Environmental Protection Bill

HL Deb 10 October 1990 vol 522 cc287-321

3.33 p.m.

Baroness Blatch

My Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report.—(Baroness Blatch.)

On Question, Motion agreed to.

Clause 29 [Preliminary]:

Lord McIntosh of Haringey moved Amendment No. 55: Page 29, line 36, at end insert: ("(e) a vehicle in or by means of which controlled waste is transported").

The noble Lord said: My Lords, let me lower the temperature immediately by saying that this is a probing amendment. It is not one on which we propose to divide the House, however unsatisfactory the reply may be from the Government Front Bench. I understand that noble Lords have to leave, but do they have to leave quite so noisily? I hope that noble Lords who remain in the House are paying attention to the Bill, if not to me. That is their privilege.

These two amendments arise from a discussion which took place at Committee stage of the Bill when answers were given by the Government to rather more wide-ranging amendments. Those answers were only partially satisfactory. The issue now before the House is whether or not there is a gap in the legislation for the transport of controlled waste. In this Bill there is provision for controls over controlled waste before it is transported by road and afterwards, but not while it is being transported.

When this was pointed out and the suggestion was made that it would be logical and sensible, in legislative terms, and helpful to those who are responsible for the control of waste if the legislation was all in one place and complete rather than coming from different places, Ministers replied to the effect that the controls contained in transport legislation were quite adequate for the purpose. They said that there was no reason whatever not to have environmental legislation first, transport legislation in the middle and environmental legislation at the end. I leave it to the House to judge whether that is a sandwich which is inside or out.

As a result of those replies we looked up the transport legislation which is supposed to cover these points. The position is still unsatisfactory. The danger with the transport legislation as it exists at the moment is that it does not cover all the material which can be transported under the name of waste; neither does it cover all types of vehicles and containers which can be used. The legislation concerned is that which covers the carriage of dangerous goods. It makes fundamental provision for the regulations concerning the construction of vehicles in which certain materials shall be transported. There are various other arrangements for proper labelling and, in certain circumstances, for notification of the transportation of particularly dangerous loads.

Dangerous goods cover a rather limited range of substances which cause particular problems if they are released or escape. As the House begins deliberation on Part II of the Bill it will know that controlled waste has a very much wider range of materials, some of which are highly toxic. For example, there are paint residues and various kinds of by-products from chemical manufacture. Some of the products, such as builders' rubble, are inert, yet they are still controlled waste. Environmental legislation provides for these inert and controlled waste substances to be controlled before and after they are transported but not while they are being transported.

That is the problem concerning the definition of controlled waste and the more limited definition under the regulations on the carriage of dangerous goods. The problem with vehicles is that the regulations only concern the containers and the vehicles, but they do not concern, for example, the carriage of builders' rubble in a skip which is neither a vehicle nor a container in the normal sense of the word. If builders' rubble conveyed in a skip is unleashed because of bad carrying practices that could result in pollution if the material is not appropriately disposed of. This Bill should cover that point.

These amendments are a good deal less wide-ranging than the amendments put forward at Committee stage. They seek to deal with that gap in the legislation, which I believe to be risky in terms of allowing certain kinds of controlled waste to be excluded from legislation. The present situation is also confusing. It is in the interests of those who are responsible for controlled waste that there should be one coherent body of legislation. Even if the Government do not agree with the terms of this amendment, I appeal to them to consider once again whether it is desirable to have the legislation covering controlled waste in such a confusing and varied form. I beg to move.

Lord Ross of Newport

My Lords, I wish to support everything that has been said by the noble Lord, Lord McIntosh. It would be preferable if the words of the amendment, or other similar words, were added to the Bill. That would cover the point made by the noble Lord.

Baroness Blatch

My Lords, Amendments Nos. 55 and 69 reflect the concern of the House that Part II should control all aspects of pollution of the environment by waste. In this case, as in others, my answer is that the matter is already covered in the Bill or elsewhere.

On Amendment No. 55, the carriage of dangerous waste is covered by Department of Transport regulations. These are designed to ensure that when any dangerous substances, including waste, are carried by road, they are only carried safely and without risk of pollution. We do not wish to cut across those regulations. The noble Lord, Lord McIntosh, was worried about some vehicles not being covered by the regulations. I am able to assure him that the carriage of dangerous goods regulations cover all sizes and all shapes of vehicles.

