Clause 8 - Offences under regulations under

Waste and Emissions Trading Bill [Lords] – in a Public Bill Committee at 10:00 am on 8 April 2003.

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Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

With this it will be convenient to discuss the following amendments:

No. 46, in

clause 8, page 6, line 26, leave out from 'amount' to 'or' in line 27 and insert

'which may be set by the Secretary of State by statutory instrument.'.

No. 41, in

clause 8, page 6, leave out line 29.

No. 42, in

clause 8, page 6, leave out lines 33 and 34.

No. 43, in

clause 8, page 6, leave out line 39.

No. 44, in

clause 8, page 6, leave out lines 42 and 43.

No. 45, in

clause 8, page 6, leave out line 45.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

The reason for the amendment is that it touches on the very serious nature of some of the offences in clause 8 and on the response to them. I was of the opinion that the Bill was all about filling holes in the ground rather than filling cells. Therefore I am

unhappy with the idea that councillors or employees of a council should face up to three months in prison for committing an offence under the regulations in clauses 6 and 7 or for failing to comply with them.

Clause 6—''Borrowing and banking of landfill allowances''—and clause 7—''Trading and other transfer of landfill allowances''—deal with offences for which we should not be considering imprisonment. There is a fantastic painting behind you, Mr. Griffiths, of at least five Members of Parliament fleeing the wrath of the King. That is the sort of thing for which we should consider imprisonment. Consider the possibility of a similar painting in 100 years' time of four or five Liberal Democrat councillors from Herefordshire unitary authority fleeing because of an offence that they committed in failing to comply with the landfill tax credit scheme or the trading and transfer of landfill allowances or even the borrowing and banking of landfill allowances.

This is a serious Bill and it is incumbent on all of us to improve it. I have done so by tabling the amendments. I would happily imprison people for serious offences, but this is not the sort of message that the Committee should be sending out. That is why I tabled the amendments. We must enact positive, helpful, clear and sensible legislation. The Opposition have a duty to question the motives of a Minister who seeks to imprison people for such offences. What sort of person would the Minister seek to imprison under the regulations? I began to picture, almost like a Radio 4 show, who would be imprisoned. Would that be the whole authority? If so, that might make the Bill considerably more popular. It would be a Paul Merton-type answer that if it put loads of councillors in prison, it could not necessarily be a bad thing.

However, we should consider the problem that the Government have had with parish councillors. It has been difficult to find parish councillors as they feel that what they are allowed—[Interruption.] No, they are put off by the £25 limit on the presents that they can receive without declaring them, which puts some of their Christmas out of reach. Considering how difficult it is to find parish councillors, it is no surprise to find out how difficult it is to find county or unitary authority councillors. I know that that is true, because we have council elections in May, and the Labour party and Liberal Democrats have struggled to find enough candidates in my area. The idea that we will put them in prison for failing to comply with the Waste and Emissions Trading Bill is extraordinary. Given the nature of the Bill and of the people whom I understand would be imprisoned, community service would perhaps be a more appropriate punishment.

When the Minister replies, I hope that he will calm my fears about who will be imprisoned and outline the type of person whom he feels it would be appropriate to imprison. It is entirely reasonable to demand fines, but it is bizarre to wish to lock up people. We will debate hypothecating fines under a later clause, and that must be a better way of dealing with such an offence than worrying about prison sentences. I hope that the Minister will answer some of the probing questions and that the Committee will accept that the amendment would make the Bill less draconian.

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

I am sure that Prynne, Bastwick, Valentine, Holles and Burton will be posthumously happy of the mention that they had.

Photo of Mr Jonathan Sayeed Mr Jonathan Sayeed Conservative, Mid Bedfordshire

The amendments would strike out the regulations that provide for an offence under the Bill to be punishable by imprisonment. That leaves fining as the only penalty. I examined the fines in the Criminal Justice Act 1991, section 17(2) of which showed that the maximum fine on the standard scale for a level 5 offence is £5,000. My question is slightly different from those in the contribution of my hon. Friend the Member for Leominster (Mr. Wiggin). If the cost of non-compliance is less than the cost of compliance, will that not encourage authorities not to comply? Should there not be a greater degree of flexibility that both allows for inflation and ensures that the penalty for not complying is greater than the imposition for complying? That would mean that fewer fines would be charged because people would comply.

