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Baroness Farrington of Ribbleton: My Lords, the amendment would remove the power to make provision in regulations for allowances to be traded or transferred only if allocated by a particular allocating authority and/or for specified scheme years. Such provision enables allocating authorities to prevent cross-border trading or to provide for it with certain countries. It also allows allocating authorities to restrict transfers of allowances to those allocated for the year in which they are traded, or to place restrictions on the trading of allowances that have been banked or borrowed.

We consider it important for allocating authorities to have the power to restrict trading in this way. The Bill seeks to set out a flexible framework for the scheme and to give the allocating authority for each country of the UK the ability to make their own decisions about the detailed operation of the landfill allowance scheme in regulations.

Each allocating authority will make its own regulations and each will consult on its scheme. We believe it is proper to give those allocating authorities the flexibility to frame their schemes as they see fit. The appropriate authorities in Scotland and Wales may see the benefits in relation to cross-border activity that noble Lords have identified as appropriate. However, it is not appropriate to restrict that ability for each of the allocating authorities to make its own judgment by taking a decision in advance.

I hope noble Lords will not press the amendment. We would hate to upset the Scottish Parliament or the Welsh Assembly. I can see the noble Lord, Lord Livsey, nodding his head.

Lord Dixon-Smith: My Lords, perish the thought that we should upset any subsidiary part of the United

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Kingdom. I am grateful to the noble Baroness for her explanation, which has helped. We shall study it. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Dixon-Smith moved Amendment No. 25:

    Page 6, line 5, leave out paragraph (d).

The noble Lord said: My Lords, subsection (3)(d), which the amendment would leave out, says:

    "make provision authorising the allocating authority to suspend the transfer of allowances—

    (i) whether indefinitely or for a fixed period, and

    (ii) whether generally or to a limited extent".

The Minister has already said that the allowances will be known well in advance, which will allow reasonable certainty on long-term planning for waste disposal authorities. That sort of planning will be required if the capital investment that we hope for is to be forthcoming and if the required skills are to be developed.

At the end of the process, the amount of biodegradable municipal waste going to landfill has to be no more than 35 per cent of the amount produced in 1995. That is a huge change—even bigger in view of the fact that the volume of biodegradable municipal waste has been increasing by 3 per cent a year since 1995 and was increasing before that. Should any allocating authority decide not to allow transfer of allowances at any time, disposal authorities would have to plan around the change. To allow transfer and then suspend it would increase the hazard. The authorities would first have to plan around the change, and then plan around its suspension. That would make life impossible. We felt that it was better therefore to leave out subsection (3)(d). I beg to move.

6 p.m.

Lord Livsey of Talgarth: My Lords, Amendment No. 25 would make the situation less flexible. When replying to this amendment and others in Committee, the noble Lord, Lord Whitty, said at col. GC50 on 17th December last:

    "Our objective here is to promote the maximum degree of flexibility within an overall UK target. Although different allocating authorities—that is, different national governments—may establish different schemes, we do not believe it is sensible to provide a system which, in principle, restricts any exchange, transfer or trading between those authorities".—[Official Report, 17/12/02; col. GC50.]

The noble Baroness, Lady Farrington, in her reply to the previous amendment, took account of that response. But the Minister at the time did not explain why it is sensible, in this context, to allow a severe restriction on the scheme by suspending the trading allowances. This matter needs a little further probing and explanation.

Baroness Farrington of Ribbleton: My Lords, Amendment No. 25 seeks to remove Clause 7(3)(d)

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from the non-exhaustive list of the types of provision which the regulations, under Clause 7(1) may make. Paragraph (d) provides for regulations to,

    "make provision authorising the allocating authority to suspend the transfer of allowances".