I appreciate that the transport regulations deal only with dangerous waste. We do not want to allow the careless transport of any waste, dangerous or otherwise. But this too is already covered. The duty of care in Clause 33 of the Bill governs all persons holding any "controlled waste"—that is, waste that is subject to Part II—except private householders in respect of their own waste. Part of that duty of care is a duty to: prevent the escape of the waste from his control or that of any other person". This duty applies to, among others, persons who carry waste. It makes it a criminal offence for a carrier to permit an escape of waste from his lorry. I do not believe that adding an escape of waste from a vehicle to the environmental pollution prohibited under Part II would add anything worthwhile to these measures.

As regards Amendment No. 69, I can assure the House that the carriage of waste by any means, whether vehicle, camel or rucksack, will be subject to the duty of care under the present wording of Clause 33(1) without the suggested drafting amendment.

This is the first of our debates today on waste, an aspect of the environment where we are determined to see radical improvements stemming from the provisions of the Bill. I wish today to make an announcement that puts the Government's seriousness beyond any doubt. During our debates in Committee, there was considerable support for the view that government should offer financial support for WAMITAB, the Waste Management Industry Training and Advisory Board, of which the noble Lord, Lord Gregson, is the active chairman. Since then, my honourable friend the Minister for the Environment and Countryside has met with WAMITAB and discussed how best this vital question of waste qualifications can be carried forward. As a result of that meeting the board and the Department of the Environment have drawn up an agreed programme for developing the waste qualifications required to meet the criteria of technical competence for "fit and proper persons" under Part II of the Bill.

Under an agreement which began on 1st October my department has commissioned the board to develop over the next 18 months a complete range of new technical and professional qualifications and associated training courses for waste managers. These qualifications will be awarded to site managers and operators with the right combination of theoretical expertise and practical experience in pollution control measures at waste sites. Provided of course that the contract delivers the goods, the Government intend to approve these qualifications as evidence of technical competence, without which no waste management licensee will be allowed to operate.

The development of compulsory technical qualifications for the waste management industry, backed by law, is a major step forward in raising the standards of waste management in this country to a truly professional level. I welcome the support which WAMITAB has already earned from all sides of industry and local authorities. This £100,000 contract from Government is the clearest possible signal of how seriously we take our commitment to raise environmental standards.

The noble Lord, Lord McIntosh, said that he would not press the amendment. I hope that I have given an assurance that his concerns are covered either by the Bill or by regulations elsewhere and that I have allayed his fears on this matter.

3.45 p.m.

Lord McIntosh of Haringey

My Lords, I thank the Minister for that important statement amplifying the Government's position on "fit and proper persons". She will be aware that Amendment No. 132A which comes later in the Marshalled List sets out certain provisions that we wish to add to the legislation. Clearly we shall be dealing with that amendment considerably later this evening. I say with some trepidation in the presence of the noble Lord, Lord Harmar-Nicholls, that it might be for the convenience of the House if the Minister were to let me have a copy of that statement—it is a formal statement not related to this amendment—and perhaps put a copy in the Library so that it will be available for more informed debate when we come to it later this evening. Perhaps I may give way to the Minister so that she can respond.

Baroness Blatch

My Lords, I will make that rather brief statement available to the noble Lord in time for him to use it later in the debate. With the leave of the House, perhaps I may answer another of the noble Lord's questions. The regulations will cover any kind of vehicle. Whether materials are in or are falling out of a skip, if a skip is being transported on a vehicle, the regulations will cover that vehicle.

Lord Lloyd of Kilgerran

My Lords, my Amendment No. 124 deals with training matters. Having regard to the meeting which Professor Isaac had with the Minister of State for the Environment about a month ago, perhaps I may also have a copy of the statement.

Baroness Blatch

With the leave of the House, of course my Lords.

Lord McIntosh of Haringey

My Lords, I am grateful to the Minister. To satisfy the noble Lord, Lord Harmar-Nicholls, that all Members of the House should be treated properly, I am sure that the noble Baroness will wish to make the statement available in the Library of the House as soon as possible. It is important that our debates should be as well informed as they can be. I am glad to see that the precedent which was inadvertently set sometime last year is now accepted as a helpful one.

I am to a considerable extent satisfied with the further explanations about the transport of waste and with the assurances about the classification of waste and also about the definition of vehicular or non-vehicular means of transport. I am still puzzled as to why the noble Baroness refers to the duty of care as being the solution to this problem. It seems to me that the duty of care falls in a different part of the Bill and has different implications. Nevertheless, I think that she has gone some way to meeting the concerns of this amendment.

