I beg to move amendment No. 14, in
clause 12, page 9, line 19, at end insert
'equivalent to that specified in section 9'.
I welcome you back to the Committee, Mr. Amess. This morning, we had an interesting and lively debate about how, and at what level, the penalties associated with clause 9 would be set to ensure that a disposal authority was not tempted to pay the fine, rather than investing in appropriate technologies to meet its obligations. Clause 12 relates to the other side of that activity. What are the records? How do we know what people are doing? How can we audit the information that they have?
Another query is about the penalty if people fail to keep accurate records. We are concerned about that. On the face of it, one might think that keeping records might be like filling in a VAT return: if someone does not fill in their return properly, they might receive a small fine the first time and a bigger fine the next time. However, I suspect that that is not the case in this respect. I am interested to hear what penalties the Minister has in mind.
Of course, one way in which people can avoid the discovery of things that they have failed to do is by failing to keep accurate records. Records should be auditable. It should be possible to prove that someone has been working correctly within the scheme and that the records that they produce are accurate. It should be possible to measure their performance using open and transparent information, to ascertain whether they have exceeded the allowances.
One might find, however, that operators have a little deal going on the side and that things are not audited correctly. Someone may attempt to cover something up in association with a landfill operator or someone else. Clearly, a local authority that failed to keep records might be unable to identify where it was failing in its duty, and what it was doing on landfill.
We are particularly concerned about any cooking of the books, as opposed to people just being uncertain about what box to fill in, which should be perfectly easy to do. Where people are prepared to commit fraud to cover up the fact that they have failed to meet their obligations, the penalty should reflect the penalties that would apply under clause 9. It should be a hefty penalty. If someone covers up the fact that a disposal authority has failed, the penalty should reflect that.
I was slightly confused because the notice of amendments related this amendment to clause 14. That is obviously an error because it relates to clause 12. Once we get over that hurdle, the effect is to ensure that penalties under clause 12 for breaching rules of a scheme are equivalent to breaches of the landfill allowances. All civil penalties under chapter 1 of the Bill are determined by clause 26. The allocating authority will set out in regulations the penalty or the calculation to determine a penalty in each circumstance. The amendment is unnecessary because clause 26 applies to both clauses.
The hon. Lady made a fair point. There is a great difference between breaches in respect of landfill allowances and those in respect of rules and we would not expect the same penalty to apply to both. Breaches of rules might for example be to do with
record keeping, which is obviously important, but no one suggests that that is as serious as breaching the landfill and putting targets at risk. I take the hon. Lady's point and when we determine by regulations what the powers in clause 26 permit us to do in respect of setting penalties, we shall consult and take into account the different types of activity.
The central point is that there must be no incentive to falsify or obscure records on the grounds that the penalty for that offence is less than that which would apply if the obscured offence were revealed.
Once again, this goes back to the basic principle, which the hon. Gentleman raised on Second Reading and which is right, that the penalty for non-compliance must exceed the cost of compliance. That must be true at all points. There must be a sizeable rather than a marginal difference between complying with, often, fairly minor costs and breaking the rules, for which there should be a significant deterrent penalty. That is the basis on which we should determine the penalties. I hope that the hon. Lady is satisfied. She made a fair point that there is a major difference between the two and that there should be adequate penalties for each, but I assure her that clause 26 governs both the clauses, so I hope that she will feel able to withdraw the amendment.
I thank the Minister for his reply and the intention behind it. I am still concerned and hope that clause 26 will put in place appropriate penalties for trying to cook the books through failing to keep correct records and hiding evidence of a breach of clause 9. However, having listened to the Minister's words, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 12 ordered to stand part of the Bill.