Clause 9 - Duty not to exceed allowances

Waste and Emissions Trading Bill [Lords] – in a Public Bill Committee at 10:30 am on 8th April 2003.

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Photo of John Hayes John Hayes Shadow Minister (Environment, Food and Rural Affairs) 10:30 am, 8th April 2003

I beg to move amendment No. 48, in

clause 9, page 7, line 7, at end add

'Waste disposal authorities are the responsibility of the allocating authority and any penalty must be specific to the offending waste disposal authority only'.

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

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

No. 49, in

clause 9, page 7, line 9, leave out 'penalty' and insert 'financial penalty.'.

No. 3, in

clause 9, page 7, line 27, at end insert—

'( ) All monies in respect of financial penalties collected under this section shall be hypothecated directly to waste disposal authorities as directed by the allocating authority.'.

No. 12, in

clause 9, page 7, line 27, at end insert—

'( ) Any penalty, including supplementary penalty, shall in total be of a level which would exceed that which would have been spent by the waste disposal authority to meet the target.'.

No. 50, in

clause 9, page 7, line 36, at end add—

'( ) All monies collected from financial penalties under this section will be hypothecated directly to waste disposal authorities as directed by the allocating authority.'.

No. 13, in

clause 10, page 8, line 9, leave out 'may' and insert 'is thought likely to'.

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

The amendments return to the issue of moneys, fines, penalties and hypothecation, which has already been mentioned, but it is important to consider where the money that is collected might end up. Anxiety has been expressed that because of the process by which it is collected, money from fines might not find its way back into the system in a form that would help to ease the financial burden that I mentioned earlier. We can debate the scale and size of the burden, but whatever size it may be, it should be dealt with from the money collected in fines. That is the hypothecation issue, which is dealt with in amendment No. 50 in my name and that of my hon. Friend the Member for Leominster, and in amendment No. 3, which will no doubt be discussed at length by the hon. Member for Lewes, who said that he decided on it when he was on a train journey. He will probably claim that it was entirely of his own making, although the Conservatives had already decided to support the principle of hypothecation before he invented it on his journey.

It is important for the Committee to debate hypothecation and refunding through local authorities. It is a right and appropriate way to allocate the moneys; we would bitterly resent those moneys being collected and taken away from local government altogether, as there is no guarantee that the money will find its way back to local government, let alone to a particular local authority. The money should find its way specifically back into the process that we are discussing in the Bill, which we support as a matter of principle.

The amendments refer to the level of a penalty not exceeding the amount that the local authority would have spent in order to meet the targets, as the Minister mentioned briefly in a previous debate. It is entirely appropriate that the penalty should be in keeping with the costs associated with the targets. If the penalty were out of tune and disproportionate it would send entirely the wrong message to local authorities and would undermine the sense that this is a fair and reasonable provision. The amendment concerns both that and hypothecation.

It may be worth saying at this stage that there is no disagreement about penalties per se. The Bill should be supported by the right sort of penalty and fine. Our debate on the previous group of amendments was not about a decision that the Opposition had taken in principle that fines or penalties were not a good idea; it was about the scale and nature of those penalties. I welcome the comment by my hon. Friend the Member for Leominster that that was a matter to which we might return. I do not want to cover old ground, but that should be put on the record. We are in favour of penalties, but they must be appropriate.

In addition, the amendments talk about the penalty being specific. It is not simply a matter of ensuring that the money is paid back, or of the level of the fine, but of the targeting of that penalty. We must target the penalty at the waste disposal authority that has committed a specific act and has acted in breach of the requirements of the Bill and the spirit and the principle that lies behind it. The penalty must be

targeted at that waste disposal authority in a particular and specific way.

That is the strength of the amendments. They are important not just in themselves but because once again—I make no apologies for repeating this—they send an important signal to local authorities. No local authority will mind taking on responsibilities that are properly funded, clear, precise and based on good principle and where the associated penalties are seen to be fair, reasonable, proportionate and targeted and there is a sense in which they have a good purpose. Paying back the local authority to help it support the function would be a good purpose.