I still think that it is confusing for those who have responsibility for controlled waste to have to look to different sources of regulation, as they have to now, and to be required to look for transport regulation as well as for environmental legislation. I still find that aspect of the Government's response disappointing. I rather fear that those who are responsible for controlled waste will find it disappointing as well. We have gone as far as we can. On the basis of the reply we have been given, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 30 [Authorities for purposes of this Part]:

Bareness Blatch moved Amendment No. 56: Page 30, line 20, at end insert (", subject to section (Power to create regional authorities for purposes of waste regulation) below").

The noble Baroness said: My Lords, I shall speak also to Amendment No. 57 and, with the leave of the House, delay responding to Amendments Nos. 57A and 57B until after the House has debated those amendments.

Amendments Nos. 56 and 57 will, I am sure, be familiar to your Lordships following the extensive debate in Committee on the merits of regional waste authorities. My noble friend Lord Hesketh said then that discussions were to be held with the local authority associations on the best way of ensuring that the concerns of this House and of another place are met. Those discussions have progressed over the summer months and I am pleased to say that good progress is being made. My honourable friend the Parliamentary Under-Secretary of State for the Environment announced in July that agreement had been reached on the need for voluntary co-operation through the establishment of voluntary joint committees, composed of members of the constituent authorities.

The Government remain firmly committed to the voluntary approach wherever possible and we are convinced that these committees offer the best way forward. These voluntary arrangements will provide the framework for the authorities to compare policies and standards and to integrate their waste disposal plans into a regional overview. The committees will be able to monitor the performance of their members and issue recommendations to those that may be falling behind. They will thus form the foundation on which the authorities will build the consistently higher standards which lie at the heart of this part of the Bill. Best of all, they avoid the need for potentially disruptive changes at the time when we most need authorities to concentrate on the job in hand.

Having said that, we nevertheless believe that reserve powers are necessary in case these voluntary arrangements fail. These amendments meet the commitment given by my noble friend Lord Hesketh in Committee that the Government would consider the need for reserve powers for this contingency. Although discussions with the local authority associations are at an early stage, and we have every confidence that they will succeed, we do not believe it would be right to lose this opportunity to provide reserve powers for the future.

Therefore, these amendments provide powers for the Secretary of State to set up regional authorities to undertake some or all of the functions of waste regulation authorities. It is our fervent hope that such powers will not need to be used. We have every confidence that the discussions currently taking place will provide a system on a voluntary basis to ensure that all authorities are operating to the required high standards. I beg to move.

Lord Jenkin of Roding

My Lords, I should like to say that this new clause is much welcomed. It so happens that I was recently chairing the first ever conference arranged by the National Association of Waste Disposal Contractors.

Lord McIntosh of Haringey

My Lords, I trust that the noble Lord will forgive my intervention at this point. I think that it would be better and lead to a fuller debate if my noble friend Lady David was now to move her Amendment No. 57A and speak also to Amendment No. 57B. These are amendments to Amendment No. 57. If we follow that course, the debate can take in both the Government's new clause as proposed by Amendment No. 57 and also the arguments contained in the amendments of my noble friend.

Lord Jenkin of Roding

My Lords, I apologise most sincerely to the noble Baroness. I did not see her attempt to rise to speak.

Baroness David had given notice of her intention to move Amendment No. 57A as an amendment to Amendment No. 57. Line 4, leave out from ("authorities")") to ("of") in line 5 and insert ("are failing to act in accordance with reasonable consistent standards in the performance").

The noble Baroness said: My Lords, Amendments Nos. 57A and 57B are designed to ensure that the reserve powers to impose joint waste regulation authorities contained in the Government's new clause cannot be invoked unless and until the county and metropolitan waste regulation authorities have had an adequate opportunity to implement the new system of regulation, and have actually failed to do so satisfactorily.

The new clause which is to be inserted after Clause 30 would empower the Secretary of State to create regional waste regulation authorities. It has been tabled in response to the view, rightly or wrongly held in some quarters, that waste disposal authorities are not sufficiently consistent in the standards they apply in performing their licensing functions under the 1974 Act. Those who hold that view, including a Select Committee in another place, have argued that the regulatory function should be removed from existing local authorities and given to new ad hoc regional authorities.

