Environment Bill (First sitting)

Kerry McCarthy Excerpts

Committee stage & Committee Debate: 1st sitting: House of Commons
Tuesday 10th March 2020 Public Bill Committees

[The Chair]

Ms Norberg, do you wish to add anything before I go back to the Minister?

Signe Norberg: I would like to add that our business members, who represent around £550 billion of global turnover, do support the Bill. They really want to see a robust environmental regime, because they fundamentally believe that environmental policies make clear economic sense for them. It is also better for the overall environment.

On why businesses want to see that happen, it does not just make clear economic sense; it also provides a stable environment in which they can invest in their workforce and in green products and services, and innovate their business model. If the Bill clearly sets out what is expected and by when, and what the targets are in the intermediate term to meet these objectives, it will help businesses to adjust their business model, where needed, but also to go beyond the targets.

We would certainly support some of the points that Ed has made about objectives. We would also like to see the interim targets strengthened further, because when you have certainty about what is going to happen in the next five years, it helps you also to look at the long-term targets that are 15 years ahead. If there is also something around remedial actions—so that when it looks like the intermediate targets are going to be missed, action will be taken—that will give businesses certainty around what is expected of their sector, but also about how they fit within the overall environmental framework.

[Kerry McCarthy (Bristol East) (Lab)]

Q Leading on from what you were saying about the interim targets, how do you strike the balance? At the moment, you have very long-term targets of at least 15 years. I accept what the other witnesses were saying about how that gives business certainty, because decisions are made on a long-term basis, but if your target is way into the future, the danger is that you do not drive progress in the interim. The Aldersgate Group clearly supports interim targets.

Signe Norberg: Certainly, and that stresses the importance of the interim targets, with the long-term targets being, as they should be, long term and indicating the direction of travel. The interim targets help to drive progress in the intermediate term, but also help us to see where we are and what we need to do to put us back on track. If we strengthen the interim targets, that will certainly be something that we know our businesses would welcome, because it not only provides the direction of travel but helps them look at their own model.

Martin Baxter: We fully support long-term targets because they give the strategic predictability and confidence for business to invest over the long term. The importance of interim targets is that they determine the pace at which we need to make progress, hence the need for a robust process for setting the long-term targets and involving businesses in the interim targets, to ensure absolute clarity about the likely investment needed to achieve progress at the rate we need. If we want to speed up progress, the question is, “How much will it cost and where will the cost fall?” We have to make sure that businesses are part of owning some of these targets, because they are the ones that will have to make the investment to deliver them. They have to understand what changes will be needed and what policy mechanisms might need to be introduced to ensure that that can all be achieved. That is where the role of interim targets and their link to environmental improvement plans, and the robustness with which those interim targets will be set, is really important.

[Kerry McCarthy]

Q Mr Lockhart-Mummery, you also spoke about objectives. I am interested to know how those objectives would fit with targets and interim targets, and how that would pull the whole purpose of the Bill together. Perhaps in your answer you could say a little bit more about that as well?

Edward Lockhart-Mummery: Absolutely. The objectives would guide how the targets and interim targets were set. The Secretary of State, when setting targets, would have to think how those targets would contribute to meeting the long-term objectives. That would be the legal mechanism. When stakeholders were having discussions with Government, everyone would understand the purpose of those targets and that would temper the discussion, because everyone would have a clear vision for what they were.

Objectives could also determine how principles and environmental improvement plans are applied in the Bill, so that when you are developing environmental improvement plans, you are also thinking, “What are we trying to achieve through this Bill?”, when you are applying principles and when the OEP is exercising its function. Thus, everyone is clear on the purpose of all those processes in chapter 1 of the Bill, which is the governance framework, and those objectives link to how the Government applies those processes, so that it is clear externally what we are trying to achieve. Then businesses, local authorities and other organisations know what we are trying to achieve through the Bill and know that when Government pull all those levers, it is all trying to go in a particular direction.

[Kerry McCarthy]

Q But you would also support interim targets further downstream?

