HC Deb 14 July 1999 vol 335 cc419-25

'.—(1) Where

  1. (a) a disposal licence under section 5 of the 1974 Act became a site licence by virtue of section 77(2) of the 1990 Act (conversion, on the appointed day, of existing disposal licence under section 5 of the 1974 Act into a site licence),
  2. (b) the licence has expired at a time ("the time of expiry") falling before the day on which this Act is passed but not earlier than the appointed day,
  3. (c) the licence authorised the carrying on of activities in or on land in England or Wales, and
  4. (d) relevant activities have taken place at a time falling not more than one year before the day on which this Act is passed,
the licence shall (subject to subsection (7)) for all purposes be deemed not to have expired but to have become, at the time of expiry, a site licence continuing in force in accordance with section 35(11) of the 1990 Act. (2) Subsection (3) applies where
  1. (a) a disposal licence under section 5 of the 1974 Act expired at a time ("the time of expiry") falling before the appointed day (so that it was not converted into a site licence by section 77(2) of the 1990 Act),
  2. (b) the licence authorised the carrying on of activities in or on land in England or Wales, and
  3. (c) relevant activities have taken place at a time falling not more than one year before the day on which this Act is passed.
 (3) The licence shall (subject to subsection (7)) for all purposes be deemed—
  1. not to have expired, and
  2. to have been subsisting on the appointed day and (accordingly) to have become on that day a site licence by virtue of section 77(2) of the 1990 Act,
and the site licence which the licence is deemed to have become on that day shall for all purposes be deemed to have been one that continues in force in accordance with section 35(11) of the 1990 Act. (4) Where—
  1. (a) a site licence in force immediately before the day on which this Act is passed—
    1. (i) became a site licence by virtue of section 77(2) of the 1990 Act, and
    2. (ii) will expire on or after the day on which this Act is passed (if it has not previously been revoked entirely, or had its surrender accepted, under Part II of the 1990 Act), and
  2. (b) relevant activities have taken place at a time falling not more than one year before that day,
the licence shall for all purposes be deemed to have become at the beginning of that day a site licence continuing in force in accordance with section 35(11) of the 1990 Act. (5) Where subsection (1), (3) or (4) has effect in relation to a licence, the terms and conditions of the licence as continued in force by that subsection shall, except so far as providing for the expiry of the licence and subject to subsection (6)(b) and (c), be such as were in force immediately before the relevant time (unless and until varied under Part II of the 1990 Act); and "the relevant time" means—
  1. (a) where subsection (1) or (3) has effect in relation to a licence, the time of expiry;
  2. (b) where subsection (4) has effect in relation to a lcence, the beginning of the day on which this Act is passed.
 (6) Where subsection (1) or (3) has effect in relation to a license (but without prejudice to the generality of that subsection)
  1. (a) activities carried out during the interim period which (by virtue of subsection (1) or (3)) become authorised by the licence shall be treated as authorised at the time they were carried out (even though at that time their being carried out amounted to a contravention of section 33(1)(a) or (b) of the 1990 Act or section 3(1) of the 1974 Act);
  2. (b) anything done in relation to the licence before the time of expiry but purporting to take effect after that time (such as the serving of a notice under section 37(4) or 38(12) of the 1990 Act, or in pursuance of section 7 of the 1974 Act, specifying a time falling during or after the interim period) shall be treated as having had (or having) effect as if the licence had not in fact expired;
  3. (c) anything which during the interim period purported to be done in relation to the licence (such as a modification of the licence or the revocation, suspension, transfer or acceptance of the surrender of the licence or the carrying out of consultation, exercise of functions under section 9 of the 1974 Act or section 42 of the 1990 Act, imposition of requirements during a suspension or bringing or determination of an appeal) shall be treated as having had effect as if the licence had then been in force;
  4. (d) any fees which (by virtue of subsection (1) or (3)) are treated as having become payable before the passing of this Act shall be taken to have become payable at the time they would have become payable had the licence not in fact expired; and
  5. (e) the holder of the licence shall be treated as having been, during the interim period, an authorised person for the purposes of section 34(1)(c) of the 1990 Act.
 (7) Where subsection (1) or (3) has effect in relation to a licence, a person shall not be guilty of an offence under section 33(6) or 38(10) or (11) of the 1990 Act as a result of anything done or omitted to be done during the interim period becoming (by virtue of subsection (1) or (3)) a contravention of any condition of the licence or (as the case may be) a failure to comply with any requirement imposed under section 38(9) of the 1990 Act. (8) Nothing in this section affects any criminal proceedings which have been concluded before the passing of this Act. (9) The waste regulation authority (within the meaning given by section 30(1) of the 1990 Act) shall notify the holder of a licence affected by this section of the fact that the licence is so affected and of how it is so affected. (10) For the purposes of this section "relevant activities", in relation to a licence, are—
  1. (a) any activities authorised by the licence or, in the case of an expired licence, any which would have been authorised by it had it not expired, and
  2. any precautions or works required by the licence to be taken or carried out in connection with or in consequence of those activities or, in the case of an expired licence, any which would have been so required had the licence not expired.
 (11) In this section— the 1974 Act" means the Control of Pollution Act 1974; the 1990 Act" means the Environmental Protection Act 1990; the appointed day", in relation to a licence, means the day which in relation to that licence is (or would have been if the licence had not previously expired) the relevant appointed day for licences (within the meaning of section 77 of the 1990 Act); the interim period", in connection with a licence in relation to which subsection (1) or (3) has effect, means the period beginning with the time of expiry and ending immediately before the day on which this Act is passed; site licence" has the same meaning as it has in Part II of the 1990 Act by virtue of section 35(12) of that Act.'.—[Mr. Meale.]

