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Baroness Byford: My Lords, will the Minister indicate how soon that consultation will take place? Will we be able to reflect on it before the Bill clears our House?

Lord Whitty: My Lords, on the totality of the strategy, the answer is no. If further funding implications arise for the delivery of this part of the strategy, clearly that may be touched on during the course of proceedings on the Bill. I do not think that the full assessment of the implications of the strategy unit report will be available before this House has considered the Bill.

There were various comments on the commercial dimension of the Bill. The noble Baroness, Lady Howe, in particular gave a number of interesting initiatives and examples of commercial operations that had seen the importance of the approach and delivered outcomes that also cut their costs and contributed to their profits. Before we broke for the Statement, my noble friend Lord Haskel conferred a welcome from the EIC and the benefit for poorly performing industries once they recognised the importance of dealing with the cost implications of their own waste management. Dealing with waste positively in a commercial sense should not necessarily be regarded as a negative; there are great positives for the bottom line in terms of dealing effectively with waste. I refer to waste minimisation and the optimum way in which to dispose of the remaining waste.

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The noble Baroness, Lady Howe, referred to aspects of consumer behaviour and related that to producer responsibility in various areas, one of the most interesting of which was newspapers. The noble Lord, Lord Stoddart, also referred to that. The House may wish to know that we reached a voluntary agreement with the Newspaper Publishers Association—its members are not always the easiest people with whom to reach agreement—in April 2000 that we would increase the recycled content of newsprint. The first target has been exceeded. We set a target of 60 per cent for the end of last year but the figure was 63.5 per cent. That is a very positive story of co-operation between government and industry.

The option of charging households for waste has been around for some time. There are problems with it; I note what the noble Lord, Lord Greaves, said about the Liberal Democrat position. It is also not our view that we should directly charge individuals for waste. However, there are incentive schemes, which are suggested in the Strategy Unit report, which we will examine. They might help to deliver the situation to which the noble Lord, Lord Luke, referred in terms of household differentiation of waste in this country, which is much less developed than in parts of the Continent. That has greatly helped those countries to secure a better recycling achievement than this country.

The Bill involves various quasi-constitutional points. The noble Earl, Lord Mar and Kellie, referred to the Scottish situation. This is even more an issue of subsidiarity in Scotland; I refer in particular to Clackmannanshire. I do not believe that it is appropriate to delve too deeply into that. As he rightly said, the Bill involves a benign use of the Sewel motion and provides the framework; after that, the Scottish will take their own decisions about how to deliver local authority allocations.

The noble Baroness, Lady Byford, and the noble Lord, Lord Luke, referred to the position with regard to Wales and asked why we needed Clause 2. That spelt out a particular position with regard to waste management strategies for local authorities in Wales. That is in this Bill because, as the noble Lord knows, the settlement in Wales does not provide for primary legislation in Wales and that approach would require primary legislation. After substantial discussions in Wales between the Welsh authorities and the Welsh local authorities, it was agreed that the requirements for waste management strategies should be part of the process. The situation is not precisely the same as that in England. In order to be able to do that in Wales, some primary legislation is required.

Also on the Welsh front, I confirm to the noble Lord, Lord Livsey, that the secondary legislation that would be appropriate for Wales under the Bill will be subject to appropriate consultation with the Welsh Assembly and will have to go through the relevant process there.

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Another issue on the waste side is illegal waste fly-tipping. I recognise that that is a major problem. It was referred to by the noble Viscount, Lord Goschen, the noble Lord, Lord Greaves, and the noble Earl, Lord Mar and Kellie. It is important that the Environment Agency and local authorities have the powers and the ability to enforce in that area. The Strategy Unit's document also covers that and it has recommended more rigorous prosecution of fly- tipping offences. We need to consider that very carefully. Already, we are amending the Environmental Protection (Duty of Care) Regulations 1991 to help local authorities to do more to tackle the problem. Amending them will also help local authorities to pursue fly-tipping offences where they find evidence. My notes refer specifically to evidence that the noble Viscount was pursuing as a community activist in Wokingham and to a business's letter headed paper being connected with a fly-tipping incident. I hope that in future such evidence will be sufficient to lead to prosecution. He was referring to the Environment Agency but those powers relate mainly to the local authority. I will write to the noble Viscount if the situation regarding the Environment Agency is significantly different. We already have it in our sights to tackle that. If the process of regularising the disposal of waste on other fronts leads to illegal tipping, that part of the strategy would clearly need to be developed further.