The Government have decided—wisely, in the view of the local authority associations—not to adopt that course. Instead, they propose to take these reserve powers, meanwhile encouraging the local authorities to set up voluntary regional groupings to ensure consistent standards among the authorities in each region. That is already a familiar method of working in matters such as strategic planning.

The new clause gives cause for concern because it is wholly open-ended. The Secretary of State can exercise this power —supposedly a reserve power, to be activated only if the present authorities do not deliver what is asked of them—"if it appears" that the authorities, could with advantage make joint arrangements". Surely these very great reserve powers should be capable of being triggered only if the authorities can actually be shown to be in default. Moreover, the authorities should be given a reasonable amount of time to demonstrate that they have achieved these consistent standards, although they intend to set up the joint machinery well in advance of the legislation coming into force. Both preconditions—that is, actual default and the time threshold, both of which appear in my amendments—should appear on the face of the legislation.

The amendments proposed originate from the Association of County Councils. However, the Association of Metropolitan Authorities supports them. It too dislikes the open-ended nature of the Government's amendment. I understand that a meeting was held this morning and that the local authority associations are willing to give their support to the voluntary grouping of waste regulation authorities across metropolitan and shire areas, subject to detailed discussions on boundaries, composition, staffing of groupings and the final implications. I received a message to that effect just after the business of the House commenced this afternoon.

I hope very much that the Minister will be able to accept these two sensible conditions which I believe the local authority associations would like to see implemented. Otherwise, what is proposed appears to be a high-handed as well as an open-ended clause.

The Earl of Balfour

My Lords, I regret to say that I am rather concerned about this proposed new clause. I shall speak mainly to Amendment No. 57. The reason for my concern is that I am unhappy about the expression "a regional authority". A regional authority in Scotland—that is, if this clause is to apply to Scotland—has a very different meaning and is the equivalent of a county council in England. Therefore, I believe that this aspect could cause some confusion.

I suggest to my noble friend Lady Blatch that she has a choice in the matter: either she chooses another expression such as "a joint authority"; or, perhaps, she could use the same words as appear at the end of Clause 31, which read: This section shall not apply to Scotland".

Lord Jenkin of Roding

My Lords, perhaps this will be third time lucky, and it is to be hoped that I shall be able to say a few words on the matter. This proposed new clause was published on the very day when I was chairing the first conference of the National Association of Waste Disposal Contractors. This body has played an extremely positive and important role in the formulation of the policy which led to Part II of the Bill. I think that I shall be reflecting what was said at the conference when I say that the members of that association are totally committed to achieving the highest standards of waste disposal. They very much welcome the tighter regulation which the Bill contains in order to—if I may put it colloquially—curb the activities of cowboys, some of whom have done a great deal of damage to the reputation of what is by any standards a very important industry.

However, I must point out that it is not only the cowboys who have damaged this reputation; indeed, some national companies have done so. In fact, in this respect, I was involved in a case concerning the Roding Valley. If Lord Jenkin of Roding cannot take part in action to protect the Roding Valley from desecration, then who can? Those concerned paid the price and failed to obtain an extension of their licence to tip because the evidence showing how much it had been abused clearly had a major impact upon the inspector at the appeal and on the Secretary of State. Therefore, as I said, this new clause is very much to be welcomed.

On the question of regional authorities, the new clause was certainly welcomed. There is a recognition that there needs to be a closer co-ordination within the regional areas. I know that the association would have liked a more positive national policy, but I happen to believe that the Ministers are right in not going down that road. In my view, there needs to be a strong element of local accountability in both the regulation and the disposal. That element would have been eroded to the point of disappearance if one had had national arrangements.

However, perhaps the message which came through most clearly in many of the addresses which were delivered to the conference to which I have referred was the fact that there remains a great deal of detail to be filled in. I understand that all sorts of guidance is to be provided. We heard an important statement this afternoon made by my noble friend regarding "the fit and proper person" and the role of WAMITAB. I hope that I too may receive a copy of that document. There are also many other matters upon which the department has undertaken to give guidance. I refer to the standards to be attained by the regulating authorities and a range of related matters, some of which are referred to in the White Paper on the environment.

Many of those who are actively and responsibly involved in the industry have said that it is extremely difficult for them to plan their operations effectively —especially their investment—until the guidance is made available. The White Paper makes the point that a great deal more investment is needed in the industry.