Brought up, and read the First time.

4.19 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Alan Meale)

I beg to move, That the clause be read a Second time.

Madam Speaker

With this we may discuss Government amendments Nos. 3 to 5.

Mr. Meale

First, I want to explain that one of the deficiencies of the waste licensing scheme originally introduced under the Control of Pollution Act 1974 was that those who held licences for waste operations, such as landfill sites, could simply hand in their licences and walk away from their responsibilities. In line with the polluter pays principle, that was rectified in the revised licensing scheme introduced under part II of the Environmental Protection Act 1990.

As the House is aware, the 1990 Act provides that a site licence remains in force until a surrender application is made to the environment agencies. What is more, it precludes the agencies from accepting surrender applications unless they are satisfied that environmental pollution or harm to human health is unlikely to occur. The issue that the new clause and the amendments address, therefore, is time-limited licences that were originally granted under the 1974 Act.

The transitional provision in section 77(2) of the 1990 Act contains two statements on those time-limited licences. One is that they are to be treated as 1990 Act licences until they expire. The other is that they may be surrendered only in accordance with the 1990 Act. We are removing that. It is obviously anomalous to require a licence holder to apply to the environment agencies to surrender his or her licence while the time limit remains in force, but to allow him or her to walk away from his or her responsibilities when the time limit expires.

By way of a further example showing the need for these changes, I can inform the House that a review carried out by the Environment Agency has revealed that many licences originally granted under the 1974 Act, and inherited from the former waste regulation authorities in April 1996, are subject to time limits and that, in some cases, the licences have expired without either the agency or the operator being aware of it. In some cases where the licence has expired, the sites are continuing to be operated, and of course to be supervised by the agency, as though they had valid licences. As the House is aware, it is a criminal offence to operate those sites without a licence. Therefore, the current situation is clearly unacceptable.

The amendments therefore have two main purposes. The first is to validate what has happened since the expiry of those licences that have already expired. The second is to ensure that all licences—those that have expired and those that are subject to time limits that will expire in future—are subject to the surrender provisions of the 1990 Act. In simple terms, that means removing the time limits in licences that have not yet expired.

As I said, the main considerations are the application of the polluter pays principle and the need to ensure that the environment and human health are properly protected. Those objectives could not be achieved if, on the basis of time limits originally set under the 1974 Act, the operators of landfill sites and toxic waste treatment plants could now walk away from their responsibilities. In the Government's view, the balance falls in favour of removing those time limits and ensuring that the environment and human health are properly protected.

