and I am committed to making a statement, which I hope will be very shortly, about further funding available. Until I am able to make that statement I am afraid I cannot get into detail. Our best estimate, in answer to your question, is that the cost to the UK this year might be somewhere around 40 million. That will decrease over time as plant is commissioned, more plant is commissioned. I have indicated, I think, the Environment Agency has had applications for three mobile plants and nine fixed plants. Not all of those may materialise but they are serious applications to the Agency in regard to licences and planning permission. I think the costs will decrease as competition becomes established. I think it will reduce too as more fridges that do not need treatment enter the waste stream because, of course, the industry moved away from the use of CFCs and HCFCs in the mid-1990s and, and this is very important which has not been mentioned so far, my very considerable concern to restore retailer take-back, if at all possible. That, plus the refurbishment of a proportion of take-back fridges, would certainly reduce the cost to the waste stream. With regard to the last issue, which is the only one probably in my power, I am very keen of course to ensure that take-back is restored. That does depend of course on the agreement of all the parties, it does depend of course on the question of financing, that is entirely understood, but I do believe from the several stakeholder meetings, at least the three or four I have chaired, that all parties are anxious for that to happen. At least 10 to 20 per cent of the take-back fridges we believe, on historical evidence, should be able to be refurbished and sold on and not put into the waste stream. I do believe the 40 million is a ceiling rather than a floor, and I am working on it.

  161. You told us a minute ago that you had a high regard for Peter Jones at Biffa. Peter wrote to you on 30 July 2001 and he put the cost of new processing machinery per fridge at 30 and came to a total cost of 72 million. That is a good deal at variance with your 40 million although you did say your 40 million was for the current year only.
  162. (Mr Meacher) Yes.

  163. What about the total cost, to compare against Mr Jones' 72 million?
  164. (Mr Meacher) First of all, Mr Jones, I repeat for whom I have regard, is nevertheless of course a member of Biffa and part of the waste industry, and you would not expect him to produce the lowest conceivable figure, you would expect him to produce a generous figure. I would dispute his figures and I believe ours are soundly based.

  165. Tell me what your figures are. 40 million for this current year. What about the following years?
  166. (Mr Meacher) That depends, of course, on how quickly the stockpile is cleared. Of course that depends on the amount of new investment and new plant which is put in place, and it also is highly relevant to the number of fridges which are exported. The evidence I have on exporting is that the Environment Agency has authorised the export of 95,000 fridges to Germany, of which about 3,000 have already been shipped, 10,000 are in the process of being shipped and there are applications received to ship a further 170,000. Those are quite substantial figures. Our belief is that if the level of investment in new plant materialises as we expect in line with the figures, and there are nine applications and some of those are much more certain than others, I would hope the stockpile could be cleared by the end of 2003.

  167. What is the cost of storage to local authorities? What proportion of the 40 million is that?
  168. (Mr Meacher) I do not want to go into details and I hope it will be understood, it obviously is sensitive, we have to discuss this of course with the LGA, and I would prefer to do that before we make an announcement. I think I am right in saying, I hope they would not disagree with this, that the 6 million we provided for the period from 1 January to 31 March 2002 is adequate for storage alone. But, of course, you have to add for all those a processing cost and we have been looking very carefully into that. I would rather not go into figures at this point.

  169. Let me go into the figures. A three month cost of 6 million equates to a 24 million storage cost and that implies the mountain does not grow significantly more, does it not?
  170. (Mr Meacher) Obviously three months at 6 million is 24 million for a year. As I say, I do not think you can just simply make a straight line assumption (a) because of the increasing level of exports (b) because if retail and take-back could be restarted, refurbishment and selling on will make a significant impact on that total and (c) there is another source of disposal which has not been widely used and that is incineration. There are two incineration plants, one in Ellesmere Port and one I think in Southampton.

  171. The 6 million clearly is a direct result of the delays?
  172. (Mr Meacher) The total cost of 40 million or whatever it turns out to be is a direct result of us not being able - I say "us" but I include the industry, all the stakeholders - to put provision in quickly enough to deal with this and have it ready before 1 January 2002, yes.

  173. Have the local authorities had the 6 million yet?
  174. (Mr Meacher) I am not sure if they have actually had it because we have just passed the fiscal year. If they have not actually had it yet, they will have it very, very shortly. It will be paid in the form of SSAs, that is the way they prefer it to be paid, and the Government rather shares their view that grant should be paid in that more flexible form.

