The problem is not only that the hon. Gentleman’s constituents have to live next door to those illegal dumps, but that there is the expense of clearing them up, which falls back on the taxpayer.
There is another widespread scam. This morning I tried to find the figure for the number of fires at waste transfer stations, but I could not. For the uninitiated, I will explain. Having been a chair of public health in Newcastle, I could bore on about waste: when waste is being transferred, it usually does not go straight to the actual site, but goes first to a waste transfer station where it is either sorted or graded into different things. The number of fires that occur at waste transfer stations is out of all proportion to the probability of that happening. The reason for that is that once there is just a pile of ash, there is nothing to dispose of. That is the problem, and, again, organised crime is involved in that.
We have had some instances in County Durham of the point raised by the hon. Member for Newark (Robert Jenrick). There are frauds such as those he describes—to be fair to Durham police, they have cracked down on some of the individuals concerned—but there are some people who have bought into this business. If we look back at what they did or how they got their money, we find serious questions about whether they should be allowed anywhere near the waste industry.
We all know why, for example, in the 1970s the mafia got control of waste in New York: because there is money to be made in it. It is the same in this country, but unfortunately we are not taking the robust approach needed to address that.
One of the issues is about who is responsible for that. The hon. Gentleman mentioned the Environment Agency. It is a good organisation in one respect; it is full of some very good and committed people, but they do not have the killer instinct to be enforcers. The agency needs to
have a certain mindset and to take robust action, rather than just looking at the odd illegal site. It needs to closely monitor some of the existing organisations. Without that mindset and enforcement, this will never succeed.
This is also a matter that falls between the Environment Agency and HMRC. I give credit to Durham police for taking a lead in trying to get people together and for saying, “Look, wait a minute. We know that the people behind this are involved in x, y and z, which has mostly nothing to do with rubbish. It is to do with other serious organised crime.” The police have worked with HMRC and others and tried to concentrate on these issues.
I have a concern about HMRC’s approach to this problem, and the Minister might want to reflect on it. I shall not go into details because the case is ongoing, but when I raised one particular matter with HMRC, I was told that no enforcement action would be taken because the fraud was not worth more than £20 million a year. That seems like a lot of money to me. Another case that is ongoing at the moment involves fraud totalling £78 million a year. I wonder whether these decisions are the result of a lack of resources. I have spoken to a lot of the investigators in HMRC and I pay credit to them for the work they do. Some of the people they are dealing with are very dangerous, and it is a complex matter to put these cases together. What we need in this country is a joined-up approach by HMRC, the Environment Agency and the police. I had a meeting earlier this year with the Minister for Security, the right hon. Member for Wyre and Preston North (Mr Wallace) to discuss where all this money goes to. The amounts being generated are huge, and I have seen evidence that it is going into the drugs trade or other illicit organisations. That has an impact on society.
There are some things that could be done. As I have said, we need to adopt a joined-up approach—dare I say the Eliot Ness approach—and take a robust line on this. As the hon. Member for Newark has just said, the people who have to pay for the clear-up are the taxpayers. In many cases, that involves local authorities that are already under a lot of pressure. We need to adopt a hard-headed approach, and the Minister needs to look at the figure of £150 million. I think that the figure is way more than that.
Self-certification and the loss on ignition test just need to be binned. I know that there are pressures, and people have talked about cuts in HMRC—[Interruption.] Oh, there is more yet, don’t worry! The hon. Member for Chelmsford (Vicky Ford) is looking exasperated. What is needed is one single rate for landfill, whatever it is. That test is not enforceable; every shipment going into a landfill site would have to be tested. People have talked about leaving this up to the industry, and I am not besmirching the reputation or integrity of any particular party, but it is open to anyone who wants to do so to abuse the system. I therefore think that those tests need binning, and that we need one single rate.
People ask whether landfill sites could be monitored. Yes, we have the technology. I have raised the matter with the Minister’s policy people and asked whether we could have a system similar to those at weighbridges and slaughterhouses in which cameras can record how many vehicles are going into a site. In one case that I have examined, the owner was clearly not paying the
landfill tax despite the fact that a ridiculous number of vehicles were going into the site. If we had people in Revenue and Customs checking these things, I think it would pay back very quickly.
The other thing is the checking of sites. The Environment Agency has responsibility for most of the checks, but I do not get the sense from HMRC that there is robust enforcement even when questions are asked. The right hon. Member for Loughborough (Nicky Morgan) raised the issue of retrospection. Can I suggest to the Minister, if he wants to get some back tax in, how he might do it? Once a landfill operator has finished with a site, it puts a cap on it, and that is the end of it. I have been told of an operator in the north-east that has done that, and I know from evidence I have seen that it did not pay the right tax. The question was raised with the Environment Agency and HMRC of how to make sure the right tax is paid. The easiest thing is to put a borehole through and check what is actually in there. If we did that on a few sites, I think we would find that what incurs the lower rates is not what is there. That is an important point.
In policy terms, as I have said to the Minister’s policy officer, we need to make the producers of the waste responsible for where it goes. At the rates that some waste collection organisations advertise, they could not possibly make a profit if they were paying landfill tax. The problem is that because local government and others are being squeezed, many local government organisations have got into bed with these operators because they charge the lowest rates, but they can do that only because they are either not paying landfill tax or paying it at the incorrect rate. The onus should be on large organisations to take responsibility for what happens to their waste; their responsibility should not end once the waste operator has taken it away. The rates being paid by quite a few public bodies in the north-east of England make one wonder how these organisations can be making any money, if they are paying landfill tax.
Operators are also making claims that are completely unachievable, such as 100% or 98% recycling of commercial waste, which is not possible. If that is the case and they are collecting at a certain price, what is happening to the 10% or 15% they cannot recycle? Its collection would be completely uneconomic if they were paying landfill tax. If HMRC had its eyes open and looked at some adverts, it would be thinking, “Wait a minute. There’s something wrong here.”