Good purpose is a principle that will underlie the Bill, particularly its financial aspects, and should inform the collaborative, partnership approach that the Opposition have consistently advocated. In summary, that is precisely what the amendments do. I do not see them as particularly contentious. I anticipate that the Minister will grasp them with both hands as in my judgment they would considerably improve the Bill.

Photo of Norman Baker Norman Baker Liberal Democrat, Lewes

I do not regard the amendments as contentious either, but I am not sure that I share the hon. Gentleman's optimism that the Minister will grab them with both hands and incorporate them in the Bill. Time will tell. We shall find out shortly. I shall deal with the amendments as they are set out in the group. Amendment No. 48 ensures that

''Waste disposal authorities are the responsibility of the allocating authority and any penalty must be specific to the offending waste disposal authority only''.

That is common sense. No one could possibly object to that principle. Although it is not spelled out in the Bill, I am sure that it must be the Government's intention. I cannot think that they intend anything else. That is therefore uncontroversial and sensible and should be incorporated in the Bill.

Similarly, amendment No. 49 qualifies ''penalty'' with ''financial''. Perhaps we take it for granted that penalties are financial but it does no harm to ensure that that is the case. That is equally uncontentious. I am happy to tell the hon. Member for South Holland and The Deepings that amendment No. 3, which stands in my name and that of my hon. Friend the Member for Guildford, replicates an amendment tabled by his Conservative colleagues in the House of Lords. It was not drawn up by me on the train, although the other one was. I was delighted to see that amendment tabled in the House of Lords under the Conservative banner, not least because hypothecation has long been a Liberal Democrat concept. I welcome the fact that its influence is spreading to the Conservative Benches.

It is absolutely right that hypothecation should play a role in the Bill, in wider environmental legislation and, indeed, in legislation generally. In that respect, it seems to work well in certain areas—in relation to speed cameras, for example. I hope that the Government will consider using it more widely, because it has public support.

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

I do not want to be pedantic, nor do I want the hon. Gentleman to say something that he

could not robustly defend. It would not be fair to say that hypothecation was a Liberal Democrat concept. Liberal Democrats may frequently refer to it or draw on it in forming policy, but I would not say that it was a Liberal Democrat concept, and I would not want the hon. Gentleman to say something inaccurate.

Photo of Norman Baker Norman Baker Liberal Democrat, Lewes

Well, if the hon. Gentleman was trying not to be pedantic, he set about proving the point in a peculiar way. Applying the words ''Liberal Democrat'' to a concept could imply that it originated with us or that it belonged to us. The concept of hypothecation certainly belongs to us, so the hon. Gentleman's point is not valid.

To return to amendment No. 3, it is absolutely right that all moneys raised by means of financial penalties should be returned to waste disposal authorities. After all, disposal authorities and, indeed, collection authorities will be asked to spend a great deal to meet what, by the Government's own admission, are onerous targets. That will require a good deal of investment, and it would be unfortunate if a waste disposal authority that failed to meet a Government target despite having tried its best were subject to penalties. It would then be less able to meet its future targets, because it would have paid a fine to the Treasury and would have less money. That cannot be what the Government intend.

It is right in principle to use incentives and disincentives to drive waste disposal authorities in the right direction, but it cannot be sensible to create a vicious circle. If moneys are progressively withdrawn from disposal authorities that cannot meet their targets, they will have less money to meet future targets, and fines will pile up. That cannot be what the Government intend, and there must be a way out of that situation. Hypothecation, which would circulate money back to waste disposal authorities—not necessarily to the offending authority, but to authorities in general—would be a sensible way of proceeding. I honestly cannot see any objection to that, although the Minister will doubtless come up with something.

Amendment No. 12 is also in my name and that of my hon. Friend the Member for Guildford. It raises an important point to which I referred on Second Reading and to which the hon. Member for South Holland and The Deepings and the Minister have also referred. The amendment states:

''Any penalty, including supplementary penalty, shall in total be of a level which would exceed that which would have been spent by the waste disposal authority to meet the target.''

