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Lord Greaves: My Lords, as I understand it, the amendment seeks to hypothecate all the revenue from landfill tax over £15 a tonne to the specific purposes set out in the amendment. This is an entirely new principle as regards landfill tax. At present, 20 per cent of landfill tax goes to worthy schemes; to recycling, and so on. The noble Lord, Lord Dixon-Smith, wants to take the whole of the increase in landfill tax—the landfill tax escalator—and apply it to specific purposes in relation to the Bill and specifically in relation to municipal biodegradable waste.

This interesting idea is worthy of considerable debate. Third Reading is not technically the best time to hold such a debate. It would have been interesting to explore in Committee the exact intention behind the amendment, and why these specific purposes and not others are set down. We cannot do that at this stage. Therefore, we must take the amendment or leave it.

Over and above capital projects in relation to treating biodegradable waste, the money would be applied to,

I am not sure how such a local community would be defined. The question arises: why that local community, and not local communities which have landfill sites, which in many cases are likely to present more difficulty in terms of the effect on the community? The terms of the amendment are very specific. It is difficult to see exactly why it is drafted as it is.

In addition, the amendment seeks to impose conditions relating to capital projects designed to treat biodegradable municipal waste, stating that they have to be,

    "sited within the boundaries of the location controlled by each waste disposal authority".

I am not sure what that means; I suspect that it is a misprint for "locality". The amendment also lays down the specific condition that the capital projects funded by this money should only be within,

    "the relevant waste disposal authority".

This may be a county view. It may have arisen in counties with lots of land which get upset when much smaller unitary authorities want to locate waste disposal facilities of various kinds in those areas. I suspect that that is how this situation has arisen. It seems to me totally impractical. It seems that joint schemes might be prevented from happening by the precise wording of the amendment. Viewed from Lancashire, which might in future be broken up into unitary authorities, the county will not start locating individual facilities such as this within each of the

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likely unitary authorities; it will have a certain number of facilities in strategic positions in the county. The unitary authorities they appear in will be arbitrary.

For those reasons, and because we do not have an opportunity to probe the amendment properly and discover its meaning, I shall not be able to advise my colleagues to support it.

1.15 p.m.

Baroness Byford: My Lords, I have added my name to the amendment. I am disappointed that we did not raise the subject earlier. That said, and accepting the comments of the noble Lord, Lord Livsey, that the wording is not perfect, I hope that the Minister will give us some indication that the Government will consider the proposal.

We know very well that the Government do not like hypothecation—all governments are fearful of it. The amendment is designed so that the money that will go to good causes is not taken away. It is certainly not my intention that it should be taken away. The new money raised will be used for the benefit of the community in finding out different ways in which the amount of waste going to landfill can be reduced.

Having accepted that the amendment is slightly wordy and not perfect, if the Minister will give an indication that between now and the Bill's appearance in another place the Government will give the matter additional thought rather than simply turning the amendment down flat, I for one shall be happier.

Lord Stoddart of Swindon: My Lords, as pointed out by the noble Lord, Lord Greaves, there are defects in the amendment. However, the proposal could be debated as the Bill moves through its stages in another place.

I am not at all sure that I am against hypothecation. It seems to me that it may be a very good discipline for Chancellors of the Exchequer and that money raised from the taxpayer on the pretext of doing one thing should not be used to do something else.

In past weeks we have had an example of hypothecation which everyone seems to think is working very well. I refer to the London congestion charge. The fines from the charge, as I understand it, are to go towards improving public transport. Who in this Chamber is opposed to that? Hands up, please, those noble Lords who are opposed to the idea of the fines going towards better transport in London. The idea of hypothecation is possibly gaining a great deal of support. We should not, therefore, reject the amendment on that basis. If it is put to the vote, just to establish that principle, I shall vote for it. Then we shall see what happens. At least it will make the Government think.

Lord Whitty: My Lords, the Government have thought about this proposal and I understand what is behind it. I shall not engage in any knee-jerk ideological defence of the position against hypothecation. Increasing landfill tax beyond its current escalator will be necessary in order to deliver

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sustainable waste management and it is intended to provide businesses and local authorities with the incentive to use and develop alternatives to landfill. So the issue of recycling this revenue immediately arises.

However, it is not normal for legislation—and not conventional for House of Lords legislation in particular—to pre-empt what might be normal Budget business. We announced in the Pre-Budget Report that revenue from businesses which results from increases in the landfill escalator will be recycled back to businesses. We also said that the increases will be revenue neutral as a whole—in other words, the increase in revenue from the local authorities will also be recycled back to local authorities.

The revenue will, therefore, not be lost to local authorities; it will go back into the system to bring further benefits to local government. That is admittedly in general terms, and does not have the prescriptive nature of this amendment. But, as the noble Lord, Lord Greaves, indicated, the restrictions and ambiguities of the prescriptions are in any case not helpful to the noble Lord's cause.