Edward Lockhart-Mummery: We definitely support strengthening the targets. This is something we have discussed a lot in our group, and there are slightly different views of exactly how you do it. Some people would support the targets’ being legally binding, and others say that the final targets should be legally binding, but on the interim targets there needs to be more transparency. Then, if an interim target is not met, it could be that it triggers more of a reporting process, where the Government say, “We have missed the interim target. This is why, and this is what we’re doing about it,” rather than their being legally binding.

Potentially, if you made those interim targets legally binding, it could have perverse effects. Government might be a little less ambitious in setting interim targets, because it is always harder to know exactly what you are going to be able to do in the shorter term, particularly when some things require a lot of capital investment. If the target is to increase recycling rates, that requires a lot of capital investment or whatever.

There are some questions about exactly how you would set those interim targets. Because they are nearer term, it is more likely that the same Government will be in power when they are met, so what you do not want is for them to end up being very unambitious in setting the targets. A transparency mechanism would certainly be very good.

[Richard Graham (Gloucester) (Con)]

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

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

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

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

--- Later in debate ---

[Cherilyn Mackrory (Truro and Falmouth) (Con)]

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

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

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

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

[Kerry McCarthy]

Q Can I ask the FDF about food waste? It is mentioned peripherally in the Bill in terms of the separate collections and so on, but there is nothing more. There is a food strategy being worked on by Henry Dimbleby and others, which may have stuff in it. Is there scope for more specific provisions in the Bill? For example, Courtauld is still voluntary. Progress is being driven by the good guys rather than there being an obligation on everyone. You referred to the figures produced by WRAP. Could the Bill do more on that?

David Bellamy: We have not identified any shortcomings to date. Obviously, there are voluntary approaches. You mentioned WRAP, and there is also the UK food waste reduction road map. Companies are signing up to that in increasing numbers and manufacturers are making good progress. We are expecting a consultation on food waste reporting from the Department for Environment, Food and Rural Affairs soon, and there is no need for primary powers in the Bill to do that. There was talk of the potential for powers on setting targets down the track. I am not sure where the Government are on that at the moment.

We have not identified any shortcomings as such. The inertia is there with the UK food waste reduction road map, and knowing that food waste reporting is going to come in as planned as a legal requirement in line with the road map.

[Kerry McCarthy]

Q Is that the mandatory food waste audits? When you refer to reporting, are some companies such as Tesco already doing audits of key items at least? Do you mean that at least the big companies report on the amount of food waste in their supply chain?

David Bellamy: Yes. It is defined in the consultation, but certain companies of a certain size will be required to report their food waste. The idea is that they would do that in line with what they report under the road map, or what they do under Courtauld currently continues, so that there is no disconnect.

[Kerry McCarthy]

Q So basically it is making mandatory what some companies do on a voluntary basis.

David Bellamy: Yes. That is my understanding of the Government’s proposals.

Andrew Poole: Making it mandatory would be a sign of failure potentially at a certain level, in the sense that we can encourage them to do it voluntarily. I come back to the idea of making it easy for people to do it. Once we get to the mandatory stage we would then be arguing about issues. We picked on the reporting requirements of things like that. If it was risk-based and proportionate, that would be the way to go. We would hope that businesses in particular would be doing this voluntarily, to begin with.

[Kerry McCarthy]

Q What often happens, though, is that some companies do it. There has been an issue in the past over things being reported in aggregate rather than identified specifically, and there has been no naming and shaming of individual supermarkets. Anecdotally, some supermarkets are clearly driving down those food waste figures while others are not doing their bit. That is always the problem with the voluntary approach.

Andrew Poole: It is quite important with those big producers that many of these requirements are not pushed down through the supply chain. If you are a small supplier supplying a big supermarket, one of the requirements is to deal with a proportionate and risk-based reporting mechanism. That has to be borne in mind if you are targeting big supermarkets such as Tesco. They have to report everything, and the burden is passed down through those that supply them as well.

[Kerry McCarthy]

Q Are you saying that it is not a good thing?

Andrew Poole: I am saying it would have to be looked at quite carefully, so that the requirements were proportionate and the supply chain was taken into consideration as well.

[Saqib Bhatti (Meriden) (Con)]

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

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

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