Clause 26 - Penalties under Chapter 1: General

Waste and Emissions Trading Bill [Lords] – in a Public Bill Committee at 10:45 am on 29th April 2003.

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Photo of Norman Baker Norman Baker Liberal Democrat, Lewes 10:45 am, 29th April 2003

I beg to move amendment No. 16, in

clause 26, page 17, line 7, at end insert

'for a maximum period of one year'.

The amendment returns us to a point that was discussed earlier, namely the response of waste disposal authorities to the new regime that will be created for them. It also concerns the response of allocating authorities to situations that may arise. I am very much in favour of subsection (3), which clearly

sets out for waste disposal authorities the regime that will be put in place with regard to fines, when penalties will be enforced, the rules for calculating their amounts, provisions as to where payments are made and so on. Waste disposal authorities can be in no doubt as to the consequences if they fail to meet their targets or otherwise behave in a way that would incur penalties. That is admirable.

If we are to see the step change that the Government want to happen in terms of waste disposal methods, especially with regard to increased recycling, it is absolutely right to have penalties and to enforce them. So, subsection (3) seems absolutely admirable to me, but we have a rather different scenario in subsection (1). That is where the amendment comes in. In subsection (1), we see that the allocating authority may, notwithstanding the regime clearly set out in subsection (3),

''extend the time for paying the whole or part of the penalty or any interest on it''.

We suggest a 12-month limit on that extension.

Subsection (1)(c)(ii) even gives the allocating authority the power to

''relieve the waste disposal authority, in whole or in part, from liability to the penalty or any interest on it.''

That is a curious arrangement. On the one hand, the clause sets out clear rules with firm penalties, but, on the other, the allocating authority could say, ''If you don't like it, or if it is not working, we shall waive the penalty entirely.''

There are two dangers in taking such an approach. First, subsection (1)(c) sends the message to waste disposal authorities that, notwithstanding the penalty regime, they still have the option to argue with the allocating authority over making representations to the Government—I put it bluntly—that they should be exempted from paying the penalty because of their particular circumstances, that it should be scaled down or that they should at least have more time to pay.

That would be a charter for special pleading for waste disposal authorities, and I predict that they will be queuing up at the Minister's door saying that they should not pay the penalty that the rules suggest. That cannot be what the Government want. They cannot want the Minister of the day interfering and negotiating with waste disposal authorities, saying ''If you do this, you will not incur the penalty,'' or, ''If you do that, we can shave the penalty down.'' That would give undue power to the Secretary of State.

It would be much better to have the regime suggested in subsection (3), which states the arrangements simply. We do not have a criminal justice system that sets maximum penalties and then allows Ministers to decide whether the circumstances of a case permit the penalties to be waived. That would interfere in the judicial process, although it seems that a similar mechanism is countenanced in subsection (1).

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

The hon. Gentleman is making a persuasive argument. Once again, it is about clarity. We should not underestimate the nature or importance of the message that comes from our debates: we are making tough demands, so we need to be absolutely

clear about their repercussions. As with derogations, clarity is critical. The hon. Gentleman makes a good point, which is bigger than we first anticipated. It is about the signals that the Committee gives the authorities.

Photo of Norman Baker Norman Baker Liberal Democrat, Lewes

I am grateful for that intervention, which reinforces what I said. It further reinforces a point that I made on Second Reading, when I painted a scenario in which, notwithstanding the derogations that may come into force, the targets may be missed by some or all waste disposal authorities. Given the step-change that has to be made, that is not inconceivable.

The authorities would then argue for the penalties to be waived or put off, saying to the Minister, ''If you enforce the penalties under clause 26(3), you will take away money for recycling and further reduce our ability to meet the targets. We are in a downward spiral, and you will make it worse. You will deprive us of the means to do what you want. You must let us off the penalties.'' I can imagine such conversations taking place in three or four years and the authorities queuing up at the Minister's door.

Subsection (1)(c) is an admission by the Government that many waste disposal authorities may not meet their targets, that penalties will be incurred and that they may have to be waived. Why else include a provision that could allow the Minister to override subsection (3)? Why else override the rules for calculating the penalty? Why else override the provisions on when penalties are due? Why are those provisions all being negated?

The answer is that the Minister wants an escape clause should the whole thing go pear-shaped, but that is not the right message to send to waste disposal authorities. They know that targets have been set but that, if they are not met, the penalties can be watered down. That is not what we should be saying to the authorities. They must be under no illusion: all penalties incurred under the rules must be met. The amendment, which my hon. Friend the Member for Guildford and I have tabled, sets a maximum leeway of 12 months, which is pretty generous. I cannot foresee any circumstances in which there would have to be any extension beyond 12 months. I hope that the Minister takes that point on board.