  175. Finally, you have stressed the take-back responsibility, clearly you think there is some responsibility on the retailers, can you tell us what you are doing to encourage that or what has been done to encourage that?
  176. (Mr Meacher) The retailers organised their own take-back prior to November 2001 when they stopped it. They stopped it for two reasons. One was the lack of the export trade because, I have no idea of the figures but they clearly made a profit out of the export trade. Secondly, on the other side of the accounts, they were then having to incur a loss because of the increased cost of disposal. They said, perfectly reasonably, they could not continue without adequate treatment facilities becoming available. Now the facilities are coming on stream, the main barrier is the increased cost of disposal. We are trying to resolve this through recycling credits for processors, but of course the system has to be very carefully designed so as to not fall foul of state aid rules, to prevent any abuse of public monies, but we are, I hope and believe, very close to being able to come forward with a statement on that. I have done everything I can to facilitate this re-starting. I have had meetings, three or four which I have chaired, and I have had private discussions with a number of them about blockages, what needed to be done. I believe they want to continue it but it has to be a system in place in which all the partners are playing their role and in which, let me be honest, the Government is providing sufficient money to oil the wheels.

  177. So in conceptual terms, you believe there is a responsibility on the retailers to take back but you are trying to set up discussions where one company is not disadvantaged against another?
  178. (Mr Meacher) Clearly if it were to be set up, all the companies would have to agree. I have no reason to doubt that they would all be willing to, I do not think there is a difference between them. On the question of whether I regard it as a responsibility, I think the retailers themselves would say that this was a facility that they offer to their customers, it is one of course which was beneficial to them because someone buying a fridge is only too pleased if the company says, "We will install it and take away your old one", so it helps sales, but I would not regard it as a responsibility, it is a commercial opportunity which they regret losing and which I am keen to see restored.

  179. When do you hope it will start?
  180. (Mr Meacher) As soon as I can get agreement to the system which in the end hinges on the question of money and being able to make a statement about the availability of funds for next year, and I repeat I hope we will be able to do that fairly soon.

  181. Is it the same timescale as having plant available to dispose of fridges "into the spring"? Is it a flexible season?
  182. (Mr Meacher) I hope not and I believe not.

    Diana Organ

  183. In answer to a question from Mr Tipping you mentioned the money that Government has made available to the local authorities who are now bearing the burden of the storage. One of the big complaints when the LGA came in front of this Sub-Committee was that local authorities had not had the money, the 6 million which was to cover the period from January to March. I believe, having spoken to my local authority, they have not had the money and we are now into the financial year April 2002. When you say there will be more money to help with storage, when do you envisage that local authorities are going to get anything, because they are hard-strapped for extra cash to cover the cost of this extra storage? You will appreciate there is an extra cost on them because they have had to be using other monies to support storage. Do you have any plans for when the local authorities are going to get their first tranche of money and when will they get the second tranche of money?
  184. (Mr Meacher) My view has always been - my understanding has always been - that they would be paid at the end of the fiscal year. Now I agree, we are just past that. Maybe the best way I can answer the question is to write to the Committee and set out exactly those dates. I am sure we can answer the first question. I can only answer the second question when I am in a position to make a broader statement.

    Chairman

  185. If you are going to do that, that would be very helpful. Could you include an element of the dynamic in it, because we have at the moment a large number of unprocessed refrigerators in various states in various locations around the country. Some authorities will have incurred debt already in dealing with that. What we really need is a cashflow to show how they will be recompensed for what they have done so far, how they will be recompensed in the future for so long as they have responsibility for the expenses, and then perhaps in formulaic terms how you envisage the system working in the future. At some point, if the take-back system kicks in again, it ought, if your optimistic scenario is to come true, to begin to be self-financing, but I am not clear whether it will be self-financing in terms of what you can then use, the recycled part of the refrigeration equipment, in the new world of controlling the emittable substances from them; that is not clear to me. Is it self-financing or will somebody have to pay?
  186. (Mr Meacher) No, it is certainly not self-financing. I was not suggesting that. Something of the order of half of all fridges - the industry may have a more accurate figure - were subject to take-back before November 2001, so that is, I think, the most that we could expect to re-institute. Of that, perhaps up to 20 per cent may be able to be used by the waste management industry, refurbished and sold on, so we are talking about probably at best 20 per cent of 50 per cent. The only point that I was making was that that does significantly reduce the waste stream and reduce the cost, but it is certainly nowhere near self-financing; there will be a continuing significant cost for one year at least, and there will be some cost, I am almost certain, into next year, but it may be much lower.