Photo of Norman Baker Norman Baker Liberal Democrat, Lewes

The hon. Gentleman's last point is valid, and he will see that amendments have been tabled on that important theme. A calculation has to be made, and the Minister may recall that I made that general point about the costs of compliance versus non-compliance on Second Reading.

I have some sympathy for the points made by the hon. Member for Leominster about the length of the prison sentences and whether imprisonment is an appropriate sanction. The Government have presided over a massive increase in the prison population, and we now have more than 70,000 people in prison in this country, which is up from about 42,000 in 1990. It is the second largest prison population per head of population in Europe. Successive Home Secretaries, both Labour and Conservative, have indicated that they wish to prevent minor offences from resulting in prison sentences. There is considerable evidence from the criminal justice system that short prison sentences do not work; they are counter-productive and clog up the system. If we put somebody in prison, it should be for a serious offence—perhaps one attracting a sentence of four years or more. It does not seem to be sensible to put somebody in prison for three months—which means six weeks with good behaviour—for an offence under this clause. It is important that the individual responsible for any activity that is illegal under these clauses be held personally responsible. It is not sufficient for an individual knowingly to commit an offence and for the waste disposal authority to pick up the fine and to be held responsible. If an individual commits an offence, that individual should be held responsible.

Can the Minister clarify how the fine regime will be applied? Will it apply to the individual responsible, or is the fine going to be levied against the waste disposal authority? Employees will be less concerned about the consequences of their actions if the authority is picking up the bill. Could the Minister also set out what sort of offences he anticipates will result in the maximum two years' imprisonment, referred to in subsection (6)? It is important that there be individual responsibility, but it is also important that we do not send people to prison for minor offences.

Photo of Michael Meacher Michael Meacher Minister (Department for Environment, Food and Rural Affairs) (Environment)

I recognise the concerns that have been expressed. We do not wish the penalties to be more draconian than is necessary to achieve compliance. As in all such circumstances, we hope that the penalties will not have to be used.

I very much agree with the hon. Member for Mid-Bedfordshire. The penalty for non-compliance must exceed the cost of compliance if we are to tilt the market in order to ensure that compliance occurs naturally. That will come up later, as the hon. Member for Lewes said.

As the Bill is implementing an EC obligation, the maximum penalty provided for in clause 8 reflects those that are permitted under the European Communities Act 1972, which are the maximum that regulations could provide for offences. In England, it will be for the Secretary of State to provide in regulations the level of penalties that will be applied to any offence created under clauses 6 and 7, depending on the nature of the offence. The hon. Member for Lewes asked about the types of offence, and I shall come to that. One example of the type of offence that might be created under the Bill would be the offence of knowingly or recklessly providing false or misleading information to the monitoring authority. That is a serious offence if an individual gains financially, or if there is a political gain. The creation of offences will be subject to consultation.

There are precedents in other legislation for that type of offence to be punishable by imprisonment for a term not exceeding two years or by a fine or by both, although that is not to say that we are going to utilise those penalties. However, there is precedent in the 1972 Act. I hope that hon. Members will agree that in extreme cases such offences could be serious.

Photo of John Hayes John Hayes Shadow Minister (Environment, Food and Rural Affairs)

The Minister is making a compelling case to the effect that it would be an exceptional circumstance, but he has not been clear about who would be liable. Would it be the councillor, the chairman of the committee, the whole council or the officer responsible for maintaining the records? Clarity on such matters is most important.

Photo of Michael Meacher Michael Meacher Minister (Department for Environment, Food and Rural Affairs) (Environment)

The hon. Member for Leominster raised that point with some facetiousness.

Photo of Michael Meacher Michael Meacher Minister (Department for Environment, Food and Rural Affairs) (Environment) 10:15, 8 April 2003

Well, I noticed that he said it with a great smile on his face. [Interruption.] No, it is a serious point. The answer is that everything would depend on exactly what the felony was and who was directly responsible—whether it was councillors, the chair of the committee, the leader of the council or officials, for example.

Photo of Gregory Barker Gregory Barker Conservative, Bexhill and Battle

Would I not be right in thinking that if an official or a councillor willingly manipulated information for financial gain, that would already be covered by criminal law under fraud or a similar offence? We are really talking about political advantage. I wonder whether that sets a worrying precedent, especially for the current Administration.