The Minister is sending out the wrong message with subsection (1)(c), which is that the targets and the thrust of the Bill can be fatally undermined. If he concludes that waste disposals authorities do not have the powers, funds, wherewithal or whatever else to meet the targets, the answer to the conundrum is to set up a special fund or to provide extra funding by local authority-Office of the Deputy Prime Minister channelling. The way to help waste disposal authorities that do not meet their targets cannot be to let them off their penalties, which would be fatal.

Photo of Michael Meacher Michael Meacher Minister (Department for Environment, Food and Rural Affairs) (Environment) 11:00 am, 29th April 2003

The hon. Gentleman makes a strong case, and I have considerable sympathy with him. However, I say at the outset that there is no question of letting waste disposal authorities off the hook. The wording in subsection (1)(c) is qualified by the premise that ''the allocating authority may'', which does not

suggest that the authority will do what is described or that if large numbers of authorities queue up at the office, they will all be let off. The question is whether there should be flexibility.

The amendment would limit the power of the allocating authority to extend time in which to pay the whole or part of a penalty under chapter 1, as well as any interest on it. As the hon. Gentleman said, the amendment would prevent the time for payment from being extended by more than one year. Given the force of his argument, I am surprised that he tabled an amendment to paragraph (c)(i), as opposed to paragraph (c)(ii), for which he seemed to be arguing.

The amendment would reduce the flexibility available to the Secretary of State and to other allocating authorities in the case of a waste disposal authority landfilling more than its allocation or breaching other requirements of the landfill allowances scheme.

Photo of Ms Sue Doughty Ms Sue Doughty Liberal Democrat, Guildford

We have one additional consideration. If for whatever reason the Minister suggests that he is not encouraging people to beat a path to his door, we shall continue to have a political situation, which I think the public have by now rumbled, whereby Governments are often more friendly to local authorities that are of the same political persuasion as themselves. There could again be opportunities for people to say, ''Well, we won't go so heavy,'' ''They had an excuse,'' or ''We won't fund this local authority, but we will fund that.'' We have been talking about the amount of money that is given to local authorities to support the change from landfill to other technologies, or about the lack of funding or budgetary constraints, which is a political decision. The amount of money that local authorities have—

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

Order. This is becoming a speech rather than an intervention.

Photo of Ms Sue Doughty Ms Sue Doughty Liberal Democrat, Guildford

I think that the Minister will get the gist of my concerns about political bias, which the amendment would prevent.

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

I understand the hon. Lady's point that a Secretary of State or allocating authority could respond more positively to a waste disposal authority of the same political complexion. However, the amendment allows for discretion in payment to be given up to a year, so judgment could still be exercised in a discriminatory way, although I take the general point.

I absolutely agree that if there are to be financial penalties—and there are—they need to be a strong deterrent. That is their purpose, and we should not send out the signal that the penalties are voluntary or discretionary and that with a nod and a wink payment can be deferred almost indefinitely. We do not want to generate that situation.

The Secretary of State might extend the time available for a penalty to be paid if, for example, the ability to pay over several years would enable a waste disposal authority to continue investment in alternatives to landfill. The hon. Member for Lewes, in moving the amendment, anticipated that by saying that all sorts of excuses about good and worthy

purposes would be used in order to benefit from that discretion. I have some sympathy with his point, and I am prepared to look at the matter again. I am not prepared to say that we should limit the discretion to a period of one year, nor would I want to give the impression that the financial penalty could be easily manipulated, particularly by a sympathetic Secretary of State; that is not the intention of the Bill. I am prepared, without prejudice, to reconsider the matter.

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

I am grateful to the Minister. He probably gathered from my intervention that I am sympathetic to the case made by the hon. Member for Lewes. We should consider both the signal that we send to local authorities at the outset and the inconsistencies that might arise if the Secretary of State had to deal with competing claims. That would undermine people's confidence in the legislation, because they would inevitably feel that they had to compete for special treatment.

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

I understand that point as well. We are discussing subsection (1)(c), which allows for the penalty to be relieved. It might be used on occasions on which there were specific reasons for a penalty not to be imposed. For example, if there had been a fire in a recycling facility, it would be right for the time for repayment to be flexible. However, a good point has been made and I would like to think about it. Penalties are automatic: as soon as a waste disposal authority exceeds the allowances in a year, it is automatically liable to penalty. We are discussing the speed at which it should be allowed to pay. Unfortunately, the reasons why a breach of the landfill allowance scheme has occurred are heterogeneous—external natural disasters might have affected the situation—so we need to provide reasonable flexibility without sending out the wrong message. There should not be a restriction of one year, and I shall reconsider whether there should be a limit. I hope that, on that basis, the hon. Gentleman will be satisfied.