  187. You have given me the impression that perhaps after a year or two the problem begins to diminish. Who is going to pay the difference between what you can get back and what the bill is?
  188. (Mr Meacher) Until the stockpile is cleared, Government is going to have to pay. I do not think it is reasonable to expect any other party to pay. When we come to look for the key period after the stockpile has been cleared, which I am saying I am hoping to achieve by the end of 2003, obviously we then have to consider what are the appropriate arrangements beyond that point. I cannot add to what I have said today, but obviously that is an important consideration.

  189. Do you, in general terms, envisage that in future, to meet the demands for recycling, consumers are going to have to pay something up-front to somebody to cover the eventual costs of the disposal of a whole raft of items which are going to be covered by the points which colleagues will raise later in our questions?
  190. (Mr Meacher) Obviously that is for consideration. The fact is that under the WEEE Directive that is how that is going to be financed. There are proposals under the end-of-life vehicles which are along similar lines, and of course the question is how that should be financed once, as I say, the stockpile is cleared in respect of fridges. Of course, the WEEE Directive does kick in statutorily in 2005, therefore the question you are quite properly asking me, Chairman, concerns the period of 2004 and part of 2005. It is not a long period, but how we meet obligations financially in that period has yet to be decided.

    Mr Martlew

  191. Coming back to the point that some European countries are actually implementing it, some are not, was there any debate and discussion amongst Ministers on a way forward, or did each individual country just take its own decision? Whom did you consult before you took the decision?
  192. (Mr Meacher) There was, of course, discussion amongst Member States which very largely reflected their economic self-interest. The countries that had their own technology were very keen that there should be mandatory recovery of foam from domestic fridges right from the start, because they knew they could manage it and they knew they had a market for fridges from other countries. Then there were other countries like France and Finland who were saying that they needed to seek clarity about what was meant by "if practicable"; and, of course, there were countries - again France is part of this and some of the southern States - who simply did not want the Regulation to go through, did not want to take action. So there are different attitudes, but the fact is, I repeat, it is a Regulation, it is directly applicable from day one, and Member States that have not taken action face the consequences.

  193. So did you have the evidence of what the other Member States were going to do, before you took the decision?
  194. (Mr Meacher) I think we had a pretty good idea, yes.

  195. So you knew that some were going to ignore it, some were going to implement it and we were going to have a stockpile of fridges?
  196. (Mr Meacher) I would not say that we knew that some of them were going to ignore it. Indeed, I am quite surprised that some of those countries are allegedly ignoring it. I expect them to make more effort. We have been caught with the problem, we have done everything possible to meet it, and I expected them to do the same, but it appears some of them have not. As I say, the financial consequences in the end will be greater.

  197. The point which came up in an earlier meeting when we were talking to the EU civil servants was that they actually said that the plant which was being installed now will be used also for the destruction of the new fridges because there were pollutants in those as well.
  198. (Mr Meacher) That is right.

  199. Whereas in the statement you made before, you said you expected the costs to go down as the new fridges became ready for recycling. So what is your view? Will the new fridges need to be destroyed in the same manner? Will we be allowed to export them?
  200. (Mr Meacher) There will be technical standards applying to the newer fridges, non-CFC, under the WEEE Directive, which are going to require reprocessing. There is a market there, and I hope - I hope - that industry will get the message this time, perhaps quicker than they did before, that they should plan in advance to meet that market.

  201. I am sorry, I am not with you on the last point. To which market are you referring?
  202. (Mr Meacher) You yourself said that the newer fridges, under the WEEE Directive, the non-CFC fridges, will still require treatment. That is true. That requires higher standards being met. We need to plan for that and, of course, private industry needs to invest before they are required to do so. That have time - it is 2005 - but we need to think about these things in the light of what has happened over fridges.