I sense that the proposed new clause is hanging on the issue of the power of the regional authority. However, I hope that my noble friend can give some assurance that the department will have the necessary skilled manpower and cash resources available. In that way the process of giving guidance to the industry and to the regulation authorities can be conducted with due dispatch and the whole function and purpose of Part II of the Bill can be carried through as swiftly as possible. If my noble friend can give that assurance I know that it will be welcomed by those who will properly and responsibly do their best to try to comply with the new regulatory environment which the Bill sets up. There is anxiety that the resources will not be available within the department and the regulatory authorities to be able to do that as swiftly and as effectively as I believe Ministers would wish.

4 p.m.

Lord Lucas of Chilworth

My Lords, perhaps I may return to Amendment No. 57 which I broadly welcome. It is clear that the Government set great store by the voluntary arrangements. It makes good sense to come to those arrangements, because resources, both of people and finance, are not limitless. At the conference to which my noble friend Lord Jenkin of Roding referred, which I attended, anxiety was expressed about the guidance. The anxiety was not in terms of whether the department had the resources to produce the guidance but whether it would be available in time for the various parties to take account of it.

On Monday we heard from my noble friend the Minister about the recruitment of staff to HMIP. The National Association of Waste Disposal Contractors made it abundantly clear at its conference that it had training programmes in place and could meet the demand from its end. There should not be the concern about resources per se. As I understand it, the power to be given to the Secretary of State is a reserve power. I understand from correspondence that has been exchanged between me and the department that it is considered to be a long stop. My noble friend the Minister made that point when she introduced the amendment. I do not share her confidence, but that is beside the point. The powers are there.

I cannot see why those powers as set down in the amendment cannot remain as they are. They are neat and tidy. If one goes on to make special arrangements for Scotland—my noble friend Lord Balfour will agree, if he looks at Clause 52, that special arrangments are in place for Scotland—and adopts the amendments tabled by the noble Baroness, Lady David, that will merely confuse the issue and charge and counter charge will follow. It will be self-evident as to whether a voluntary arrangement has been put in place, and if it has not the Secretary of State has powers to make the necessary orders. I believe that that is all we need. I should be happy were the House to accept the amendment moved by my noble friend as it stands.

Baroness Carnegy of Lour

My Lords, I have not previously spoken on this part of the Bill but I have listened with interest to the discussion. I think that my noble friend the Minister should pay attention to what my noble friend Lord Balfour has said. The wording of Amendment No. 57 will cause confusion in Scotland, and as I read the Bill the clause applies to Scotland. I presume that the Scottish local authorities have been consulted and welcome it. I have no reason to think otherwise. I do not know whether the noble Baroness, Lady David, consulted the Scottish local authorities before she put down her amendments, but they would obviously also have an interest in them.

With regard to Amendment No. 57, it is merely a question of clarifying what a region means. A regional authority is made up of district authorities and is the upper tier of local government, as my noble friend Lord Balfour said. It could be confusing. A small alteration to the wording would doubtless clarify the matter. The House need not make a meal of that at the moment.

Lord Ross of Newport

My Lords, the noble Lord, Lord Lucas, was supporting the amendments so ably put forward by the noble Baroness, Lady David, and which I support. All they are asking for is time for the local authorities to try to come up with their own schemes. I understand that the Government need reserve powers in case they find that the waste management arrangements between authorities are breaking down and they need to step in. All that is being asked for is adequate time to discuss these matters which are complex.

I have never represented a mainland authority, but trying to find holes in the ground in a place like the Isle of Wight was awful. We considered all sorts of ideas such as transporting the waste to Oxfordshire. I am glad to say not Cambridge! In the end we built our own plant. These matters take time. I am sure that the Minister will be sympathetic to that point. I hope that she will take on board the amendments which the ACC and AMA are anxious to see written into the Bill.

Baroness White

My Lords, I too had the privilege of attending the conference presided over by the noble Lord, Lord Jenkin of Roding. Perhaps I may ask today a question I asked there. Does the amendment moved by the Minister cover Wales? Are parts of Wales to be called regional?

Baroness Blatch

My Lords, I shall begin by welcoming the comments made by my noble friend Lord Jenkin of Roding on the government amendments. I agree with him that that way forward is a real one. I also noted with some feeling the points that he made: first, about the urgent need—this point was also made by my noble friend Lord Lucas—for the guidance and the fact that the industry is anxious to receive it. I can give the assurance that the department is actively making arrangements to staff up for the implementation of the Bill as soon as possible, and the preparation of the guidance is very much in hand.