That is a terribly important principle. If it is not in place, an authority may calculate that the best method of proceeding is to incur a penalty. It may say, ''All things considered, that's the cheapest option. We will incur the penalty.'' That cannot be sensible, because it encourages the disposal authority to break the law or—that is perhaps a bit strong—to incur penalties. That is the opposite of what the Minister wants. The amendment therefore seems sensible, and I noticed that the Minister was nodding sagely while I discussed it. I hope that that means that he is sympathetic to it.

Photo of Gregory Barker Gregory Barker Conservative, Bexhill and Battle

The hon. Gentleman makes a sensible point, although I do not think that such decisions will be made in the casual way that he implied. Local authorities that have had an iniquitous grant from central grant will conceivably have to decide whether to fund social services, services for old people or special schools. In drawing up a list of political priorities, they may be forced—against their better will and better judgment—to go down the route that the hon. Gentleman described. That may be cheaper and better, and it may enable them to fund other social responsibilities.

Photo of Norman Baker Norman Baker Liberal Democrat, Lewes

I agree. The hon. Gentleman describes a real scenario. I do not want to go off at too much of a tangent, but it is worth noting that the average council tax rise this year is 9 to 10 per cent.—those are the Government's figures, which they provided in a written statement last week. We have had horrendous rises in East Sussex, as the hon. Gentleman will know. In fact, I have an Adjournment debate on that very subject on Friday, in case he happens to be in the Chamber.

Local authorities will be squeezed, notwithstanding the extra funding. We have a conundrum because we are told that local authorities are given huge amounts of extra money and yet every single authority—Labour, Liberal Democrat or Conservative—has introduced huge rises in council tax. That is an extraordinary situation, which cannot be explained by the Government's figures. There is, undoubtedly, financial pressure on local authorities.

Local authorities will, undoubtedly, consider what is in the best interests of their electorate and, undoubtedly, weigh up their responsibility in relation to waste along with their responsibilities for social services, education and all the other matters with which they must deal. They will calculate how best to proceed on that basis, and if they conclude that they are short of money, as they probably will be, and that there is a way out that will cost them less money, they may well take it. That is why I believe that, in the interests of the environment, this particular avenue must be shut off, but we must also ensure—this is the quid pro quo—that local authorities have the necessary resources to enable them to discharge their duties. I am not convinced that they always have that money.

Amendment No. 50 is an alternative version of amendment No. 3, so there is little difference between the Liberal Democrats and the Conservatives on that matter.

Amendment No. 13 stands in my name and that of my hon. Friend the Member for Guildford. Yesterday, I raised a query with the Clerk because it seemed slightly odd to include the amendment in this group, first because it relates to clause 10 and, secondly, because it seems to have little to do with the matter before us. However, as it has been included in this group, I shall briefly speak to it. Amendment No. 13 raises a linguistic point, because I want to be sure that I understand the Government's intentions.

The provision relates to the circumstances in which a monitoring authority from an area will deal with a waste disposal authority's performance. Clause 10(2)(e) states:

''The monitoring authority for an area shall . . .

comply with any directions by the allocating authority . . . where it appears to the allocating authority or the monitoring authority that a waste disposal authority in the area is or may be liable to a penalty''.

It is a small point, but I am just trying to establish whether ''may be'' relates to present or future circumstances, because it seems to me that it is open to both interpretations. It might be a small linguistic point but its implication is important. If ''may be'' relates to a potential future event, it allows the monitoring authority—the Environment Agency or whoever it happens to be—to second-guess the activities of a waste disposal authority, anticipate what it might do and take action on the basis of what it thinks might happen, rather than on the basis of what is actually happening. That situation would be worrying.

The monitoring authority cannot be allowed to anticipate what a waste disposal authority will do and then say, ''You are going to do this, so we are going to take action.'' That would be terrible. The monitoring authority must wait for the circumstances to arise and, then, if it is unhappy, the provisions in the clause will kick in, but they must be present, not future, circumstances. We must ensure that a present power, not a future power, is given to the monitoring authority.