    Diana Organ

  203. Talking about the fact that we need to know about things, could you say now, looking back in the middle of the fridge crisis, shall we say, what are the three main lessons that you have learned or Government has learned as a result of it, and how is it going to make us better prepared for when the end-of-life vehicles fiasco might hit us with the WEEE Directive?
  204. (Mr Meacher) It will not be a fiasco either for us or for ELV. I did spell out the three lessons, at the end of the memorandum. One of them obviously is that where clarification is necessary it should be done more quickly. Whatever is decided, we should not get these kinds of delay. Secondly - and this is more tentative, but I do feel this quite strongly - where an interpretation (I use that word advisedly) is made which actually amounts to quite a significant adjustment to, or amendment of, the whole thrust of a Regulation or a Directive, I think we should give consideration to the matter going back to Ministers. I have whole-hearted respect for officials but actually in the end the decision on 11 June 2001 was made by senior officials from the Commission and senior officials from Member States; it never went back to ministers; this was never drawn to ministers' attention. We never had a ministerial discussion that some countries were going to be in difficulty and how should we try to ensure at that stage they would have time; the matter never arose. When the decision was finally made, it was made by officials not ministers. Thirdly, I do think the real lesson coming out of this is that where there are technical problems, and this was a highly technical and complex regulation, there should be time written into the timescale of implementation of a regulation which allows for things to be resolved. The problem which arose in December 1998 - for reasons I well understand having been in the chair myself when one is very keen to have successes for your country - was because the Austrians were very keen to have a success in getting political agreement, in getting a common position, they wanted to move rapidly to a conclusion of this process, they did not want there to be a lengthy and time-consuming examination of all the nitty-gritty details. Later, the Portuguese, who succeeded them in the presidency - and I am not in any way administering censure at all, these are the political pressures - found themselves in the position of having to deal in conciliation with the amendments moved at Second Reading by the European Parliament and their minds were focused on getting agreement, getting conciliation and solving the problem, they were not concerned about matters which the European Parliament had never raised. So we do need to have a special provision to ensure there is adequate time for sorting out all the technical problems. Those I think would be my three lessons.

    Mr Mitchell

  205. The Portuguese have not implemented yet.
  206. (Mr Meacher) I believe that is so.

    Chairman

  207. Can I be clear? You made a very interesting point, you said that all of these problems have been handled at the level of officials and the management committee, but looking back at paragraph 11 of the memorandum which you eventually sent to us, it indicates that the Council adopted a common position on 23 February 1999. So are you saying, as the minister responsible for policy in this area, you then took absolutely no interest whatsoever in any detail, implementation, problem or anything? Your in-tray remained completely vacant of anything to do with this which might have alerted you there was a problem coming down the track?
  208. (Mr Meacher) I can safely look to you, Mr Chairman, as someone who has been a Treasury Minister and I am sure was extremely busy and who dealt with dozens and dozens, if not hundreds of issues, many of them simultaneously, the only way in which ministers can keep track on these things is if these matters are raised with them by officials. I am not complaining that these matters were not raised with me by officials, what I am saying is that many of these were highly technical issues and I think they probably should be ----

  209. The reason I asked that question is that when I was a minister in the Ministry of Agriculture, Fisheries and Food, responsible for European policies, I used to have a little diary from all the officials telling me what they were doing, which management committees they were going to, and every so often I had a meeting with them and I would say, "Tell me what is happening", because I realised the management committees were the best way for ministers to find out what was going on and what was likely to be coming up the track. So I am intrigued to know that in your area, which is absolutely deluged by European legislation, that once it is agreed at political level, you move on, so you are not being made aware through whatever mechanisms there are in DEFRA and its predecessor to look at these. This does surprise me.
  210. (Mr Meacher) The officials in the UK, as I have indicated, I repeat again, on nine separate occasions raised this with the Commission. I think they were right to do that, I do not think I could have added to that. There is a question which I think is raised under the lessons to be learnt, which is that you could argue officials should have raised it with ministers here in the UK in order to increase the pressure on the Commission; there is an argument for that. There are actually counter-arguments that in the case of this particular regulation, the Commission itself when it drew up its list of clarifications, produced 23 uncertainties, so this one which we have spent the whole time talking about is only one of many. I did, it is true, and you may be interested in this, as a result of the whole fridge episode raise with the Department how many regulations or directives, in other words all sorts of EU legislation, were currently active.