We are discussing ministerially the mechanism for recycling the revenue from municipal waste under a group chaired by a Treasury Minister. I am not, of course, in a position to anticipate the forthcoming Budget or any subsequent Budget, but I have no doubt that there will be announcements by the Chancellor of the Exchequer in due course.

In the meantime, it is not an appropriate use of this legislation to pre-empt such decisions. Therefore, while displaying as a great sympathy as I am in a position to do with the objectives of the amendment, I must resist it.

Lord Dixon-Smith: My Lords, I am grateful to the Minister for his sympathy, if nothing else. The noble Lord, Lord Greaves, is also sympathetic but says that the wording might be too restrictive in the way these funds could be used. I accept some of his criticism, but some of the restrictions were thought through. For instance, most existing landfill sites already have fairly heavy conditions imposed on them to make them more environmentally attractive. Not the least of the big problems in dealing with waste is overcoming local nimbyism. That was why we felt we should put these funds towards the benefit of communities where new facilities are provided.

One would hope that part of the result of these developments over the next 18 years would be that we did not need to open any more landfill sites. Were that to happen, it would be extremely beneficial.

I am grateful to the noble Lord, Lord Stoddart of Swindon, for his support, particularly on hypothecation. He used the London congestion charge as an argument in favour of it, but that is not necessarily proven yet. We do not know how the congestion charge will work in the long term and until we do, I would not want to take it as an example of anything, although it certainly seems to have had a remarkable effect.

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My noble friend Lady Byford asked the Government to consider the ideas behind the amendment, even if they do not accept it. I am grateful for that thought because the Minister gave some hint in his response that the Government are doing that. In the circumstances, therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 26 [Penalties under Chapter 1: general]:

[Amendment No. 21 not moved.]

Lord Whitty moved Amendment No. 22:

    Before Clause 31, insert the following new clause—

(1) Part 2 of the Environmental Protection Act 1990 (c. 43) (waste on land) is amended as follows.
(2) In section 48 (duties of waste collection authorities as respects collected waste), after subsection (1) (collection authority to deliver collected waste to places directed by disposal authority) there is inserted—
11 (1A) A waste collection authority in England which is not also a waste disposal authority must discharge its duty under subsection (1) above in accordance with any directions about separation of waste given by the waste disposal authority for its area."
(3) In section 51 (functions of waste disposal authorities), after subsection (4) there is inserted—
"(4A) A waste disposal authority in England which is not also a waste collection authority may in directions under subsection (4)(a) above include requirements about separation that relate to waste as delivered, but may do so only if it considers it necessary for assisting it to comply with any obligation imposed on it by or under any enactment.""

The noble Lord said: My Lords, I shall also speak to the other amendments in my name in this group. We have discussed the need for a good relationship between the waste disposal authorities and the waste collection authorities in areas with two-tier authorities. We all accept that there is a need for that to be clearer.

The amendment would give a power to allow counties to direct districts as to the form in which waste should be delivered. That is in line with the Waste Strategy 2000. The amendment would amend Sections 48 and 51 of the Environmental Protection Act 1990 to allow for that direction, which is already there for a parallel purpose. The amendment would extend a county's existing powers to give directions to a district by providing that such directions may include requirements about the separation of waste as delivered to the county.

The amendment to Section 48 will place the district under a duty to comply with any directions about the separation of waste. The amendment provides that a county can use that power only if it considers it necessary for assisting it to comply with any obligation imposed on it by or under any enactment. That will include enactments under this Bill, other Bills and the Local Government Act 1999.

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The new clause would come into force on a day appointed by the Secretary of State. We therefore need to consider how the timing would fit in with some of the other measures designed to improve co-operation between the county and district in two-tier areas. We see partnership between the two levels as very important in delivering this. The ability to give a direction helps in areas where relations between the two tiers are not always as amicable as we would like and where a joint approach is desirable.

It may be helpful to the House if I mention the amendment in the name of the noble Lord, Lord Dixon-Smith, which deals with passing on penalties. I understand why it has been tabled, but we did not find penalties being passed between counties and districts an attractive prospect. We want to ensure that there is partnership; the question of direction clearly gives some authority to the county but arguing about sanctions and money is unlikely to develop the constructive partnership that we wish to see. We therefore want to leave it clear that the county—the waste disposal authority—is responsible for meeting targets. We do not want to confuse the issue by introducing the ability to pass on any sanction or penalty to another authority.

Of course, the allocating authority has the discretion not to impose part of the penalty that would otherwise arise if it concludes that the county has failed to meet its target because of the district. That is perhaps better than arguing who should pay the fine. There is a mixture of incentives and powers already in the Bill if we accept these government amendments. Whatever the view taken on the amendment on which the Government were just defeated, there is a general desire on all sides for disposal and collection authorities to work together. That would not be enhanced by introducing the shifting of the penalty. However, we accept the logic behind the amendments in my name. I beg to move.

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