Photo of Norman Baker Norman Baker Liberal Democrat, Lewes

I am not sure that I am satisfied, but I listened carefully to the Minister and am grateful for his positive recognition that there is a genuine problem. If it is to be good, legislation has to be both clear and fair. The arrangements in clause 26 are not clear; they are unfair and potentially partisan. That cannot be the Government's intention, but the Minister recognises that it could happen. I shall not press the amendment to a Division because he said that he would reconsider the point. I believe him, and I hope that he will table an amendment on Report. If the legislation is left unamended, it will present more problems than it solves—by a long way. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Gregory Barker Gregory Barker Conservative, Bexhill and Battle

I beg to move amendment No. 96, in

clause 26, page 17, line 25, at end insert,

'A Waste collection authority in England which is not also a waste disposal authority may direct that the waste disposal authority to whom it delivers its waste shall not dispose of that waste by incineration. Failure on behalf of the waste disposal authority to comply will result in a penalty as set down in Clause 9'.

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

With this it will be convenient to discuss new clause 45—Directions to waste disposal authorities—

'(1) A waste collection authority in England which is not also a waste disposal authority may direct that the waste disposal authority to whom it delivers its waste shall not dispose of that waste by incineration.

(2) Any waste disposal authority which receives such a direction shall take such steps as are necessary to ensure it is complied with within 12 months of the issuing of the direction.

(3) A waste collection authority issuing a direction under subsection (1) above shall pay to a waste disposal authority such amounts as are needed to ensure that the disposal authority is not financially worse off as a result of having to comply with the direction.'.

Photo of Gregory Barker Gregory Barker Conservative, Bexhill and Battle

The amendment and the new clause are similar. The new clause puts a little more flesh on the bones suggested in the amendment. The amendment would give waste collection authorities the power to block the incineration of waste by waste disposal authorities, by introducing some accountability.

In essence, contradictions, complexities and conflict frequently arise if two authorities in the same area have differing views on the best way to dispose of waste. I am familiar with the problem, as is the hon. Member for Lewes, because it confronts us daily in East Sussex. It has to be said that there is nothing like the threat of a local incinerator to enthuse a local community into taking action to promote reuse and minimisation, and especially recycling.

When I address village meetings in my area dealing specifically with the threat of an incinerator, the argument is always about what should be done to minimise waste and to promote recycling. It is not enough to shift or displace the burden by disposing of the waste elsewhere. It is my experience that, by and large, once people become engaged in the waste argument, they want to be responsible and take a holistic approach, to be more ambitious and not take a narrow, not-in-my-back-yard attitude.

It is therefore particularly galling, if one is engaged in the waste process and if the district council is responding actively to the concerns of its residents by promoting recycling and waste minimisation, to find that it makes no difference because the waste disposal authority will be ploughing ahead, often with long-term contracts, to burn the waste in an incinerator. Because of the nature of long-term contracts, the best efforts of local residents and their elected representatives are often in vain.

In my area, Wealden district council follows best practice in recycling; and my own council, Rother district council, is not bad but has ambitions to do a lot better. Our problem is that a great deal of the waste generated in the city of Brighton and Hove is being directed for disposal out of the urban area and into rural areas, especially to my constituency and that of the hon. Member for Lewes. That is a particular cause for concern, because the operator may need to take waste from other areas to make the incinerators viable in the long term. That would be another disincentive to better waste management.

It is extremely important that mechanisms are available to allow local communities' democratically accountable representatives to have a say in disposal. The Minister may say that the county council is equally democratically accountable, but it is accountable over a much wider area. Disposal and collection are carried out by different civic authorities and are treated differently. We must therefore regulate the relationship between those authorities far more efficiently than we have done to date. The amendment and the new clause try to address such complexities and to enable communities to stand up and say, ''We will not allow our waste to be incinerated.''

The new clause would inject some realism in that respect. It would not be enough for collection authorities to wash their hands of waste while denying the county council—the disposal authority—the full means of dealing with it. By and large, county councils do not want to incinerate if there are other options. Some councils may be neutral about those, while others may be slightly more enthusiastic, but by and large there is no great enthusiasm for incineration, certainly among my Conservative colleagues in local government. None the less, councils have been led to decide that incineration is the best option for them. Under new clause 45, where there is a financial incentive to incinerate, the waste collection authority must reimburse the disposal authority for the costs of not incinerating, or at least take a share of the financial burden. That must be fair.

I would like the Minister carefully to examine the new clause and the amendment. I want him to accept that there are inherent problems in the dynamics between collection and disposal authorities, which existing legislation does not address. I also want him to accept that, sadly, we do not have the all-embracing, holistic waste Bill for which many Opposition Members had hoped. Such a Bill could have taken an ambitious, all-embracing approach and been a standard bearer for a 21st-century waste policy. In the absence of such a Bill, and with no prospect of a Bill to address all the contradictions and complexities, I ask him to consider incorporating the amendment and the new clause in this Bill.