Perhaps I may also address the point made by my noble friend Lord Balfour which was supported by my noble friend Lady Carnegy. As always, my noble friend Lord Balfour is most astute in these matters. The clause applies to Scotland and the Scottish Office, but there is no need to change the phrase "regional authorities"; it is merely a convenient label for the purpose of drafting the clause. It does not mean that the authorities must be called regional authorities. They may have a variety of names. There is no stipulation as to the names they may choose to use. They may be called joint waste regulation authorities. That is not precluded by the Bill.

Lord Harmar-Nicholls

My Lords, perhaps I may interrupt my noble friend. My noble friend Lord Balfour made the point not that the difficulty could not be overcome but that it would cause some confusion. Is there a need to leave even a modicum of confusion when the matter could be put right by the addition of another word?

Baroness Blatch

My Lords, my understanding of the point is that to stipulate that the authorities should be called regional authorities would cause confusion because of the very point made by my noble friends Lord Balfour and Lady Carnegy. If we stipulated that they should be called regional or joint authorities there would be a difficulty. Choosing the name will be a matter for local determination. What is essential is that the committees work and deliver the service.

I can also say to the noble Baroness, Lady White, that the Bill of course covers Wales and the explanation of what the committee is called will apply to Wales as it does to Scotland and England.

Amendments Nos. 57A and 57B are both in the name of the noble Baroness, Lady David. They appear to be fairly minor amendments to the amendment we have just debated, giving the Secretary of State a reserve power to set up regional waste regulation authorities.

Amendment No. 57A would restrict the grounds on which the Secretary of State's reserve powers could be used to cases where existing regulation authorities were not consistent. I cannot believe that the noble Baroness really wishes to place such a restriction on the use of a reserve power which was widely called for both here and in another place. It is true that one of the key arguments in favour of regional waste regulation authorities is the need to secure consistent waste regulation standards, but that is not the only reason, as I explained earlier.

This amendment could also be cited in defence of authorities whose standards were consistently reasonable. We all want standards of regulation to be raised to the highest levels. This amendment could impede that process of improvement. For that reason, I hope that the noble Baroness will feel able to withdraw it.

Turning to Amendment No. 57B, also in the name of the noble Baroness, Lady David, this is a further restriction on the use of the reserve power to create regional regulation authorities. As I believe was made perfectly plain earlier in the debate, we have no intention of rushing in to use this power. If satisfactory voluntary arrangements can be made by the voluntary authorities themselves, we prefer to leave it at that.

Perhaps I may take the liberty of illustrating one area of the country where a regional voluntary committee works extremely well. It is the region from which both the noble Baroness and I come—East Anglia. The standing conference for East Anglian local authorities works extremely well, as I am sure SERPLAN 2 works well, in that it takes on regional issues and co-operates across county and district government in a productive way. That is a good example of the kind of voluntary arrangements I believe will spring up as a result of the Bill.

However, by the same token, if no satisfactory arrangements are made the Secretary of State must be able to use this power as soon as is necessary. I cannot accept an arbitrary time-limit of three years as proposed in this amendment. There are many people who would argue that we should have used this opportunity to create regional waste regulation authorities right away. The Government remain convinced that existing regulation authorities should be given the chance to show that they can work together to implement the higher standards of waste management provided for in this Bill. I assure noble Lords now that voluntary arrangements will be given a good chance to work, but if no arrangements are made or if those arrangements fail to deliver, the Secretary of State must be able to act to create regional authorities.

I believe that we are all at one in terms of the objectives of this part of the Bill. We are talking about means to an end and I hope that the noble Baroness will take on trust that authorities will be given time to create these productive committees. However, at the end of the day, if they are not working the sooner the Secretary of State puts it right the better.

Baroness Carnegy of Lour

My Lords, before my noble Friend sits down, and with the leave of the House, will she take another look at this matter? I am perfectly prepared to back the amendment, but quite frankly I do not believe that she is right in saying that there will be no confusion in Scotland. "Regional authority" simply means a local government area. The legislation will have to be referred to all the time.

I should have thought it quite unnecessary to word the provision in such a way that in one part of the country it is extremely confusing. These could perfectly well be called joint authorities or something similar. Perhaps my noble friend will look at this point and consult the Scottish Office to make certain that they are happy about it. Maybe they have been consulted, but the noble Baroness's reply seems to me to be rather strange. I imagine the Bill will operate in that way when it becomes law.