That is why we have suggested that, to clarify the provision, the words ''may be'' should be removed and replaced with ''is thought likely to'', so that the clause would read, ''is thought likely to be liable'', which would relate to present circumstances. I hope that the Minister understands that linguistic point. We must limit the monitoring authority to what is happening now, rather than allow it to take action on the basis of what it thinks might happen in future. That might be the Government's intention, but the clause is open to a dozen interpretations.

With that comment, I profess my support not only for the amendments tabled by the Liberal Democrats but for those tabled by the Conservatives. I shall be interested in the Minister's response, but the question of hypothecation is important. Unless the Minister is able to satisfy me on that, I should like to ask for a second vote on amendment No. 3.

Photo of Mr Jonathan Sayeed Mr Jonathan Sayeed Conservative, Mid Bedfordshire 10:45 am, 8th April 2003

At the moment, I am reading a book about the genesis and development of the English dictionary, which is fascinating. Sam Johnson was so celebrated because he drew on the examples of the use of words over a 150-year period in order to explain what they meant. We must leave it to a latter-day Sam Johnson to decide what ''hypothecation'' means and who used it first. However, it is clear that removing money from a local authority by means of a penalty to fill the Chancellor's back pocket would not be attractive to any member of the Committee.

We had a canter round this course previously. I shall make the same points now as I did then, although

first I should like clarification from you, Mr. Griffiths. Is amendment No. 47 not in this group because, even though it relates to clause 9, the principle was discussed earlier, or was it struck out for another reason?

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

That amendment was debated earlier, with amendment No. 30.

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

Thank you for that clarification, Mr. Griffiths. I shall be fairly brief. I agreed before with the Minister that it was sensible for penalties to be specific to the offending waste disposal authority only. However, I said then, and I continue to say, that I am uncomfortable with the relationship between the waste disposal and waste collection authorities.

I accept that Government amendments Nos. 21 and 20 require a waste disposal authority to consult the waste collection authority in directing the collection of separated waste, but let me give an example that I gave previously. Particularly when two authorities are of differing political persuasions and an election is close—the cost of collection and disposal will be germane to their budget setting—there could be conflict, and however much consultation there is, they may not reach an answer. The collection authority could frustrate the activities of the disposal authority, or the disposal authority could impose on the collection authority a highly onerous collection system that was different from what was practised previously. Unless both authorities can operate together in a much clearer way, even when they would otherwise be in conflict, the Bill will contain a fairly obvious cause for concern.

Yes, the penalties should be on the waste disposal authority. We hope that that authority will work co-operatively with the waste collection authority, but there can be problems. The imposition of penalties could give rise to similar problems, in that, although they may be imposed on the disposal authority, it would not necessarily be able to succeed in a passing-off action on to the collection authority.

The Minister conceded that the cost of compliance should be less than the cost of the penalty. That makes sense to everyone, but is not clear in the clause. Finally, I return to my point about hypothecation, which I made previously. If money is taken out of a waste collection and disposal system that is already creaking and under pressure in order to fill the £30 billion or £40 billion hole in the Chancellor's pocket, that will be a mistake and bitterly resented. That money should be hypothecated; it should go back to local authorities. I hope that no money will go back to local authorities because everyone will behave themselves. However, any piece of legislation must allow for things to go wrong, and I do not believe that the Bill deals adequately with the relationship between the disposal and collection authority. I look to the Minister to stiffen up this part of the Bill.

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

This is an interesting debate. The hon. Member for Mid-Bedfordshire spoke about the issue of hypothecation, whatever it means, and the hon. Member for Lewes spoke about whoever originated the concept—I do not know the answer.

Hypothecation is, however, an important issue, and is also a sensitive one for the Government. The Treasury is responsible for collection of revenues, but the decision on their allocation is made by the Cabinet. Hypothecation, which is an exception to that, will be carefully prescribed. I will speak further about that matter later.