Photo of Michael Meacher Michael Meacher Minister (Department for Environment, Food and Rural Affairs) (Environment)

I shall sidestep the not very telling point that the hon. Gentleman made at the end of his

intervention. On the substantive question of whether the matter is already covered by legislation, any official or councillor who acts corruptly is of course subject to legislation and proper penalties. However, the Bill introduces new administrative provisions that will not automatically be covered by existing legislation. If one requires councillors or officials to act in a particular way, it is important to attach penalties to those new requirements. That is the purpose of the provision.

Photo of Mr Jonathan Sayeed Mr Jonathan Sayeed Conservative, Mid Bedfordshire

I understand that there need to be penalties; the question is whether imprisonment needs be a part of that penalty, which is the thrust of the amendment. Although I am not aware of it, there may be a precedent in similar but not exactly the same circumstances. Could the Minister tell us whether there is such a precedent? If there is already a precedent that has worked well, there might be no need to press the amendment to a vote, at least as far as I am concerned.

Photo of Michael Meacher Michael Meacher Minister (Department for Environment, Food and Rural Affairs) (Environment)

My understanding is that there is a precedent. I cannot quote it, but the means to do so might shortly be made available to me. I believe that the situation is not unique and not without precedent. I entirely agree with the hon. Gentleman that although there is no doubt that a penalty is necessary, the question is whether that should include imprisonment. That is a matter of judgment, but we have said that the question of penalties will be subject to consultation. We do not say that a person who knowingly or recklessly provides false or misleading information will automatically be subject to imprisonment, although we do not wish to exclude that possibility. It is probably best to leave the matter to later consultation.

Photo of John Hayes John Hayes Shadow Minister (Environment, Food and Rural Affairs)

The Minister has made a valuable point. I shall give him a little time to consider his precedent, but it is important that he has given the Committee an assurance. The fact that the issue is not automatic and will be subject to consultation is important and should be amplified. The Minister sees imprisonment coming up in exceptional circumstances and he leaves it available as a long-stop. That is different from our sending a signal to councillors and councils that as soon as the Bill becomes law they are likely to be banged up if they get some of their returns wrong, which will be complicated, new and confusing. The Minister has been helpful on the issues of balance about how the provisions will be applied.

Photo of Michael Meacher Michael Meacher Minister (Department for Environment, Food and Rural Affairs) (Environment)

I am very glad to say that under the normal provision of service here I can supply some evidence of where similar penalties have a precedent. One is the Competition Act 1998, section 44(1)(a), which says:

''If information is provided by a person to the Director in connection with any function of the Director under this Part, that person is guilty of an offence if the information is false or misleading in a material particular, and he knows that it is or is reckless as to whether it is.''

Section 44(3)(b) states:

''A person guilty of an offence under this section is liable on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both.''

There are similar provisions, which I shall not read out, in the Financial Services and Markets Act 2000, in

chapter 41 of the Fair Trading Act 1973 and in the Charities Act 1993.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

Does the Minister accept that the Competition Act 1998, the Financial Services and Markets Act 2000, the Fair Trading Act 1973 and the Charities Act 1993 all concern money? In those cases it is essential that there should be proper penalties. The Bill concerns landfill, which is a totally different subject.

Photo of Michael Meacher Michael Meacher Minister (Department for Environment, Food and Rural Affairs) (Environment)

No; no. The hon. Gentleman is being a little vehement. Of course those Acts concern money, but we are talking about knowingly or recklessly providing false or misleading information to the monitoring authority. [Interruption.] Hold on and give me a chance to speak. The result of providing false information in target years could be the failure of the allocating authority, which is in effect the Secretary of State, to achieve the targets set down in the EU landfill directive. That would be an extreme case, but unless we have accurate information to provide to the Commission as evidence that we have properly fulfilled our requirements, this country could be in considerable difficulty. The penalties for the whole country in that case would be vastly greater than the relatively small gains that might be made under those previous Acts.

I have been informed that all the precedents relate to trading. The offences in sections 6 and 7 of the Competition Act 1998 also concern trading, so there is a direct precedent.

Photo of Mr Jonathan Sayeed Mr Jonathan Sayeed Conservative, Mid Bedfordshire

I did not understand the Minister's point about trading. Perhaps he can further elucidate it in a moment. The examples that he adduced as setting a precedent concern personal pecuniary gain. The 1998 Act does not concern personal pecuniary gain; it concerns someone getting themselves out of a hole. In that case, someone would have done something wrong, but they would not be making money out of it. In each of the examples that the Minister gave, people were acting in their personal financial interest. My question was whether there was a precedent in local government.