  211. That was helpful.
  212. (Mr Meacher) Shall I tell you the answer?

  213. Pages, I guess.
  214. (Mr Meacher) It is 40. What I have asked is that I want to have an implementation schedule for every one now and in the future, so I can see if there are problems arising and if any are being extended and likely to reach a point at which we are at risk of infraction. I do believe that is probably the only way of keeping control of the situation. Of course I have meetings with officials, I suspect if you ask them, you will find I have far too many meetings with officials. I think it is important to see this in context, we have concentrated on one single issue of a highly technical and complex regulation when there are 40 at any moment in play and when there are probably elsewhere within the brief, I do not know, another 50 issues going on on different issues.

    Chairman: But that is the nature of Government; lots of things going on and you suddenly find yourself in front of a Select Committee talking about fridges!

    Paddy Tipping

  215. You said you were involved in the political decision-making and then let the officials get on with it, when did you become aware there was a ticking time-bomb or the potential for a growing mountain?
  216. (Mr Meacher) I was, I think, informed about the export trade as a matter to note, not with regard to any decision being taken, but something I ought to know about, in 2000. To my recollection, I was informed that there was a problem in I think July 2001 about the managing and recovery from foam, and of course I had subsequent meetings with officials and there were a number of other submissions made in the second half of 2001.

  217. So it was after the June 2001 decision you became fully involved?
  218. (Mr Meacher) I think that is correct. If it is not correct, I will write to the Committee, but I believe it is correct.

    Diana Organ

  219. In answer to my question about lessons to be learned, you went clearly through one or two items which you wished to see, but if we could give you that wonderful thing which is 20:20 vision of hindsight, what would you want to do differently about this regulation going through? What would you personally have handled differently?
  220. (Mr Meacher) I am glad you said that because everyone of us have been exhibiting hindsight to a very high degree this afternoon.

  221. And it is wonderful.
  222. (Mr Meacher) It is an enormous privilege.

  223. Yes.
  224. (Mr Meacher) I have already said what I consider to be the three main lessons we ought to learn from it. If these were implemented, we would have had an earlier clarification within Europe about the meaning of "if practicable" and where recovery from foam fell under 16(1) to (3). We would also have had more time to sort out the technical problems, the pressure on the presidency, first of all the Austrian and then the Portuguese, would have been diminished if there was time set aside for settling all of these matters. My third point was it should have come back to ministers.

  225. You just in that reply said "We would have had this" and I was asking the question, what would you as a minister have done differently.
  226. (Mr Meacher) That is what I, as a minister, would have preferred. With the gift of hindsight, which of course none of us have at the time, this should have been discussed, I suppose you could say, at the Environment Council, but hindsight is too big a concession. The industry was not raising it with us, there were much bigger problems about methyl bromide and HCFCs. If the industry was not raising it with us, we did not perceive there to be a problem, the industry was not telling us there was a problem. No other Member State raised it, the Commission did not raise it. It is only with hindsight that these things could be seen.

    Mr Martlew

  227. You just told us you only found out there was a problem in July 2001, when was the decision taken to actually implement the Directive even though we did not have the capacity to deal with it properly? Then, when we took that decision, were we aware of the consequences with regard to the fridge mountain and the cost to the Government?
  228. (Mr Meacher) It went through the Environment Council in December 1998.

  229. Yes, it is just from 2001. You say that you found out personally that there was an issue in July 2001, is that right?
  230. (Mr Meacher) Yes.

  231. Then why did you then decide that we were going to implement the Directive? Presumably somebody came to you and said, "Yes, we're going to go ahead with this"?
  232. (Mr Meacher) I was trying to explain. The decision was made to implement the Directive in the Environment Council in December 1998. There were some changes wanted by the European Parliament, so there was conciliation, but it was finally agreed and came into force on 1 October 2000, so at that point the decision was taken. The only question was what were the implications of actually implementing it. It was only in the beginning of that year that we began to understand that there was a serious problem about which article recovery from foam came under, was it 16(3) or not.

  233. But we have just been told that the French have decided not to do anything at the present time. Are you saying that there was no direction from yourself, after you found out in 2001, about the way forward?
  234. (Mr Meacher) Sorry, maybe I misunderstood your point. Of course, the formal decision to implement it had been taken, but we now find we have got a problem, so are we, the Brits, going to implement it or not? Yes, we did have that discussion, and I did take the view that whilst I would have been prepared to look on this sympathetically - I have to say this - I was certainly told, and I agreed with the advice, that there was no chance whatever that we could escape responsibility. I learnt, I cannot remember at what point, that the French were not implementing it, and obviously it would be tempting to follow them, but I thought that kind of thing would be suicidal and it would be costly, and I do not think that that was a serious option..