Mr. Damian Green (Ashford)

It is unusual for such a substantial new clause to be introduced at this late stage of a Bill's passage, so I am grateful to the Minister for kindly explaining privately, in advance of the debate, the purpose of both it and the amendments. However, I have several questions about the need for the new clause and the regulations to which it gives rise. I should be grateful if he would address those when he winds up the debate.

As the Minister explained, the new clause was tabled because it had been discovered that the Environment Agency and many operators of sites did not know that they were operating illegally and had been doing so for some years. I should be grateful if the hon. Gentleman would tell the House when that fact came to light. Why did it take the Environment Agency so long to discover that illegal operation?

What procedures does the agency have to check the validity of licences? Clearly, the House will want to know that this problem will not happen again. Can we be reassured that every existing licence will be covered, and that the operator and the agency have a clear idea of the timetable under which the licence will be operational? Have they set in train some kind of warning system to enable site operators to know when their licences may be about to run out?

Does the Environment Agency have the resources to implement the new system that the new clause and the consequential amendments will produce? Clearly, there has been a failure in the system, but it is more important today for the House to consider how we avoid a similar failure in the future. One of the things that will have to happen if the Environment Agency is not to go down the same route again is to ensure that it has adequate resources to cope.

Mr. James Gray (North Wiltshire)

Is my hon. Friend concerned that, under the new regime, the number of sites to be licensed will increase from 2,000 to 6,000, and that many of the 4,000 new sites will be small businesses, farmers and others who may not be all that sophisticated in administrative terms? Is he concerned that they might also fall through the net?

Mr. Green

My hon. Friend makes a good point. The agency must be up to the mark in its existing activity in this area—which it has not been up to now. It will have an extra load put upon it by the extra number of sites that will be included. As my hon. Friend rightly says, many of those will be small businesses or farmers who may not be particularly sophisticated in dealing with paperwork. It is all the more important that the Environment Agency knows that it has the system and the resources to cope with the new burden that we will put on it.

Of the 202 licences which have expired, are there any instances where the site operator has, not unreasonably, walked away and shut up shop? He may have thought that the licence had expired and, therefore, that nothing else could happen legally. Are there instances of anyone walking away, leaving a hole to be filled?

The Minister has said that one of the reasons for the new clause and the amendments is to validate past activities. I am not clear from the clause, or from the Minister's helpful letter, whether they also validate the past inactivity of people who may not have fulfilled all their obligations in closing down a site—quite inadvertently. Will those people be liable for prosecution?

My underlying point is the extreme delicacy of introducing retrospective legislation. Clearly, this clause is well intentioned and I accept the Minister's good faith. But however we wrap it up, it is retrospective legislation, and we should tread extremely warily when we go down that route. Will anyone be liable to any fees, penalties or other obligations under the new clause which they would not be subject to were the clause and amendments not to pass? If so, the House should pause at that point.

As a matter of principle, we should be reluctant to endorse retrospective legislation which imposes any new obligations, particularly if, as my hon. Friend the Member for North Wiltshire (Mr. Gray) has pointed out, some of the recipients are small businesses. It is clear from what the Minister said that anyone who has got caught up in this is likely to have been so inadvertently and cannot be blamed.

The new clause makes it clear that it will not affect any criminal proceedings that have been concluded before the Act comes into force. Are there any on-going proceedings that would be affected? Have there been prosecutions for non-compliance with a licence that the Environment Agency and the person operating it wrongly thought to be in force? Has the Minister considered the legal complications involved if someone had apparently not complied with the terms of a licence that had in fact already expired? The Environment Agency would be vulnerable to judicial review.

4.30 pm

Perhaps most importantly, what changes will be made in the Environment Agency to ensure that such a mistake does not happen again? It is clearly embarrassing for all involved that the loophole has emerged. It is serendipitous that the House is proceeding with a Bill that allows that loophole to be closed relatively easily. The Bill and the new clause give extra powers to regulators such as the Environment Agency, and I am sure that the House will want to know that the agency's processes have been improved to ensure that no more loopholes appear.

Mr. Tom Brake (Carshalton and Wallington)

I, too, thank the Minister for writing to me in advance explaining the reasons for the new clause. It is obvious that the loophole must be closed, so my party will support the new clause. Waste operators must not be allowed to walk away from their responsibilities because of a drafting error.