As I have already explained—this was recognised by the noble Lord, Lord Livsey—we believe that allocating authorities should be able to provide for the transfer of allowances as part of a flexible landfill allowance scheme. However, the allocating authority must be able to retain some control and there may be circumstances—for example, a major emergency or a major change in policy altering the directive—where it would need to suspend trading, whether indefinitely or for a fixed period, generally or to a limited extent. It is for each allocating authority to decide the extent to which it should be authorised to suspend the transfer of allowances when making regulations to authorise trading.

I hope that that covers the unease expressed by the noble Lord, Lord Livsey, and the mover of the amendment, the noble Lord, Lord Dixon-Smith. This will be a matter for consultation. The result of that consultation and the regulations that emerge will come before this House through the affirmative procedure. I shall not be surprised if the noble Lord, Lord Hanningfield, watches carefully and takes part in the necessary consultation. I hope that with that reassurance the noble Lord, Lord Dixon-Smith, will not feel the need to press the amendment.

Lord Dixon-Smith: My Lords, the noble Lord, Lord Livsey, is helpful, as always. I am grateful also to the noble Baroness for her response.

I accept that circumstances change. If in the event there is to be consultation before any changes of this nature are made, that will go a long way to smoothing any difficulties. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 26 not moved.]

Lord Dixon-Smith moved Amendment No. 27:

    Page 6, line 12, leave out paragraph (f).

The noble Lord said: My Lords, subsection (3)(f)says that regulations may,

    "make provision for licensing and regulating persons engaged as brokers in the transfer of allowances".

I sometimes feel that it will not be long before we are establishing a department in the Bank of England which will be trading waste disposal allocation.

I have no difficulties with allowances being traded between authorities. I have no difficulties with the trading, whether it is of unused allocations or even future allocations. But the idea that it may become a profession with independent third party involvement seems to go beyond reason.

Local authorities are used to dealing with each other. Waste disposal authorities are no doubt the same in that respect. A good exchange of information

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exists at that authority level. I am sure that if somebody had an allocation they wished to trade, there would be no difficulty in that being done directly. We do not believe that third party intervention is appropriate. That is why we tabled Amendment No. 27. I beg to move.

Lord Livsey of Talgarth: My Lords, perhaps I may refer to the previous amendment for a moment. Chivalry is clearly not dead in this ancient House and its traditions, and I thank the noble Lord, Lord Dixon-Smith, for his kind remarks.

We thoroughly agree with Amendment No. 27. This is the paragraph in the Bill which allows regulations to be made for waste allowances brokers. We are not convinced that such a new profession is necessary. We can see that there may be sense in a local authority or the waste disposal authority employing an officer who can engage in trading between two other waste disposal authorities other than his own—if they have the contacts and skills. That may in fact benefit the council itself. But we cannot see a role for the private sector in that respect.

I can think of other examples where perhaps it would have been better in certain circumstances if the private sector had not become involved. It made some of the processes extremely complex. Therefore, Amendment No. 27 is thoroughly sensible.

Lord Lucas: My Lords, even if the private sector became involved—I agree with my noble friend that that seems unlikely—why should the brokers need licensing? They are people who are trading between local authorities. Local authorities do not need consumer protection of that sort. I cannot see why under any circumstances we need the bureaucratic structure which the Bill would create of licensing, recording and introducing all sorts of tests for people to pass.

We are talking about grown-up people dealing between themselves. If someone can make a living as an intermediary, why should he need licensing? What unimaginable sort of problems does the noble Baroness envisage if those people were to trade in an unlicensed way?

Lord Stoddart of Swindon: My Lords, I too support Amendment No. 27. I cannot see what need there is for brokerage in this industry. Indeed, I cannot see how they will make much of a living; and if they do make much of a living, the costs on the local authorities and waste disposal authorities will be much higher.

We are all used to going to brokers for insurance. But a large number of people are involved in that industry. There are only a limited number of waste disposal authorities. If they need help, they can contact their own Local Government Association. I cannot see why we need brokers, as the noble Lord said. But if we do need them, why do they have to be licensed? Why

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put yet another layer of regulation on an industry that will have regulations piled on it along with the other provisions in the Bill?

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