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Lord Stoddart of Swindon: My Lords, I support the amendment and thank the noble Lord for bringing it forward. It must be clear in the Bill that there is financial or other material gain for the offender.

I have sought to follow the Bill at Second Reading, partly in Grand Committee, and today. I am glad that I shall not have to deal with the Bill's provisions. They are confusing in so many respects. Anyone who has to operate the measure cannot help but be confused. The people dealing with the provisions will not normally be

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mathematicians who can work out algebraic equations; they will be handling the stuff on the ground. Therefore, they could be in breach of the regulations without any intention of gain but simply and solely because of not understanding them or because no proper explanation had been given. Their superiors might not be able to understand the regulations—they might not be mathematicians either.

I hope that the Minister will take this matter seriously. I think he will accept that this is a complicated Bill. Any measure that comes out of the European Union is bound to be complicated, and this seems more complicated than the other stuff. I hope that the Minister will treat the amendment with sympathy.

Lord Whitty: My Lords, I understand the concern that we do not want an open-ended creation of offences, but I think that the amendment limits the Bill's powers too much. We might need the provision to create offences where there was a serious breach of the information requirements. We have in mind the offence of knowingly or recklessly providing information which is false or misleading in a material particular. Although we want such an offence to cover the situation where there is material gain to the committer of the offence, we do not wish to confine it to that. For example, a misleading or false provision of information could be designed to benefit the authority for which the offender worked. It could, in certain circumstances, lead to political gain within the authority for others or for what certainly could not be described as financial or material gain, or it could be designed for the benefit of the participating authority in a non-financial sense.

When the courts consider such an offence, they will need to consider why it was committed and for what purpose. We need a provision that allows the regulations to create an offence which covers all these contingencies and not simply one directly giving material and financial gain to the alleged committer of the offence. For that reason, I must resist the amendment.

Lord Dixon-Smith: My Lords, I am grateful to the noble Lord, Lord Stoddart, for his intervention. I find it somewhat sad that the Minister's advice on the workings of the criminal mind is fuller and more unfortunately realistic than mine. I had not considered that there might be other motivations for creating misleading information in this area. I hear what the Minister said and I understand it. With considerable regret, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Speaker (Baroness Ramsay of Cartvale): My Lords, before I call Amendment No. 18, I have to inform your Lordships that if it is agreed to, I cannot call Amendments Nos. 19 to 23 inclusive.

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5.45 p.m.

Lord Whitty moved Amendment No. 18:

    Page 5, line 16, leave out subsection (4).

The noble Lord said: My Lords, I wish to speak also to Amendments Nos. 29 and 35.

In its second report, the Select Committee on Delegated Powers and Regulatory Reform accepted that the delegation to create offences in the Bill would be acceptable if the maximum level of offences were the level in the European Communities Act 1972. I have therefore tabled the amendments to provide for maximum penalties in line with the maximum penalties provided for under paragraph 1(1) of Schedule 2 to that Act. These will provide for the maximum penalty on indictment to be a term of imprisonment which may not exceed two years, or a fine, or both. The maximum penalty on summary conviction would be a term not exceeding three months and/or a fine not exceeding the statutory maximum or level 5 on the standard scale.

I am aware that there is concern about allowing the power to set penalties of both imprisonment and a fine, but there are a number of precedents. For example, Section 346 of the Financial Services and Markets Act 2000 provides for the offence of knowingly or recklessly providing,

    "information which is false or misleading in a material particular".

The penalties are of a similar order. This offence applies to persons authorised to carry out regulated activities under that Act.

There are a number of other precedents, if your Lordships are interested—Section 44 of the Competition Act 1998, Section 93B of the Fair Trading Act 1973 and Section 11 of the Charities Act 1993. Although the provisions may be slightly different, they cover both imprisonment and a fine. Thus, to enable us to fix the same penalties for the offence, we need to retain the "or both" provision in relation to imprisonment on indictment.