I am surprised that the loophole was missed. It may be an unfair question to ask the Minister, because he was not responsible, but why were 12 per cent. of the licences simply forgotten about? Did something happen back in 1990 to cause that? As the hon. Member for Ashford (Mr. Green) said, why has it taken so long to identify the problem?

I look forward to the Minister's response to the question about prosecution for inadvertent noncompliance. That is an interesting point. I understand from his office that there have been no cases, but I would like him to confirm that.

Mr. Meale

I am grateful to the hon. Members for Ashford (Mr. Green) and for Carshalton and Wallington (Mr. Brake) for their questions, which clearly need answers before we proceed.

For the benefit of those who do not know the full facts about the number of licences around, the latest figures are that there are 7,353 licences in England and Wales, 202 of which, as the hon. Member for Ashford rightly said, have expired but are being treated as though they were still in force, and 677 of which will expire in the future. That means that 879 licences—12 per cent. of the total, as the hon. Member for Carshalton and Wallington said—will be subject to the effects of the new clause and the amendments. There is no problem with expired licences in Scotland, but there may be some licences—estimated to be fewer than 100—with time limits that may expire in the future.

I was asked about retrospection and whether the new clause would be unfair on businesses. I repeat that it is a criminal offence to dispose of waste without a waste management licence. In cases in which a business has been disposing of waste after the expiry of its licence, the new clause will validate those activities and remove the threat of criminal liability to both the licence holder and to third parties who have transferred waste in good faith.

I was also asked why the loophole has come to light now. It did so because we now have a national body, the Environment Agency, which can identify national issues such as this. Before the establishment of the Environment Agency in April 1996, there were 83 separate waste regulation authorities in England and Wales. As soon as the issue came to light in one of its areas, the agency carried out an urgent review to establish the national scale of the problem. The chairman of the agency informed the Department of the results of that review on 19 May. We considered carefully the implications, and our conclusion was that there was a serious problem that needed to be resolved during the passage of the Bill.

The hon. Member for Ashford also asked about site operators and whether the new clause would mean that they would be able to abandon their sites and walk away from their responsibilities. On the contrary, the purpose of the new clause is to apply the polluter pays principle and, by doing so, to ensure that all licences are subject to provisions under the Environmental Protection Act 1990. Under section 39 of that Act, licence holders must apply to the Environment Agency to surrender their licences.

The agency is precluded from accepting that surrender unless it is satisfied that environmental pollution or harm to human health is unlikely to occur.

I was asked whether the problem was the Environment Agency's fault. While the Government recognise the difficulties faced by the agency in the past three years, it is a matter of concern to us that the situation arose. We have made those concerns known to the chairman of the agency and it is also our intention to require the agency to review all the affected licences within the next 12 months to ensure that they are all fully up to srcatch.

The question was raised of reimbursement of the charges that were levied. We do not agree that that will be necessary, and legal advice obtained from the Environment Agency is that a right to repayment of charges may arise if we do not enact the new clause. I repeat that even though the licences were not in place, the inspection formula was, and all the sites were being examined during the whole period.

I was also asked about prosecutions by the agency in connection with expired licences. We have no uncompleted criminal proceedings and no completed proceedings.

Mr. Harry Barnes (North-East Derbyshire)

I apologise for having missed my hon. Friend's initial speech, but I was in Committee. I understand the point that there have been no prosecutions of people for not having site licences in the past. Have there been any prosecutions for assumed violations of site licences that were not in place? Is it possible for the House, perhaps through the Library, to obtain information about the 202 sites involved?

Mr. Meale

So far, the agency's review has revealed no prosecutions on the basis of expired licences, nor any penalties levied. The new clause is retrospective and would apply in such cases.

The hon. Member for North Wiltshire (Mr. Gray) asked about the burden that the new clause would place on businesses. The necessary legislation was already in place and the agency carried out inspections thoroughly throughout the period. The amendments will ensure that those inspections are validated and that the process is continued.

Finally, I can tell the hon. Member for Ashford that the Government are confident that the Environment Agency provides a system that can deal with these matters fairly and justly and ensure that the public are protected.

Question put and agreed to.

Clause read a Second Time, and added to the Bill.

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