I accept that some of the increase in fly-tipping may reflect the landfill tax but the bulk of additional fly-tipping appears to involve household waste, which, as the noble Viscount, Lord Goschen, accepted is not directly affected by the landfill tax. Measures to change the behaviour of households in disposing of their waste are also required.

I turn briefly to the emissions trading part of the Bill, which was generally welcomed although there were a few queries about it. I thank my noble friend Lady Thornton for giving me credit in this area, but I am not sure whether it is entirely deserved. Bringing the market to operate in terms of meeting emissions targets is an important initiative in this country and it is now coming to fruition. The noble Earl, Lord Mar and Kellie, asked whether the participants who voluntarily went into the scheme knew that there would be a compulsory underwriting of it. The answer is that that does not make the system mandatory; it means that the penalty—the sanction—for developing a voluntary system has a statutory base. That was understood from the word go when they entered it. They advocated that legislation was needed to ensure that one could apply those sanctions. The Bill does not make the UK emissions trading scheme mandatory but provides a statutory base for the sanctions for a voluntary scheme. The contracts under the scheme, freely negotiated by those who entered it, are binding. The contracts difference between participants and the Government refer to the difference and state that statutory penalties will be introduced as soon as Parliament allows; we are fulfilling our part of that contract.

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The noble Lord, Lord Livsey, asked about compatibility with developments in the EU in terms of trading directives. They are not directly related but they are not incompatible either. The UK scheme was designed well ahead of the EU scheme and there are some differences between what is currently being proposed in the EU. First, the scheme will be mandatory when it reaches the end of its development. Emissions from electricity generation will be included or allowed; the EU scheme will apply only to a restricted subset of sectors rather than the industry-wide or economy-wide scheme that we are proposing. We believe that the potential incompatibility is being ironed out and there should be no basic incompatibility between what eventually emerges from the EU and our scheme. Britain will therefore be leading in this regard. As I said earlier, the approach will bring great benefit in terms of our emissions targets and it will provide British industry and the City of London with great experience in dealing with a trading scheme well ahead of the rest of the world.

Finally, I touch on the points raised by the noble Lords, Lord Dixon-Smith and Lord Greaves, about the points in the report of the Delegated Powers and Regulatory Reform Committee. The first point involved the fact that this was a skeletal Bill. Both noble Lords will recognise that it is skeletal because it provides for the devolved functions and therefore does not contain as much detail as if it had been solely an English Bill.

There are not a huge number of regulations under the Bill. No doubt when we come to discuss the clauses under which regulations are proposed we shall discuss the nature of the regulations at that point, but it should not be accepted that there will be a huge swathe of new regulations. The points raised by the Delegated Powers and Regulatory Reform Committee related to the penalty provisions rather than any other powers under the Bill. As I said, I have no doubt that we shall debate those when we come to the appropriate clause in Committee.

I look forward to Committee stage. I hope that noble Lords who have participated in the Second Reading will feature in the Committee stage debates. It is an important Bill. It may not be quite as ambitious as delivering the totality of the waste strategy—as some noble Lords requested it should—but it is a very important building block towards delivering an effective waste management strategy in this country, in fulfilling our commitments under the Kyoto Protocol and for meeting our emissions targets.

The Bill does so in a way which allows the market to operate rather than, as the noble Lord, Lord Dixon-Smith, suggested, by Soviet-style direction. Quite the opposite. It is a mixture of government initiative and the operation of the market. In that sense, I hope that the Bill will commend itself to all sides of the House.

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On Question, Bill read a second time, and committed to a Grand Committee.

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