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Lord Stoddart of Swindon: The Minister says that he will consult. Can he tell us exactly whom he will consult?

Lord Whitty: The consultation will certainly include all the waste disposal authorities and others involved with waste collection. I shall not give a definitive list because the private sector must also be involved. I suspect that we have a list that I could provide to those interested before Report, but it will include all those who are affected by this clause.

Lord Dixon-Smith: I am sorry to intervene once again, but can the Minister tell us whether, when a consultation of this sort is undertaken, the proposition is posted on a website to which everyone has access and can respond should they feel so inclined?

Lord Whitty: That is now a normal procedure and I have just been informed that that will occur on this occasion. I withdraw the reference to the normal list because those on it will no doubt receive hard copies, but anyone will be able to respond to that consultation.

Lord Greaves: I am grateful to the Minister for the assurances he gave about consultation in England, at least, which were helpful. It would be helpful if we could read the list of organisations and persons covered by what he said. I am not sure that he explained to me what the subsection means.

Lord Whitty: I apologise. I intended to return to that but forgot. The intention is to ensure that there is within the regulations a way of defining how much of any given mixed waste is likely to be biodegradable. There will be separated biodegradable waste but there will also be unseparated waste which has to enter into the calculations. If that is the case and biodegradable is only part of the waste stream and only part of that stream is municipal, the calculation based on the 1995 figures is that 63 per cent of the municipal stream is biodegradable. It is that fraction on which we shall be regulating and that is what this clause is about. My apologies for not responding to that immediately. I hope the Committee will forgive me if I leave matters in the capable hands of my noble friend Lady Farrington.

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4.15 p.m.

Lord Greaves: I am grateful for that explanation and I think I now understand what the provision means. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hanningfield moved Amendment No. 60:

Page 8, line 24, leave out subsection (3).

The noble Lord said: The amendment is designed to deal with the situation of one authority having to be fined or having problems because of difficulties caused by another authority. We raised this issue yesterday. We wish to remove the subsection to stop this anomaly.

We went through this in considerable detail yesterday. I mentioned Essex, where there are 12 collecting authorities and one disposal authority. The disposal authority could be fined, through no fault of its own, because one of the collecting authorities, for political reasons or some other reasons, had not met its targets. There ought to be a mechanism to cater for disposal authorities that have problems through no fault of their own. Amendment No. 147, tabled by the noble Lord, Lord Greaves, tackles this problem, which needs to be addressed. We discussed it at the earlier stage but I am afraid that this one will not go away. An authority should not be fined or get into particular problems on this through no fault of its own. Some mechanism must be found to prevent that. I beg to move.

Lord Livsey of Talgarth: I have a great deal of sympathy with the position that the noble Lord, Lord Hanningfield, finds himself in in Essex. These problems may also arise in other parts of England. It is a little concerning that, as I understand it, the amendment would remove the means of penalising a waste disposal authority. That is an important principle. None the less, as the noble Lord has said, there must be some way of dealing with the particular circumstances that obtain in his area and others. I ask the Minister to consider this situation most carefully. We may need to put something additional into the Bill. I am sure that advice will be forthcoming.

Lord Dixon-Smith: Amendments Nos. 142 and 146 are grouped with the amendment of my noble friend. Amendment No. 142 comes in a clause on penalties generally. We find it somewhat strange that, having created a scheme of penalties, the allocating authority calculates the amount of penalty and then has the power to defer payment of the penalty and could also defer the payment of interest on the penalty. Therefore, the allocating authority, having penalised somebody, also has the power to go a long way towards obviating the effect of the penalty. One really wonders quite what the point of the whole exercise is. Presumably, if the penalties are to have any impact—and we have heard of many failures—they will have to be substantial. If they are to be substantial and supposedly have effect, why is there a power to obviate the complete effect by deferring payment and deferring interest? We found a bit of confused thinking in

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Clause 25 and we felt that if the penalties were paid it would be quite nice if, since the penalties were for people causing some sort of problem with a tip, that money was used to benefit the environment of the immediate vicinity. Amendment No. 146 is designed to give effect to that. They are not irrational amendments; they are quite sensible.