I believe amendments Nos. 48, 49 and 13 to be unnecessary, and I do not entirely understand the intentions behind them.

Amendment No. 48 seeks to ensure that any penalty is specific to the waste disposal authority concerned. Only a waste disposal authority that has failed to carry out its duty under clause 9(1) to landfill within its allowances will be liable to a penalty. Waste disposal authorities will not incur penalties due to the failure of other waste disposal authorities to comply with their duties. Once a waste disposal authority has exceeded its allowances, it will automatically be liable to a penalty. The level of the penalty will be determined in accordance with regulations, and those may provide for a fixed penalty or a formula for calculating a penalty.

I should add that the same penalty or formula will apply to each authority—there will be no discrimination—but an allocating authority has the power to relieve liability to a penalty, or to extend the time for payment. I believe that to be a sensible fall-back position, which may occasionally have to be used.

Amendment No. 49 would remove the word ''penalty'' from clause 9(2) and replace it with the words ''financial penalty''. However, it is already clear from the provisions of clause 26 that the penalties are financial, so the amendment is not necessary.

Amendment No. 13 would require the monitoring authority to notify the allocating authority only where it considers that it is likely that a waste disposal authority is liable to a penalty. That is the ''may be'' point raised by the hon. Member for Lewes. The monitoring authority must notify the allocating authority where the waste disposal authority may be liable to a penalty. That is a present circumstance, and is not intended to entrap a waste disposal authority in some future unpredicted circumstances.

Photo of Norman Baker Norman Baker Liberal Democrat, Lewes

I am glad that that is the Minister's intention, but does he not allow that the verb ''may'' has a future purpose as well as a present one, and that therefore the use of the word ''may'' is open to subsequent misinterpretation?

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

That is not the legal advice that I have received, but I am prepared to examine the issue further, perhaps in the period before this afternoon's sitting. If there is any dubiety or ambiguity, I will return to the point.

Amendment No. 13 refers to a monitoring authority having to notify the allocating authority where it considers that it is likely that a waste disposal authority is liable to a penalty. That would mean that allocating authorities might not receive information

about a waste disposal authority that might be liable for a penalty until it was too late to do anything about it. An allocating authority would need information of that kind as early as possible, so that it could investigate and require the necessary information from the waste disposal authority, and perhaps help that authority to avoid the penalty altogether.

Amendment No. 12 would add a new subsection to clause 9 requiring any penalty, including any supplementary penalty, to be higher in total than the amount that the WDA would have to spend to meet its targets. I believe that there is general agreement on that throughout the Committee and the matter was raised on Second Reading and in the Committee by the hon. Members for Lewes and for Mid-Bedfordshire. Obviously, it is imperative for the whole trading system that penalties are sufficiently high to make it more unattractive for WDAs to opt to take a penalty than to put in place the required changes to meet its targets; otherwise, the whole landfill allowance market will collapse.

We are well aware of the issue, and the level of penalties will be subject to consultation. We will work with economists to ensure that the final level of penalties is appropriate, but, having given a commitment that that is the principle by which they will be determined, I do not think that it is necessary to make changes to the Bill.

Amendments Nos. 3 and 50 address hypothecation of penalties back to WDAs, which, as all hon. Members have said, is important. Indeed, the hypothecation of resources—perhaps we should say recycling of resources, although that may be ambiguous in the context of the Bill—came up several times in another place. The amendments would require penalties imposed on those authorities that fail to landfill within their allowances to be redistributed to WDAs as directed by, in the case of England, the Secretary of State.

I am wholly sympathetic to the purpose of the amendments. Penalties are vital as a means of providing adequate incentives to act in a certain way, but it is important that they do not place a destructive drain on the resources available to the waste disposal system. Several hon. Members made that point and I entirely agree with them. Some sort of hypothecation arrangement along the lines suggested in the amendment would clearly be beneficial, but that is probably the nearest that I can get to the wish of the hon. Member for South Holland and The Deepings for me to embrace and grasp the amendments with enthusiasm, because there is a caveat.