In tabling the amendment, we have complied with the advice of the House of Lords Select Committee on Delegated Powers and Regulatory Reform, as we always try to do. I beg to move.

Lord Dixon-Smith: My Lords, these amendments are welcome. The level of penalties provided in this part of the Bill caused us considerable concern, and the amendments go a long way towards relieving that concern. In fact, they supersede our amendments very neatly. It is gratifying to see that the Government have taken on board the points raised in Grand Committee about this part of the Bill. I welcome the amendments.

Lord Livsey of Talgarth: My Lords, I welcome the amendments. Much detail is contained in Amendment No. 35 which will, as the Minister said, bring the Bill into line with recommendations of the Select Committee on Delegated Powers and Regulatory

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Reform. There is no doubt that, as previously drafted, the Bill was draconian in some respects. We are very satisfied with the Minister's proposals.

Lord Stoddart of Swindon: My Lords, I, too, am grateful to the Minister for taking account of what was said in previous discussions, particularly in Grand Committee. The previous penalties were draconian and completely unacceptable. But I wonder whether a two-year term of imprisonment provided for in the amendment is draconian, even so. Is this the sort of offence for which people should go to prison? We have heard from the noble and learned Lord, Lord Woolf, and the noble and learned Lord the Lord Chancellor that we should not put burglars in prison, certainly not for a first offence. Burglary seems a much more heinous offence than cheating under this Bill. I should have thought that the correct penalty in this respect should be an exemplary fine accompanied not by a prison sentence but by community service.

The Government have stated their confidence in the system of community service on many occasions. In this case, service to the community, coupled with a fine, would be a far better result for everyone concerned. Even at this late stage, I hope that the Minister will have yet another look at the issue to see whether imprisonment is necessary under the terms of the clause.

Lord Whitty: My Lords, I am grateful for the words of appreciation for having tabled the amendments, which I hope meet most of the anxieties. I note what the noble Lord, Lord Stoddart, says. He is not going to tempt me into commenting on the interesting discussions between the noble and learned Lord, Lord Woolf, and the Home Secretary on broader matters of sentencing policy. In this context we are talking about maximum penalties. In appropriate circumstances, the courts will be able to impose a more limited penalty, possibly avoiding imprisonment. The maximum penalty reflects the penalties for similar offences relating back to the standard of the European Communities Act—although I am sure that will not appeal to the noble Lord, Lord Stoddart. The provision has been adopted by various administrations for similar offences of producing misleading information for material benefit, under the Acts that I referred to. I therefore think it is appropriate in these circumstances too. That does not mean that there will be imprisonment for every first offence. The penalty is a maximum, not a mandatory one.

On Question, amendment agreed to.

[Amendments Nos. 19 to 23 not moved.]

Clause 7 [Trading and other transfer of landfill allowances]:

Lord Dixon-Smith moved Amendment No. 24:

    Page 5, line 45, leave out sub-paragraphs (i) and (ii).

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The noble Lord said: My Lords, this is a probing amendment. Subsection (3)(a) says that regulations may:

    "make provision for allowances to be acquired, or disposed of, only if—

    (i) allocated by the allocating authority".

Who else would give anybody an allocation that they could dispose of? I suppose allocations that had been traded could subsequently be disposed of, but this seems a little odd. We suggest that people should be able to trade only the allocations that they were given, so sub-paragraphs (i) and (ii) are unnecessary. This is a technical amendment to probe the Government on precisely what those sub-paragraphs mean. I beg to move.

Lord Livsey of Talgarth: My Lords, as the noble Lord, Lord Dixon-Smith, said, this is a technical amendment, brought forward from Committee. It relates to allowing the allocating authority—either a devolved authority or an authority in England—to make the trading and transfer scheme less flexible. We think this is desirable and support the reasons given by the noble Lord, Lord Dixon-Smith. The Government did not explain their view on this in Committee and we would like to know what they think.

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