Baroness Farrington of Ribbleton: Amendment No. 146 deals with the recurring issue of hypothecation. I hope that noble Lords will accept that we intend to deal with that in the way that my noble friend the Minister mentioned earlier. This is quite a convenient time to clarify the difference and the distinction between civil penalties and penalties for criminal offences. The Bill makes provision for civil financial penalties if waste disposal authorities exceed their allocation of allowances. It also makes provision for a waste disposal authority to be liable to a penalty where it fails to comply with a requirement imposed by regulations under Clause 11, such as the requirement to maintain records. Clauses 6(3), 7(3) and 10(3) also enable regulations to provide for waste disposal authorities to be liable to a penalty. Clause 25 provides for the amount of such penalties or a formula for calculating them to be set by regulation.

These are clearly distinguishable from the penalties for offences. Clauses 6 and 7 permit allocating authorities to create offences for breaches of regulation. An example of an offence that may be created is knowingly or recklessly providing false or misleading information to the monitoring authority. The Bill sets out maximum penalties for such offences, which we discussed yesterday.

Clause 12 provides for a landfill operator to be guilty of an offence—for example, failing to supply information or obstructing an inspector—and sets out the penalties.

These are all civil penalties. Amendment No. 60 would take away the provision for a penalty for breaches of the rules at the scene such as a failure to provide evidence on how much biodegradable waste has been sent to landfill. Such evidence is clearly vital to the ability of the monitoring authority in each area of the UK to ensure compliance with the scheme and therefore to enable us to meet our international obligations. Most of the commentators during consultation have made it clear that any system of landfill allowances will also need to have attached to it significant penalties for failure to comply with the limits imposed within the system. The noble Lord, Lord Livsey, recognised that the absence of such penalties could mean that there is no real incentive for waste disposal authorities to meet their limits. Any sanction must be sufficient to incentivise the investments implied, either in traded allowances or infrastructure, by meeting those limits.

For this reason we cannot accept Amendments Nos. 60 or 145 as those sanctions are a key to the success of the scheme. At the same time, referring to the point made by the noble Lord, Lord Dixon-Smith, we do not wish to take money out of the local authorities when it would be best used for the

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investment required for the UK to meet its international obligations. We therefore believe it is important to give the allocating authority in each area of the UK the ability to waive part or all of the penalty or the interest that may be payable on it where circumstances make that the appropriate course of action. An example is where the landfill allowance is exceeded by only a very small amount, and where there are clear plans for improvement. Therefore, it may not be appropriate for the whole penalty to be applied. There may be other such cases where we believe that it is important for that authority to have such a power and the ability to take into account the particular circumstances facing the authority.

While there are good reasons to be able to keep track of the amount paid in penalties, the Government could not accept hypothecation which would take resources out of the waste disposal section in those circumstances. Perversely, for once the noble Lord, Lord Dixon-Smith, would be arguing against retention of resources within the sector. We cannot accept those amendments. I hope that noble Lords will feel able to withdraw them. I apologise for speaking at length.

Lord Hanningfield: Perhaps the noble Baroness will clarify one point. Originally my amendment was devised because of the problem in virtually 60 per cent of England where there are two-tier authorities. Essex has 12 districts. At the moment, none of them meets its recycling targets despite the pressure that we are placing on them. They are not investing enough money.

What the noble Baroness, Lady Farrington, said is important. If the Environment Agency is to be the allocating authority and if it were not the county council's fault, the Environment Agency could say that there would be no penalty to Essex County Council until the districts have been sorted out because it would be the districts' fault. Is the noble Baroness saying that? If the disposal authority were not at fault, but for some reason, due to the fault of others, the targets were being breached, the Environment Agency would have the power to waive the penalty. Is that what is being said?

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