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Lord Dixon-Smith: My Lords, the issue of fines and penalties on local authorities is inevitably a very complicated question when 80 per cent of local government's revenue comes from the central government anyway. The fines and penalties are effectively a penalty levied on the Government themselves—unless, of course, there is a way of excluding fines and penalties from the generality of local authority expenditure. The Government already have a milch cow in the landfill tax. Although I know that it is a separate issue, at present, the Government's revenues from that tax are considerably greater than their return to the waste disposal business.

I must support Amendments Nos. 28 and 39. It is simply unreal to expect that the additional costs, and then the financial penalties, can be met just like that. Those costs will have a very real impact on local tax payers. They are a part of the total package. As I said, because of successive government decisions, and not only decisions by this Government, local tax payers are contributing too small a part of local government revenue. There is a problem. These amendments would do something to help local government to reduce that problem. I think that one should take steps to ensure that the person who created the problem is not the immediate beneficiary of the money coming back. Moreover, the principle must be correct.

Lord Whitty: My Lords, I have a degree of sympathy for some of the comments made, particularly in relation to Amendment No. 39. On the other hand, I do not accept some of the premises on which the amendment is based. The additional bureaucratic burden implied by the Bill is relatively small. The Bill requires waste disposal authorities to provide information which most authorities already collect.

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The information is therefore already available and the additional burden will only be one of reporting the data to the monitoring authorities. In itself, that is not likely to create the type of financial pressures to which the noble Lord, Lord Hanningfield, and other noble Lords referred. Nor do I accept that that requirement is part of the overall pressure on local authorities.

Lord Hanningfield: My Lords, we have done an analysis through the Local Government Association of the provision's effect in large authorities. We think that it will cost large authorities such as Essex about 100,000. As I said, we could do several waste minimisation schemes for that. In such stretched circumstances, 100,000 is a lot of money.

Lord Whitty: My Lords, I note what the noble Lord says. He is clearly indicating that the way in which it is carried out in his authority will create that magnitude of problem. However, that is against the fact that, in the past two spending reviews, we have substantially increased the provision for environmental services, in which waste management is a major component. We have also provided additional funding through the waste minimisation and recycling funds. Significant additional resources are going in specifically for that purpose. The funding goes into the general grant in regard to the first category, after which it is up to the local authority to decide how it should be allocated.

The provision for allowing allocating authorities to place a financial penalty on waste disposal authorities who fail to provide the information in the form required is important to ensure that the trading scheme can operate at all. That provision therefore entails sanctions and penalties. Amendment No. 39 would require the money arising from those penalties effectively to be recycled back into the local authority's waste programme.

On the face of it, that has clear attractions, if, as the noble Lord, Lord Dixon-Smith, said, we can avoid the money going back to those who benefited from the original misdemeanour. However, it raises significant issues of principle and it is effectively a hypothecation of something approaching fine income, which has not hitherto been a part of the public finance approach. There are precedents for recycling this money within particular regimes. To be slightly Delphic, discussions are still proceeding in regard to what Amendment No. 39 covers in principle. Those discussions may or may not be completed by the time we reach Third Reading in this House, but we are actively and creatively examining outcomes not unadjacent to the outcome desired in Amendment No. 39.

I hope therefore that the noble Lords opposite will not press this amendment tonight but will instead watch this space. I hope to be able to say something more positive on Third Reading. If I cannot, the noble Lords can return to the subject at that stage. I should be grateful if, at this stage at least, the noble Lords could agree to withdraw the amendment.

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6.30 p.m.

Lord Hanningfield: My Lords, I thank the Minister for that reply. On the matter of the first amendment, we will do some more work on the actual cost to local authorities, because it will be important for the Government to recognise that cost in the TSS. Even if the Government cannot accept the first amendment, I would like to pursue the second amendment further at a later stage. However, for today I accept what the Minister said.

Some money will come out of the system. No one is suggesting that it should go back directly to those who incurred the fines, but it should go back into the waste system. I repeat that that money could do much to help schemes for minimising waste. If it went back into that area, we could work on our main objective. All of us want to minimise waste. None of us want this kind of legislation—we would rather not have the waste in the first place.

The money should not go out of the local authority system—it should go back into it to help achieve our objectives. I am grateful for what the Minister said. We will wait until Third Reading before pursuing this matter any further. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees: My Lords, if Amendment No. 29 is agreed to, I cannot call Amendments Nos. 30 to 33 inclusive.

Lord Whitty moved Amendment No. 29:

    Page 6, line 29, leave out subsection (4).

On Question, amendment agreed to.

[Amendments Nos. 30 to 34 not moved.]

Lord Whitty moved Amendment No. 35:

    After Clause 7, insert the following new clause—

(1) This section applies where—
(a) regulations under section 6(1) are making provision of the kind mentioned in section 6(3)(j), or
(b) regulations under section 7(1) are making provision of the kind mentioned in section 7(3)(l).
(2) The regulations may provide for an offence to be triable—
(a) only summarily, or
(b) either summarily or on indictment.
(3) Where the regulations provide for an offence to be triable only summarily, they may provide for the offence to be punishable—
(a) by imprisonment for a term not exceeding such period as is stated in the regulations (which may not exceed three months), or
(b) by a fine—
(i) not exceeding such amount as is so stated (which may not exceed level 5 on the standard scale), or
(ii) not exceeding such level on the standard scale as is so stated, or
(c) by both.

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(4) Subsections (5) and (6) apply where the regulations provide for an offence to be triable either summarily or on indictment.
(5) They may provide for the offence to be punishable on summary conviction—
(a) by imprisonment for a term not exceeding such period as is stated in the regulations (which may not exceed three months), or
(b) by a fine—
(i) not exceeding such amount as is so stated (which may not exceed the statutory maximum), or
(ii) expressed as a fine not exceeding the statutory maximum, or
(c) by both.
(6) They may provide for the offence to be punishable on conviction on indictment—
(a) by imprisonment for a term not exceeding such period as is stated in the regulations (which may not exceed two years), or
(b) by a fine, or
(c) by both."

On Question, amendment agreed to.

Clause 8 [Duty not to exceed allowances]:

Lord Hanningfield moved Amendment No. 36:

    Page 7, line 3, at beginning insert "Subject to subsection (5),"

The noble Lord said: My Lords, Amendments Nos. 36 and 37 are enabling amendments for Amendment No. 41. Amendment No. 41 deals with the most difficult part of the Bill. I do not like to keep talking about my own authority of Essex county council, but I am familiar with it and I know about the problems there. We are a large county with 12 district councils. Most of England is covered by two-tier authorities similar to Essex with its district councils. We can only achieve what is set out in the Bill by co-operation and working together with the two tiers of local government. In Essex, we have a consortium of all the authorities and we are trying to work together to minimise waste and to find out how to dispose of it. Essex county council is the disposal authority in that case.

The worst aspect of the legislation is that officers or members of Essex county council could be penalised, fined or even sent to prison through the actions of one of the district councils. Our 12 district councils are very different from each other. Some of them recycle virtually nothing at all and others recycle up to 40 per cent. I am sure that they all have ambitions to recycle more, but in a small district council 30,000 can put 1 per cent on the council tax and some of them are reluctant to spend very much money on such issues.

It could be a political matter as well. A district council might want to get a county council of a different political complexion into difficulties—perhaps get its members put in prison. The Government must think again about this matter. The Minister indicated in Grand Committee that they would do so. It cannot be the Government's wish that one group should be penalised for the actions of another about which they can do nothing. That is the

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most severe aspect of the legislation and something should be done about it. I hope that the Minister can help on this one. I beg to move.

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