Photo of Michael Meacher Michael Meacher Minister (Department for Environment, Food and Rural Affairs) (Environment)

My examples show that there is a precedent in local government. However, one can envisage circumstances in which an individual gains financially or politically. That is the basis on which the possibility of a custodial offence should not be excluded.

I am increasingly warming to the measured responses from the hon. Member for South Holland and The Deepings. I do not want to damage his reputation or to discourage him from continuing with his course, but it is right to look at the consultative proposals rather than assuming that every official who provides incorrect information will be banged up for three months. There is no intention to do so.

Photo of Gregory Barker Gregory Barker Conservative, Bexhill and Battle

In respect of custodial sentences on miscreants, to what extent does the Minister expect the time-honoured principle of ministerial responsibility to extend down the chain of command?

Photo of Michael Meacher Michael Meacher Minister (Department for Environment, Food and Rural Affairs) (Environment)

If the hon. Gentleman is suggesting that Ministers are not subject to the same kind of

penalties as they recommend for others, he is quite wrong. [Interruption.] Does the hon. Member for Leominster want to intervene, or is he just making a facetious point? He is.

As I have said, the penalties in clause 8 also relate to clauses 6 and 7, the trading provisions, but the offences under the Bill also include being in breach of the licensing conditions. They do not relate purely to clauses 6 and 7. There was debate on the penalties for these criminal offences in another place and the Select Committee on Delegated Powers and Regulatory Reform issued two reports. The Government tabled amendments to bring the Bill into line with those reports' findings and the Select Committee agreed that the delegation to create offences with these maximum penalties was acceptable. I therefore believe that further changes are unnecessary. I hope that hon. Members will accept that the further amendments are unnecessary, given that there are precedents and there will be consultation before penalties for particular offences are finally fixed, and bearing in mind that the matter was exhaustively examined by their lordships and by the very thorough Select Committee, and that the Government were prepared to accommodate its requirements.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

I have a question for the Minister. He keeps referring to consultation, but surely it is our role to be consulted, as a Committee, on the Bill's wording. If we now find that the Bill's fines and penalties are to be re-evaluated and consulted on again, we are not really in a position to do our job properly today. Is that wrong?

Photo of Michael Meacher Michael Meacher Minister (Department for Environment, Food and Rural Affairs) (Environment)

I think that it puts things in a misleading fashion. We are talking about framework provisions, which have to be agreed and are subject to cross-examination and investigation by this Committee. The Government are accountable for that. However, we have not at this stage consulted on the precise application of the Bill's framework provisions. It will be for hon. Members and any other stakeholders—to use a rather ugly word—who wish to, to comment on them then. It may well be that we can return to that later, although probably not during the passage of the Bill. The matter will come before the House again and if the Opposition feel strongly enough, they can then force a debate.

Photo of Norman Baker Norman Baker Liberal Democrat, Lewes

For the sake of clarity and completeness, will the Minister confirm that any fines applied pursuant to this clause will be applied to individuals and not, in any circumstances, to a waste disposal authority?

Photo of Michael Meacher Michael Meacher Minister (Department for Environment, Food and Rural Affairs) (Environment)

I can confirm that that is so.

Having answered all the other points, I repeat that I hope that the hon. Member for Leominster is persuaded that we have taken full account of, and met, some of the objections made, and that he will not press his amendment.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

First, I apologise to the Committee if I was facetious in my opening comments. I felt that the point was extremely serious but that it would do no

harm to show that both sides were prepared to debate the matter fully.

Amendment No. 46 would have dealt with the question of the size of the fine, and would have been helpful. However, the majority of the amendments cover the length of sentencing. I do not agree that the Minister was especially helpful or clear in defining the difference between a three-month and a two-year sentence. He did not really describe the type of person that he thought might receive such prison sentences. However, he gave us good precedents from the Competition Act 1998, the Financial Services and Markets Act 2000, the Fair Trading Act 1986 and the Charities Act 1993, although I was grateful to him for taking my intervention as I still believe that in respect of that legislation, the purpose of the prison sentence is to prevent corruption for personal gain. It is likely that in respect of this measure, any corruption will be less obvious; therefore it will be more difficult for a court to decide, in what will be a complicated case, who is guilty of corruption. The Minister has done a valiant job defending his Bill but considering the titles of clauses 6 and 7, I am not completely happy that he has answered all my questions. However, it would be wise to return to the matter on Report, especially as consultation has been mentioned. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 8 ordered to stand part of the Bill.