We must all address these problems, which cannot be put off. Big contracts, with a life of 20 years, are being signed throughout the country almost every week. We must send the clear signal to those who want to recycle rather than to incinerate that we shall empower them to take control of the process and that we shall give them the tools to do the job.

Photo of Norman Baker Norman Baker Liberal Democrat, Lewes 11:15 am, 29th April 2003

It is a pleasure to follow the hon. Gentleman. He speaks about my part of the world, so his comments are of particular interest to me. He has also tabled an amendment that touches on important matters and makes a lot of sense. I hope that the Minister will give it due consideration.

We are considering the relationship between waste collection and waste disposal authorities. It is terribly important in terms of making the Bill work and in

terms of the waste stream in general, although the Minister keeps telling us that the Bill's function is not to examine the waste stream. Irrespective of which party is in power, waste collection authorities tend to be greener, more creative and more responsive to the environmental challenge than waste disposal authorities, probably because disposal authorities, by their nature, are told to dispose of waste, while collection authorities see the material collected at source and are better placed to assess what is collected, where it can go, what the problems are on the ground—be that in the streets or, in the case of fly-tipping, in the countryside. They are also better placed to come up with creative solutions. It is absolutely right that their role in the waste stream should not be diminished, or indeed extinguished, in policy terms, by disposal authorities or the Bill.

By and large, waste disposal authorities are against incineration. Again, that is true irrespective of which party is in power. That appears to be the case throughout East Sussex, and it might be the case more widely. It is a bit rough on collection authorities that have developed environmentally friendly methods of waste collection and contributed to recycling or composting schemes to be told by the waste disposal authority that the waste produced will then be taken to an incinerator to be burned and, if we are lucky, converted into energy. The Bill gives those powers to the waste disposal authorities.

There is a potential in the Bill to undermine the creativity and environmental credentials of waste collection authorities. That it is not what the Government want to achieve, and I am not accusing them of trying to do that. Waste collection authorities may simply gather up what is collected and waste disposal authorities may then have a greater say than they have hitherto had. That would be unfortunate.

Any measure that aims to restore that balance and give waste collection authorities the power to behave in an environmentally sustainable way and not have that green light extinguished by the waste disposal authorities is something that we must encourage.

Encouraging waste collection authorities empowers local people in a way that giving power to waste disposal authorities does not. Of course the waste disposal authorities are elected, but over a wider area, as the hon. Member for Bexhill and Battle has said. The challenge of minimising waste is best dealt with not over a huge area by waste disposal authorities but by individuals in streets, in local communities, finding solutions to their own waste streams in their own locales. I could recount at length some of the unique and innovative ways in which waste has been dealt with in my constituency by groups of individuals, the voluntary sector, district councils and waste collection authorities. Lewes is now rolling out doorstep recycling. I am concerned that innovation is not recognised more widely and could be compromised by the powers given to waste disposal authorities in the Bill.

Then there is the proximity principle, which the Minister continually recognises. The principle is that waste should be dealt with as close as possible to the point of its production, first because it minimises

transport movements and environmental consequences, but also because it brings home to individuals and communities the consequences of their behaviour, which creates the waste in the first place. The move to allow transportation of waste over some distance to be incinerated undermines the proximity principle and the connection of individuals with the waste that they create.

We see a similar undermining elsewhere. People used to know about animals and knew when they bought meat where it came from on the animal. Now, too many people are buying meat on a plastic tray, wrapped in cellophane from a supermarket, and have no idea even what animal it comes from. The link has been broken, and we are in danger of making a similar mistake with the waste stream if we are not careful.

We cannot allow the situation in which waste disposal authorities are, frankly, not very good or very creative, when waste collection authorities are. Nor can we have a situation in which waste collection authorities are undermined by heavy-handed waste disposal authorities. In East Sussex, we have a number of waste collection authorities that are quite innovative. Wealden is Conservative-controlled, but I am happy to say that it is innovative on recycling, as is my authority in Lewes. I am sorry to say that the

county council, which is Conservative-controlled, is not innovative as a waste disposal authority. That is not a party point, because I have respect for the lead member of the council, Tony Reid. However, institutionally, the transport and environment department of the county council is weak. It suffers from weak leadership, and that is part of the problem. We are now going to entrust a waste stream in East Sussex to a weak department, where hitherto responsibility was spread out across East Sussex and across waste collection authorities in a way that at least meant that there were compensatory factors that made up for that weak waste disposal authority.

The concepts that are set out in the amendment and the new clause have considerable merit. They have merit in redressing the balance between waste collection authorities and waste disposal authorities, and in preventing a headlong rush to incineration, which many of us fear. I hope that the Minister will look at those matters sympathetically.

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.