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Lord Whitty: My Lords, there have been slightly different approaches from noble Lords. Some do not like the idea of having brokers; others say that if we must have them, they should be free from restraint.

Clearly, local authorities will have to make their own arrangements as to how they engage in the market. They may well run their dealings in-house with their own internal expertise. An individual authority may consider that it is better to buy in expertise on a services basis. Those engaged in that process should be subject to some scrutiny, as brokers are in other markets. The provision is not a requirement on the waste disposal authorities to employ brokers, nor is it an attempt to create a wholly new profession to deal with this trading arrangement. It is to allow the authorities flexibility in carrying out the trade and to provide reassurance to the public that those who are acting as brokers do so within a reasonable framework.

That is why we want the power to set regulations for brokers. The provision does not prescribe how waste disposal authorities should carry out their business. I probably agree with the noble Lords, Lord Dixon-Smith and Lord Stoddart, that in most cases local authorities will be perfectly capable of carrying out the activity themselves. But if they are not, we need to ensure that those who act as brokers operate within certain guidelines. That is all that the provision requires. Its deletion would remove the ability to ensure that the market functions with integrity. I hope, therefore, that the amendment will not be pursued.

Lord Lucas: My Lords, I should be grateful if the noble Lord would answer my question. Can he illustrate the sort of evil that might occur if brokers are unlicensed? Most people indulging in trading in this country do so without having to obtain a licence, particularly if they are dealing with big companies and organisations. We are not dealing in a market that requires consumer protection. What damage could occur to local authorities if they dealt with an unlicensed dealer?

Lord Whitty: My Lords, it is true that most markets do not require brokers to be licensed by the state, but most markets do not deal with council tax payers' money. Public authorities need to ensure that whoever is trusted with those deals operates in a way that conforms with public service principles.

As for the other regulations, and as my noble friend Lady Farrington said on the previous amendment, the precise provisions for regulation will be subject to wide consultation. It may be that the licensing arrangements will be minimal, but some guidance as to how a brokerage operation should act when dealing with public authorities and council tax payers' money is required. The deletion of subsection (3)(f) would eliminate the Government's ability to regulate. It is not the same as brokering in an entirely private market,

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but it is true that such brokers are generally covered by some degree of self-regulation. The equivalent in the public sector market is that the public sector regulates.

6.15 p.m.

Lord Dixon-Smith: My Lords, I hear what the noble Lord says. If I interpret him correctly, he hopes that he is buying insurance against something that will never happen. He seems to think it unlikely that third parties will come into the trade because the capacity of local authorities' waste disposal authorities is already considerable and they have expertise in dealing with each other.

I have some sympathy with the argument that there should be a capacity to regulate in the event of third-party traders. My noble friend Lord Lucas is right that the vast majority of business by way of trade in this country is done through unregulated markets. If one looks at all business in this country, one finds that the regulated part of the market is considerably smaller than that which is not.

I hear what the Minister said. If he wants to purchase that insurance, we should not prevent him as the premium is not unreasonably high. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hanningfield moved Amendment No. 28:

    Page 6, line 20, leave out from "for" to end of line 22 and insert "the allocating authority to make available to each waste disposal authority the full financial resources necessary for it to comply with any requirement imposed on it by or under provision of the kind mentioned in paragraph (h) together with all regulations made under sections 11 and 12;"

The noble Lord said: My Lords, in moving Amendment No. 28, I shall speak also to Amendment No. 39. Both are associated with the continuing cost of this legislation.

The Minister referred several times to the costs to the council tax payer and the council. We understand why the Government are proposing this legislation now, but in Grand Committee most of us said that the Bill represented putting the cart before the horse. The Government published the paper, Waste Not, Want Not, setting out future dealings with waste. We would prefer to discuss spending money on waste minimisation and deal with the problems of waste rather than talk about extra costs such as landfill tax and regulations. The answer in the end is to find new ways of dealing with waste.

The Bill will cost money. We have estimated that local government in Essex will have to spend 100,000 in extra staff, keeping records and so on. That 100,000 could do a lot of other things. The Minister in Grand Committee said that local government had had a good settlement. We certainly did not have a good settlement in the South East. Local authorities covering 15 million people have had only a 3 per cent settlement. We are having to consider removing some of the measures we have now, such as composting regimes and experiments. An interesting one that we had to get rid of in Essex was the real nappies

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campaign. Disposable nappies constitute a lot of waste. We had a good campaign to persuade people to use real nappies. But the campaign was one of our budget cuts last week. Under this Bill, we are talking about spending an extra 100,000 simply on paperwork.

The amendment would help local authorities to go back to what they should be doing, which is minimising waste rather than completing paperwork. Amendment No. 28 would oblige the Government to remunerate local authorities either by direct grant or by making certain that such remuneration was included in a grant given to local government. It is important for the Government to acknowledge the extra costs to local government and to reduce what is already a severely stretched waste budget.

Amendment No. 39 is slightly different. To many of us in local government, it is rather like the delayed discharge legislation involving social services and health authorities and the fines for people staying in hospital. The Government acknowledge that and have put extra money into the system so that local authorities can cope with people who are in hospital. We say that such fines should at least be returned to local government in some way to help minimise waste. That is what this is about. Where will the money go?

The Government have acknowledged a problem by introducing the delayed discharges legislation. Could they not acknowledge the problem in relation to this Bill? Could not the fines paid into the Government's coffers go not to the Chancellor but into the waste system so that they help to implement this legislation? I beg to move.

Lord Bradshaw: My Lords, I support the comments of the noble Lord, Lord Hanningfield. The whole process of waste disposal is extremely expensive for local authorities. We have had the same sort of settlement as that mentioned by the noble Lord. Next week, I shall be invited with other county councillors to increase council tax by 13.7 per cent. It is a huge increase. I think that the principles enunciated by the noble Lord in his amendments are entirely acceptable to county councillors, who are spending ever more each year on waste disposal. If we are to meet the targets that are set for us, we will have to continue to spend ever more. It is extremely expensive.

Lord Stoddart of Swindon: My Lords, I should like to say a few words in support of the noble Lord, Lord Hanningfield, who has brought forward these two very interesting amendments. As he said, at Second Reading and in Committee, we emphasised the need to prevent the waste arising in the first place; we cannot overemphasise that need. This burden is being imposed on local authorities by very often unthinking private organisations, be they retailers, packagers, or whatever. I know that the Government are taking steps and having discussions to address the issue. Like other noble Lords, however, I urge the Minister to take this point very seriously and to step up the Government's efforts to reduce the amount of waste at

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source. That would help local authorities, waste disposal authorities and householders more than anything else that we can think of.

On the amendment itself, as we have just heard, local authorities are very strapped for cash. In some areas in the South, authorities will have to increase rates not by 13.2 per cent but by up to 20 per cent. That is going to impose an enormous burden on the authorities themselves and, of course, on their council tax payers. Where the Government impose further duties on local authorities, they have some duty to provide the means of carrying them out. Unfortunately, they are not doing that. Unfortunately, far from allowing local authorities the sources of finance they ought to have, the government under both parties have progressively reduced local authorities' ability to obtain funds to carry out the work imposed on them by the government.

I think that the two amendments in this group try to get the Government to understand what local authorities go through and to do something about it. Certainly where fines are imposed, some of that should go back into the local authorities, who are the ones who have been injured. I feel that there is enormous support for what we have been saying. I hope that the Minister will take note of it.

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