It is equally important that the framework for transferring resources from penalties back into the waste management system is thoroughly thought through. Transgressing authorities should not benefit, or receive an uncovenanted gain, from their own offence, and we must have a system that ensures that that does not happen. Discussions are taking place with a view to reaching an acceptable and workable solution. It is important that transgressing authorities continue to be penalised.

Photo of Mr Jonathan Sayeed Mr Jonathan Sayeed Conservative, Mid Bedfordshire 11:00 am, 8th April 2003

Perhaps I can assist the Minister. He likes the idea of hypothecation and of money staying within the system. It is within his power to support amendment No. 3 or amendment No. 50 and to return with a better amendment on Report.

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

Yes, I understand that, but my point is that I am unwilling to commit myself to specific details on hypothecation given the sensitivity of the discussions within the Government. If the amendment were pressed, and I hope that it will not be, I would be in the unhappy position of having to resist it because of the state of negotiations within the Government, and that would suggest that I am opposed to it, which I am not. I am simply asking the Committee to trust that the Government are serious about the matter. I am not trying to make a point to save a vote. We have already accepted that any increase in the landfill tax over and above the present escalator increase will be recycled to local authorities and businesses. That important precedent shows that we are committed to the principle.

Several hon. Members rose—

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

Three hon. Members wish to intervene. I give way first to my opposite number.

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

I am flattered that the Minister should choose to give way first to me. We are now focusing on the most important issue arising from this group of amendments; it is also a matter of financial significance. The Minister said that he is in sensitive negotiations, and one understands that Governments are, as he said, always in difficulty over hypothecation.

I put it to the Minister that one could interpret the matter rather differently. He could go back to those negotiations inspired by the fact that the Committee feels strongly about the matter. He might want to say to his colleagues in the Government that, despite an agreeable discourse, the Committee thought the matter so important that it needed to press the amendment to a Division.

It is not for me to second-guess the hon. Member for Lewes, but my slightly preferable amendment No. 50—it is a rather finer and better-honed version of the hon. Gentleman's amendment No. 3—might assist the Minister in those negotiations.

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

I appreciate the hon. Gentleman's solicitude in trying to stiffen my resolve in further discussions. As I said, we are looking at a number of options for achieving what we want; but hypothecation would not necessarily require an amendment to the Bill. For that reason, I am reluctant to accept any amendment.

Photo of Gregory Barker Gregory Barker Conservative, Bexhill and Battle

On the last point, about hypothecation not needing to be mentioned in the Bill, I have no doubt that the Minister is personally committed to keeping resources within the system, but we are dealing with legislation that, with all due respect, will outlive the Minister. We cannot be certain that whoever fills his place in later years will have the same commitment.

We are dealing with matters of principle, not just personal administration. We must be assured that at no time will money be withdrawn from failing waste

disposal authorities and sent elsewhere. We must get away from the twin culture that rewards the best and penalises the worst, because it creates ever-larger divisions.

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

I am sorry that the hon. Gentleman has so little faith in my longevity. However, I take his general point, which is often argued, that whatever Ministers say it is better to have matters in black and white in legislation. Indeed, I remember making that point myself in the long years of opposition that my party endured. My problem is that, in our view, it is not necessary to make such an amendment. I would have to persuade my hon. Friends that it was necessary, for the reason stated by the hon. Member for Lewes. However, the fact that it is being pressed is certainly relevant, and these reports are read by the relevant parts of Government. I shall be as helpful as I can on that point.

Photo of Norman Baker Norman Baker Liberal Democrat, Lewes

The hon. Member for Bexhill and Battle is absolutely right to say that these things have a habit of slipping away if they are not included in the Bill. Personal assurances, however genuine they may be, are not necessarily acknowledged by subsequent holders of the office. We have a relatively short time to debate the Bill, and it will not be long before Report and Third Reading. Will the Minister tell us who is involved in his discussions? Does it include the Treasury? When will the discussions be complete? Will he be able to come back before enactment to confirm that it is the Government's intention that all moneys from financial penalties will be hypothecated?

