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Lord Dixon-Smith: I am grateful to those who supported me, particularly the noble Lord, Lord Jenkin of Roding, whose eloquence was perhaps rather more clear than my own on the matter of dates. I take the Minister's reply as expressing agreement that we need to look at how we arrive at the date and its conclusion. While he does not feel able, for reasons that I understand, to accept the amendment, he says that there must be ways of accounting for this matter that mean that we can comply both with the date and with the accounting practice of Government. If the noble Lord assures the Committee that the Government will look at how best that can be done, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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On Question, Whether Clause 3 shall stand part of the Bill?

Lord Dixon-Smith: Clause 3 is interesting to me as I am a non-mathematician. Anything that contains a formula such as this terrifies me. Having looked at it a number of times, I am still not certain that I understand it. However, if I understand the formula, which I admit is a considerable question, I believe that it produces a straight line graph. If it does, I am unsure whether we are dealing with this matter in the most sensible way. That is the reason why we decided to question this clause.

The problem with changing the practice for dealing with waste is that the process will be uneven and it will not follow a straight line graph. Authorities will be given targets to aim at. That is perfectly straightforward, but if you are changing the system of dealing with waste, you will almost certainly have to get involved with capital expenditure, which will have to be accounted for and provided. That may well also require the provision of plant and buildings, which need planning permission.

Anyone who thinks that getting planning permission for new facilities to handle waste is easy and uncontroversial had better think again quickly. This is likely to prove immensely difficult. I do not know a local community anywhere in the country that will not want these jobs done somewhere else. That is very simple, very basic and very normal.

As local authorities try to overcome these difficulties initially there will appear to be a period of inertia, both because of the physical needs to provide plant, sites and finance, and because of the procedural need to overcome the dreadful business of planning permission.

I would love the Minister to reply that we can overcome that very simply, but he knows as well as I do that unfortunately that is not the case. It is likely that initially things will change very slowly in response to the scheme. Subsequently, we will see an accelerating pace of change as new systems and new plant come on stream and begin to work.

I readily acknowledge that there are some things that can be done quite easily. One can persuade people to segregate waste into metals, glass and biodegradable waste, as many authorities do. However, in some areas where that happens all three are tipped into the same collection lorry. We know what happens to it after that.

That easy avenue is not always available. There is a very real problem in that regard. I would also argue that there is a separate problem. Some authorities in this country have been considerably successful in this area and have managed to reduce the amount of biodegradable waste that is going to landfill already, some by large proportions. The Bill and the formula make no distinction between those who have already gone a long way down that road and those who have scarcely begun. If one was to allow for that—and we have had only a general discussion so far around this issue—one would want to pick the base date for

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starting to apply the formula back at 1990, before the recycling business started, so that we would be treating those who are good performers and those who are bad performers equally. I would be the first to acknowledge that is not very practical.

How does one overcome that sort of difficulty? We have two serious problems with Clause 3, which will require serious thought before we finish the Bill, although I do not expect the Minister to be too encouraging today on these issues. These problems are inherent in the way the Bill is drafted. Before this legislation is passed, solutions should be found.

The first problem is real even if we disregard the inequity of a flat start date that would put the good boys and the bad boys all back in the same class. The much deeper point arises that there will be an initial period of very slow change before the pace accelerates as new plant and new ideas and so forth come on stream. That situation will be very difficult to overcome and the formula in Clause 3 does not deal with it.

4.30 p.m.

Lord Stoddart of Swindon: The noble Lord, Lord Dixon-Smith, makes a good point. It is true that local people are suspicious, particularly if they are faced with the building of an incinerator. We have probably all been involved in one way or another in applications for incineration plants. Such applications can take a very long time to process, and with very good reason. People are scared of them because they believe that the output from them will be harmful. They also believe that their roads will be made less safe for their children because of the number of heavy lorries which might pass their doorsteps in getting to the incineration plant. The noble Lord has raised very real problems. The same applies to sorting plants. They can be very large and very noisy and, indeed, in some ways can in themselves be polluting. Again, the planning problems must be dealt with and they take time.

Another problem comes to my mind following an experience that I had when serving on a local authority. It is always necessary to be able to dispose of recycled material from a recycling plant. That matter came to mind because in Reading, where, for some time, I was a councillor and leader of the council, after the war we continued with a system to save paper introduced during the war. We collected paper separately and did so for many years.

The problem was that recycled paper was not in demand and therefore all our storage facilities became completely full of paper. We spent thousands of pounds each year collecting the paper separately but we were not able to dispose of it and had to acquire new warehouses in which to store it. Eventually, because it was costing the council the earth, I had to agree that the system should stop. I am sure that there is a warehouse in Reading containing wastepaper that has still not been disposed of.

At this stage, I must return to the issue of the money problem. Recycling plants and incinerators are expensive to build and, in the light of what I said about

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disposal, could be expensive to operate. As this is a national policy concerning waste disposal, I believe there must be a national solution, or part of a solution, to the financing problem.

I realise that this is a narrow Bill, but some of us are taking the opportunity to widen it slightly. It would be useful to hear from the Minister that he has all these problems in mind. It would also be helpful if he could give an assurance that local authorities will not be presented with a demand to do something for which there could be heavy penalties which they simply cannot meet because of lack of resources. As the noble Lord, Lord Dixon-Smith, has said, they may not be able to grant or achieve the necessary planning permissions.

Lord Whitty: This clause is a devolved clause. If the Secretary of State wished to set an alternative structure for England, reflecting some of the points raised by the noble Lord, Lord Dixon-Smith, and others, an alternative pattern for a straight line could be proposed. If the Welsh Assembly or the Scottish Executive proposed an alternative configuration of the line, provided the Secretary of State agreed, that would likewise take us between the target years and would be acceptable. That is a default position that arises only when other considerations have been taken into account but not pursued. It is felt that it is best to rely on that default position.

The default rules are based on the rate of progress which would be needed to meet the target year targets, in equal steps, as the noble Lord has said—in other words, in a straight line. I cannot believe that there could be an alternative default position that did not raise more problems, but it is open to authorities to take a different view of what the progress between target years should be.

It is equally important to recognise that all the targets will have been set well in advance. One of the main propositions in the Bill on the trading scheme provides the ability for a local authority, faced with problems of investment, timing, length of planning procedures, inability to find a market for recyclable goods and so on, to borrow or to bank, if it has exceeded the target, thereby, allowing it to smooth out the allowances that it has been allocated by trading in the market. In other words, the whole point of the trading part of the Bill is to allow authorities to smooth out those step challenges by a process of banking and borrowing.

Amendments have been tabled by various noble Lords, opposing the banking and certainly the borrowing requirements. Nevertheless the Bill is consistent in that it gives authorities flexibility to be able to smooth out their progress by operating in the market. However, the clause deals with the default rules and it would be difficult to see what other default rule one could have for measuring progress between what are fixed target years. There is flexibility for the

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Secretary of State and the other allocation authorities, and there is flexibility for the individual authority through the trading scheme.

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