  235. When you then decided to go ahead, were you aware of the consequences with regard to the cost of the fridge mountain?
  236. (Mr Meacher) As I have said, the industry did tell us in, I think, either June or July 2001 that they could meet the deadline of 1 January 2002, that they could get plant in place to deal with the problem.

  237. So you have been let down by the industry?
  238. (Mr Meacher) I do not wish to cast an accusing finger anywhere in this. I think there are lessons for us all to learn. That is what they told us, and I am afraid it has not happened.

  239. I am getting there slowly in my own mind. In July 2001 you were told that there is a problem. When you took the decision that we had no alternative, you did not think that there was an extra cost to Government and you did not think there was going to be any fridge mountain, is that what you are saying?
  240. (Mr Meacher) No, I knew perfectly well that if we did not manage to get the plant in place, there would be a cost.

  241. So you were told we could get the plant in place, therefore you did not expect the fridge mountain and you did not expect the extra cost?
  242. (Mr Meacher) That is true. That is true at the time at which we were told it, but I must admit that as we got into the autumn and the plant was not there and it was perfectly clear it was not going to be there, I became acutely conscious that there was going to be a significant cost to Government.

    Chairman

  243. Minister, you really have dragged your heels over this, because you told the Committee earlier on how you thought desperately for about year to work out what this would signify, and then magically the tablets of stone were handed down in June 2001. Dixons, in their evidence to us, furnished us with copies of letters, extensive correspondence with your Department. 18 September 2001, in a letter with Mr Mark Souhami, the Deputy Chairman of Dixons' signature, he says, "I am afraid that these meetings give me no great comfort either that officials understand the scale of the issue or that they are willing to assist us in finding solutions to the conundrum before us". Then I go on through this mountain and I still find again, under Mr Souhami's signature, a letter of 17 December 2001, in which he is pleading with your Department for a solution. He concludes and say, "You will forgive me if I say that I cannot understand why this nettle cannot be grasped." Now here we are in April 2002. You had the light shine upon you in June 2001. Ten months have gone by and we are still talking about a hoped-for announcement. Do you really think that that was as quickly as you could have produced some kind of workable strategy to deal with this problem?
  244. (Mr Meacher) The truth is that we needed no reminder from Dixons to know that we had a serious problem upon our hands in June 2001.

  245. But they kept writing letters about it. They obviously felt there was a need to remind you.
  246. (Mr Meacher) I am sorry if the author of the letter felt that he was not getting a response from the Department. I do not know the details. Obviously I regret that.

  247. The Permanent Secretary does, because he got these letters which were addressed to him.
  248. (Mr Meacher) Okay. I am aware of these letters.

  249. Do you not talk to the Permanent Secretary?
  250. (Mr Meacher) I am aware of these.

  251. You are now?

(Mr Meacher) I am aware that there were letters sent by Dixons and that they were discontented towards the end of 2001. I am perfectly well aware about that. What I am saying is that we knew we had a problem from the middle of 2001, and we did our best to deal with it. The problem is that you can only get investment from private industry if they know that there is a market there. They could have anticipated that there was a market there, as from June 2001. I was doing my level best to try to get companies that have a track record in this involved and trying to invest. As I say, when you are going to invest 2 million, 3 million, and if someone else is going to bear the cost - namely, the Government - you ensure that every condition is in place before you take the plunge. You do not have an economic incentive to get on with it. That is the problem. The only way in which I have been able to try to speed this process up is through saying to the Environment Agency, "When you get applications, obviously you've got to look at all those applications for a licence, you've got to look at those rigorously and stringently, no backing down on the rules, but be as helpful as possible, provide all the information required and try to facilitate these investments as best we can." The other requirement is, of course, the money. I am in no doubt about the importance of being able to place on the table a significant sum of money, but that has to be negotiated and that, of course, is quite difficult. I have been wrestling with that for some considerable time.

Chairman: I think that that is a good place, two days before the Budget, to draw our questions to a conclusion. We shall take that as a representation, and be sure that the Chancellor is made aware of the text of the evidence, and that all that you have said is available for him to view in framing the final text of his Budget speech. Can I thank you and your officials for coming here and for spending so much time. We cannot take away that which you have said, but we can offer you the facility to add to it if there are other things on which you kindly promised us further information. Thank you very much for answering our questions so fully, we appreciate it.