Economy: Sustainable Jobs

Earl of Shrewsbury Excerpts

Thursday 27th June 2013 Lords Chamber

[The Earl of Shrewsbury]

My Lords, I congratulate the noble Baroness, Lady Brinton, on instigating this important debate and thank her for providing your Lordships with the opportunity to discuss a subject vital to the economic well-being of this country.

In these austere times in which we live, it is not rocket science to realise that jobs are extremely difficult to come by and that each and every opportunity that exists to create jobs must be exploited to the full. SMEs provide vast opportunities for job creation. They simply must be encouraged, be it through the ability to borrow funds for expansion, or through the simplification of bureaucracy and unnecessary red tape, or excessive interference by Government. I will address that latter point in this debate.

I live in an industrial part of the West Midlands, very close to JCB, which is an enormous success story in Staffordshire. I agree entirely with what the noble Baroness said about apprenticeships and the creation of such—and JCB creates them. It employs about 10,000 people and has an engineering academy, which is to be applauded. For many years I have taken a considerable interest and have acquired friends in various industries both within and outside that region. I am well aware of the many obstacles which normally face SMEs. Recently I have been made aware of situations in which a government agency is making life exceptionally difficult and, tragically, sometimes terminal for some businesses in areas where it is difficult to obtain employment. That body is the Environment Agency.

I would be among the very first to acknowledge the absolute necessity of having an agency that is charged with protecting the environment and regulating the various industries which deal in potentially hazardous material and the recycling and disposal of such materials. However, I am aware of a number of cases where the all-powerful EA has acted in a thoroughly heavy-handed manner and shown itself to be the judge, jury and executioner. I have attended meetings with the EA and have received details of actions taken by it with regard to one particular firm based in Sheffield, the 4R Group. I have no interest in or connection with that company, but it contacted me on the recommendation of a mutual friend.

The company alleges that the EA’s local officer took action which is most likely to have the effect of closing down that business, rendering the staff unemployed and meaning that waste material that was being processed and sold to the agricultural sector as a thoroughly useful fertiliser will now be forced to go to landfill. In short, it is alleged that the EA posted some details on its website without any adequate consultation, which had the effect of frightening off the customers of the company. Those customers were fully satisfied with the product that they were purchasing but did not wish to risk the wrath of the EA, which can be very dangerous indeed. However, the company had the benefit of the opinion of one of the absolute experts in that field, the leading QC Stephen Tromans, and other expert legal advice, which stated that it was complying with the European directive that governs this area. It appears that the EA takes very little notice of the European directive’s spirit and purpose. Instead it follows entirely its own agenda, leaving its target businesses to let the issues be tested in the courts. Such actions are sometimes lost by the EA and sometimes not brought by the business due to the vast cost of litigation and because the EA appears to have bottomless taxpayer-funded pockets. This is disgraceful. These are small businesses that are struggling to survive.

Add to this sorry tale the bureaucracy and red tape involved by the agency, with the very lengthy times of turnaround of applications for end of waste status, and it is easy to see that the agency’s actions, repeated in numerous cases throughout the waste recycling industry, are holding back opportunities for the employment of hundreds of people while sending thousands of tonnes of perfectly recyclable material to landfill. That is bad for the economy, bad for the environment and bad for employment, and thoroughly bad for the nation’s finances.

In the case of a company with which I frequently discuss matters of this nature, the agency’s intransigence and plain obstructive behaviour regarding the classification of a recycled material which enjoys the support of major cement manufacturers in the UK has cost the business around £4 million in potential profit over the past three years, with the consequential loss of tax revenue to the Treasury and potentially an extra 15 to 20 jobs in a region that needs them badly.

In conclusion, the examples I have given point fully in the direction that the Government need urgently to commission a root and branch review from the very top to the bottom of the Environment Agency, to investigate its practices and culture and fix whatever is wrong. Until that is done, job creation and profitability in the recycling industry will suffer, and with it the economic well-being of this country.