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Lord Dixon-Smith: I knew that this group of amendments would jump up and beat me about the head but I do not apologise for tabling them. Two or three serious points arise, and barring one's own allowances from the future seems to me to be extremely hazardous. That is the first point.

Perhaps strategically more important is the point raised by the noble Lord, Lord Greaves, about the question of mileage travelled. If we are to have targets to send less waste to landfill, then we must have new plant in order to handle that material and that plant should be constructed where the waste arises.

The amendment as proposed is a pot shot and it is designed to provoke a debate. I would be the first to acknowledge that, in sum, the amendments are even more Stalinist than the Bill. They simply apply at the local level what is being applied to the disposal authorities by, in this instance, the national authority. There is a national authority for Scotland, for Wales and for Northern Ireland because that is the way that the Bill has had to be drafted.

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My noble friend Lord Hanningfield talked about the difficulties of dealing with this matter on a shire-county basis. The reality is that, in effect, a waste disposal authority in a shire county will have to impose this type of restriction on the waste collection authorities within its area. A deep problem lies in that. I certainly know of one situation where waste is taken much further than is expected or is necessary. The collecting authorities have realised that if they go down country roads and through villages to a disposal facility 20 miles away, they do not become jammed in on a crowded motorway in taking the waste where they are supposed to take it only 12 miles away.

As my noble friend Lord Glentoran said, if you collect waste, the problem is that no one will tell you where to tip it. It is tipped in the most convenient place but that may not be where it is supposed to go. However, people who operate the disposal facility will be happy to take it because, so far as they are concerned, it is all grist to the mill.

Therefore, a problem lies behind the amendment, and I do not apologise for giving a slightly long explanation at the end before withdrawing it. Some points need serious consideration. Certainly, strategically the mileage issue will become very important. I entirely agree that the figures are purely arbitrary, and one needs to think about that. But the Bill needs to contain a strategic aim to reduce such things because they form yet another type of waste. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 11 and 12 not moved.]

5.30 p.m.

Lord Dixon-Smith moved Amendment No. 12A:

    Page 4, line 5, at end insert—

"( ) The allocating authorities shall indicate the allowances for each year to 2020."

The noble Lord said: Amendment No. 12A simply indicates what the noble Lord, Lord Whitty, has already said will happen. If I understand matters correctly, he has said that the Government will make notional calculations of where we should be in 2020. If that is so, I do not need to argue this point any further. I should be grateful if the noble Lord could confirm that that was what he said at an earlier stage. I beg to move.

Baroness Farrington of Ribbleton: Perhaps I may clarify that my noble friend Lord Whitty explained the Government's position with regard to England. Of course, not all constituent countries of the UK will necessarily take part in the trading scheme. It is therefore inappropriate, to remove the ability of the Parliament and Assemblies to act flexibly according to local circumstances. However, the assurance that the noble Lord, Lord Dixon-Smith, sought was with regard to England and that can be given.

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Lord Dixon-Smith: I am grateful for that assurance. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 agreed to.

Clause 5 [Alteration of allocations under section 4]:

[Amendments Nos. 13 and 14 not moved.]

Lord Dixon-Smith moved Amendment No. 14A:

    Page 4, line 16, at end insert—

"( ) In the event that the allocated amounts are less than the amounts already contracted to be disposed of by landfill operators and, as a consequence, compensation is payable, the allocating authority will indemnify the waste disposal authority."

The noble Lord said: This, again, is a probing amendment, but it has a serious point behind it. Many waste disposal contracts are made for periods of 30 years; quite a lot are made for 25 years. It is rare to find one for less than 20 years. I happen to know of a number of local authorities that have been turning over their contracts in the last two or three years and contracting for such very long periods of time.

I cannot expect an answer to the technical nature of this question, but the problem that may arise is that more contracts have been made to dispose of waste than will be permitted by the scheme now being advanced in its later years. If so, unless some other accommodation is made, a contractor may have a contract to dispose of, let us say, 100,000 tonnes of waste per annum, but under the scheme, only 80,000 tonnes of waste are permitted to come to him. He may say, "You are reducing my income by 20 per cent", and there may be a question of compensation.

The purpose of the amendment is to probe what is likely to happen in that situation. It may be a theoretical situation; sufficient contracts may run out in the intervening period for that not to be a problem. However, it would be interesting to know whether any research has been done on the matter to discover what is the precise situation. If not, perhaps I can have an assurance that it will be done. Perhaps I will be told, as is so often the case, that I am under a complete misapprehension and that the world is not like that. However, I fear that it is. I know that such very long-term contracts are in place and that the Bill could cut across them to the embarrassment of all concerned unless some other accommodation is made. I beg to move.

Lord Whitty: It would depend on the nature of the contracts whether that problem arose. I would doubt that many contracts specify 20 years in advance how much—by waste or value—the contract for a particular landfill should be. People have known about the directive since 1999—in practice, for a year or two before that. In any case, I do not think that contracts are likely to run into that difficulty. It would be difficult for the Government to say that we had a comprehensive view of that, but it is certainly not a problem that has been widely raised with us by local authorities. Any contract signed since 1999 should not run into that problem. With any contract that was signed before, one would have to consider the particulars. I have received no indication of

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substantial problems, because those contracts tend to be in terms not of quantum but of service. If the noble Lord, Lord Dixon-Smith, or his contacts in disposal authorities care to furnish further information, no doubt we can consider it. However, I am not prepared to make a commitment to compensation in the way that the amendment would provide. I doubt whether the problem is as great as the noble Lord suggests.

Lord Dixon-Smith: I am grateful for the Minister's response. I am bound to say that I have been unable to quantify whether there is such a problem, which is why this is a probing amendment. The Minister is reassuring in that he thinks there is probably not a problem. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 agreed to.

Clause 6 [Borrowing and banking of landfill allowances]:

Lord Greaves moved Amendment No. 15:

    Page 4, line 22, leave out "by regulations" and insert "not"

The noble Lord said: In moving Amendment No. 15, I shall speak also to Amendment No. 17, which is really part and parcel of the same amendment. They represent a fairly draconian way to probe certain aspects of the inter-year utilisation of allowances—the movement of allowances and use of them either one year later or one year earlier than the year in which they are granted, the movement of allowances between years that fall between target years.

The real reason for moving the amendment—perhaps we may have found a less draconian way of doing it, but this is what we have done—is to probe the Government on how the banking of permits may actually act as a disincentive for waste disposal authorities to improve continuously, year on year.

A good authority—we are discussing good and bad authorities here—which does not send a great deal of biodegradable and municipal waste to landfill, or at least sends less than its allowance for the current year, will have a surplus. Under the proposals, it can bank that surplus for future years. Its allowance—the amount of waste that it is allowed to send to landfill—will reduce in those future years. However, if it is allowed to use its present good position to build up credits, there seems to be a disincentive built into the system for that authority—although its practice is good at present—to continue to improve. There is a disincentive for the authority to invest in the required new infrastructure or to devote energy and attention to improving its systems and working with waste collection authorities—if it is not one itself—to reduce the amount of waste collected.

There seems to be a disincentive built into the system. It will be interesting to hear the Government's view. They may say that, if it is a good authority now, it will want to continue to improve. However, given the financial pressures on local authorities, which will not go away, if they are already ahead of the game and can keep going for a further two years on the basis of the allowances that they are banking, they may decide to spend their money on something else, where the

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pressure is greater from the electors, the Government or all the other bodies that now police local authorities. There seems to be a disincentive, and it will be interesting to hear what the Minister has to say. I beg to move.

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