Clause 7 - Trading and other transfer of landfill allowances

Part of Waste and Emissions Trading Bill [Lords] – in a Public Bill Committee at 9:15 am on 8th April 2003.

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Photo of Norman Baker Norman Baker Liberal Democrat, Lewes 9:15 am, 8th April 2003

The hon. Member for Mid-Bedfordshire did not say so but implied that I had stolen Lord Dixon-Smith's amendment from the Lords. I can assure him that the amendment originated during a long train journey from Lewes to London. For reasons best known to South Central Trains, that journey took a circuitous route, which gave me the opportunity to read the Bill and to suggest amendments. However, the fact that I reached the same conclusion as the hon. Gentleman's colleague in the Lords would suggest that there is merit in the amendment. Two people think that it is worth pursuing; the Minister, sadly, does not make a third.

The Minister is right to say that the Bill merely allows local authorities to use brokers and does not require them to do so; that is perfectly proper. However, I have a feeling that once one or two local authorities start using brokers—perhaps the larger ones that can afford to do so—they will gain a perceived competitive edge. The consequence will be a cascading process, by the end of which virtually all authorities will have brokers. Once one does it, the others will follow.

The Minister rightly referred to the good partnerships between waste disposal authorities—we heard about them in an earlier sitting. Those will be put in jeopardy by arrangements with a jarring third party that will gain influence from one over the other. After all, the point for a WDA of employing a broker will be to maximise its benefit, probably at the expense of another authority. It will be in the broker's interest to reach an agreement on transfer that will be beneficial to one authority and detrimental to another. If the broker is not to gain the edge for the authority, what is he or she there for? The situation will cause disharmony between WDAs.

I am grateful to the Minister for saying that the regulations will ensure that there are restrictions on the types of person who can be licensed. I hope that he means, by implication, to exclude those who have a direct commercial interest. Employees of companies such as Biffa—I am not picking on it, merely using it as an example—would, therefore, be excluded. That is important, because they might have an interest in not following the process properly.

Let us say that authority A employs as a broker a company involved in waste disposal. If that company has a contract with authority B it might not wish to comply with the wishes of authority A; it may be in its interest to keep up the contract volume with

authority B. The situation would be unclear due to the conflict of interest between the broker and the WDAs.

The hon. Member for South Holland and The Deepings made an astute point about the potential role of WDAs in the brokering process. Local authorities are developing in-house specialities and seek to market those to neighbouring authorities. There is nothing new about that; for example, the district council of which I was a leader some years ago did the same thing with waste collection, street cleaning and grass cutting. Establishing a speciality and selling it to other local authorities is standard practice in local government. The Bill makes it possible for waste disposal authorities to set up their own brokerage and to market services to others. The Minister said that that is not precluded. Those services could even be marketed so as to benefit the originating authority, thereby creating a conflict of interest. The system that the Minister is setting up is not clean.