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

That is a perfectly reasonable request. I would like to say that I could oblige, but this is a matter of considerable resonance; discussions are still going on within the Government, and I cannot say at what stage they will be completed. It depends on whether colleagues are prepared to agree, and I cannot pre-empt the possibility that they may not. I would like to be able to clarify the Government's intention by the time the Bill is considered on Report, but that is as much as I can say. I cannot give a guarantee, but I certainly hope to be able to provide clarification, and I will do all that I can behind the scenes to ensure that that is the case.

I assure the Committee that the Government are serious about the issue and that we would like to be able to make provision, whether that is in the Bill or not.

Photo of David Kidney David Kidney Labour, Stafford

Will my right hon. Friend give way?

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

I was climaxing in my peroration, but I am happy to give way to my hon. Friend.

Photo of David Kidney David Kidney Labour, Stafford

Yes, I am waving, not drowning. In support of the hon. Member for South Holland and The Deepings on the message that the Committee sends to the Government, may I add from these Benches a voice saying that we would like the money to stay in the system? However, I agree with the Minister that we do not want to adopt the words in the amendment as they would pass back to offending local authorities the money from the penalties that they had paid, and we do not want that.

A possible way forward, which my right hon. Friend mentioned, is that his Department has some control over money from the landfill tax credit scheme and that in future there will be extra landfill tax money. Will the Minister write to members of the Committee to tell us how the money from that scheme will be distributed to councils and to the waste and resources action programme? That might provide us with a model that we could use for this money.

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

I agree with my hon. Friend that the amendment is flawed in that it would not prevent what we all agree should not happen—that the transgressing authority benefits from its transgressions.

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

Let me answer the first intervention, if I may. My hon. Friend the Member for Stafford (Mr. Kidney) is right to say that more money will be coming into the system. There is a further source of substantial funding that I did not mention earlier, as I referred to it in discussions on another clause, and that is the hypothecation of the landfill tax escalator increase over and above the current level, which will reach £15 in 2004. The Chancellor has already said that he will raise it to £35 with a minimum increase each year of £3, and he may decide to make it more. That is a further £20. The extra amount, if it is hypothecated when it goes to local authorities, will be very substantial indeed. It will be several hundred million pounds, and it may approach £1 billion.

My hon. Friend also mentioned the landfill tax credit scheme. If a grant has already been made or was successfully applied for before 31 March of this year, it can be spent in the current transitional year, which extends to 3 April 2004. We are still discussing how the sustainable waste management public expenditure would operate. There is probably an extra £100 million in the system, and local authorities would benefit from a considerable amount of that. However, the exact arrangements have not yet been finalised.

Photo of Norman Baker Norman Baker Liberal Democrat, Lewes

I wanted to deal with an assertion that has been made two or three times: that amendment No. 3 or amendment No. 50 would return fines to the offending authorities. Neither amendment says that. Both amendments refer to ''waste disposal authorities'' in the plural and, crucially, both state

''as directed by the allocating authority.''

It would be for the Secretary of State in England and the appropriate authorities elsewhere in the country to decide how the fines would be sent back to waste disposal authorities; it would be in their power. If the amendment is flawed, it is because the Secretary of State would be giving the money back to the waste disposal authority. I do not believe that the amendments are flawed in the way that has been suggested.

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

Yes. Amendment No. 50 states that monies

''will be hypothecated directly to waste disposal authorities as directed by the allocating authority.''

The Secretary of State can therefore ensure that a transgressing authority does not gain, although if I have caught correctly the sense of what is being said, there is a wish for hypothecation on an automatic basis—not dependent on political decision making—but according to the formula that precludes transgressing authorities from gaining. I may be corrected.

Photo of John Hayes John Hayes Shadow Minister (Environment, Food and Rural Affairs) 11:15 am, 8th April 2003

The Minister has not entirely misread the Committee, but I would put things slightly more subtly. The wish of Opposition Members—on this occasion, I am in the happy, or perhaps unhappy, position of being able to speak for the Liberal Democrats, too—is that, as a rule, there should be some transfer back to WDAs that is predictable . However, the amendment would specifically allow discretion so that that was not automatic. The general sense is that some transfer back should be the anticipated result, but there should be sufficient flexibility to allow the Secretary of State, the allocating authority, to have a degree of discretion and to intervene. In spirit, the Minister is right, but ''automatic'' is not quite the right word.

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

Okay. I am prepared to accept that, so I should play down, if not withdraw, the objection to amendments Nos. 3 and 50 on the grounds that they could have unintended results. I can see that, from their wording, that does not appear to be so, but I retain my present position whereby I cannot agree to those amendments because I am not yet in a position to do so. I hope that I can clarify this important matter further by the time the Bill is considered on Report, when I am sure that we will return to it. I hope that neither amendment will be pressed, on the grounds that I have indicated that the Government are serious about this matter. There is a very good precedent in statute, but I cannot take the matter further now, and I hope that the Committee accepts that.

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

It may be worth saying something about our discussion on the other amendments in the group. The Minister is right that, in general terms, these are probing amendments. The purpose of the Conservative amendments was certainly to tease out comment from the Minister and to establish precisely the Government's intention. Although amendment No. 48 would help by providing clarification, I accept the Minister's point that it is not strictly necessary because its effect is implicit in the Bill.

On amendment No. 49, the Minister suggested that a later part of the Bill clarifies that the penalty is financial. Again, the amendment is important from a probing perspective, but I broadly accept his assurance that, although it is not unhelpful, it is unnecessary.

I make no particular comment on the ''may be'' issue, if I may describe it so, which the hon. Member for Lewes elucidated. Amendments Nos. 12 and 13 are in his name.

The important matter is amendment No. 50 and, to a slightly lesser extent, amendment No. 3. They have brought an important issue to a head. I am grateful to the Minister for expressing his views, which are close to our own, and of course I understand the sensitivity of discussions in the Government on these matters. However, my judgment is that we would want to press amendment No. 50. I think that that would be quite helpful to the Minister—he may take a different view—because it would demonstrate how strongly the Committee feels about these matters. I do not doubt for a second the absolute honesty of the Minister's remarks, but dropping the amendment at this stage would not reflect the depth of the Committee's feelings.

I suspect that the Minister will have the opportunity to return to the matter on Report. Far be it from me to predict such things, but the Government might table a similar amendment with slightly tighter wording—who knows? I happen to like our wording, but that is a matter of nuance, judgment and aesthetics. I am therefore inclined to press amendment No. 50 to a vote.

It is not for me to say what the hon. Member for Lewes will do about amendment No. 3; it is for you to test him on that, Mr. Griffiths. However, we might be inclined to support it, because, despite my earlier jibes, we very much accept its sense and content, as the hon. Gentleman knows.

That is where I stand on the amendments. We have had a useful debate, and we shall no doubt return to these issues when the Bill reaches its later stages.

Photo of Norman Baker Norman Baker Liberal Democrat, Lewes

I am grateful for the Minister's serious and thoughtful response to the amendments. He probably went as far as he could in the circumstances, but the bottom line is that he could not confirm that the intention behind the amendment would become Government policy, that the words in the amendment, or similar words, would be incorporated in the Bill, or that he would be able to persuade his colleagues of the validity of our argument. He could confirm that he is supportive and sympathetic, and that he understands the arguments, but that will not necessarily produce the legislation that we want. I therefore intend to press amendment No. 3 to a vote, and I hope that that will steel the Minister's arguing power with his colleagues.

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

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: No. 3, in

clause 9, page 7, line 27, at end insert—

'( ) All monies in respect of financial penalties collected under this section shall be hypothecated directly to waste disposal authorities as directed by the allocating authority.'.—[Norman Baker.]

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 10.

Division number 3 Adults Abused in Childhood — Clause 9 - Duty not to exceed allowances

Aye: 7 MPs

No: 10 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

Clause 9 ordered to stand part of the Bill.