Baroness Phillips

My Lords, perhaps I may ask for information as this is a new clause. Which is the regional authority to cover the capital city? Perhaps the Minister will write to me.

Baroness Blatch

My Lords, perhaps I may take my noble friend's point first. We have tried hard not to be over-prescriptive in the matter and to provide for different parts of the country which will differ as to the size of the areas they cover. However, I take note of what m y noble friend said. I shall take the wording back and look at it between now and Third Reading, without commitment, as she will understand.

The answer to the noble Baroness, Lady Phillips, is that this has been the subject of considerable discussion with the authorities, particularly the Association of Metropolitan Authorities. I un-derstand that there has been agreement, as the noble Baroness, Lady David, said a moment ago, that the metropolitan areas will have to work across boundaries with their county neighbours. It is envisaged that a single metropolitan area will not form a regional tier, a regional committee, but the metropolitan areas will agree to work with their neighbouring shire authorities.

Baroness David

My Lords, I thank the Minister for her reply. I am entirely in agreement. The objectives are the same. I believe I said that both the Association of County Councils and the Association of Metropolitan Authorities are quite content that this clause should be in the Bill. However, they wanted some reassurance that they would be treated with consideration. That seems to me to be quite reasonable. Surely both local and central government should want to get on with and consider each other.

The noble Baroness has given some reassurance. I should like to read what she has said and consult the two associations to find out whether they are satisfied with what the Minister has said. If not, I shall have to come back at the next stage of the Bill.

On Question, Amendment No. 56 agreed to.

4.15 p.m.

Lord Ezra moved Amendment No. 56A: Page 31, line 35, at end insert: ("(4A) In exercising his powers under section 10 of the Local Government Act 1985, the Secretary of State shall have regard to the desirability of the promotion of recycling waste, and to the maintenance of any existing arrangements for such recycling.").

The noble Lord said: My Lords, I beg to move Amendment No. 56A, which has been grouped with Amendment No. 87A. I believe that there would be no argument that one of the objectives of this important piece of legislation must be to encourage all desirable initiatives which will improve the environment. I welcome the announcement that the Government have decided to set up the Waste Management Industry Training and Advisory Board under the distinguished chairmanship of the noble Lord, Lord Gregson.

However, I specifically wish to refer under these two amendments to the discouraging impact which certain clauses could have on local authorities which have already shown considerable success in the environmental field. I refer to recycling. In the Second Reading debate on the Bill which took place on 18th May last, I referred to the case of the borough of Richmond upon Thames which had developed a successful operation in recycling. Its efforts in that regard could be frustrated if the various relevant provisions in the Bill go through unamended.

I have since informed myself of what that local authority—and there are many others—has achieved in this field. I believe that your Lordships will be interested to know what it has been doing. It now has no fewer than 54 paper banks; 19 bottle banks; 12 rag banks; nine save-a-can banks and 90 Alcan aluminium can banks. That gives it the best recycling facilities in London and makes it one of the top recycling boroughs in the country. Alcan chose Richmond for the launch of its can bank scheme. The borough now recycles 8 per cent. of its household waste in comparison with a national average of 2 per cent. It recycles 30 per cent. of its glass waste and 20 per cent. of its paper waste, and its aim is to recycle 25 per cent. of all household waste within four years.

This is well within the target set by the Secretary of State for the Environment in his important statement at the Conservative Party conference last year. Thus one would have thought that this borough—which has not only achieved a great success but is paying for it out of the operation and earning more which it is putting back into further initiatives—should be encouraged in this endeavour. Unfortunately, under the terms of the legislation it is likely to have to give this up.

In replying, the noble Baroness will say that the borough could well contract out the service. However, if it were to contract out the service it would lead to a severe diminution in the impetus that has now been created. A large number of the recycling banks to which I have referred are located on local authority grounds. Therefore any third party that attempted to take them over under the terms of the legislation would find that all kinds of questions were raised as regards negotiations. In my view we must decide our priorities. Is it our priority to encourage every possible form of environmental improvement, whether undertaken by local authorities or by the private sector, or is it our objective to inhibit local authorities which already have a proven record in this field—I could mention Sheffield, but there are many others —from proceeding in the direction on which they have already so successfully embarked? The amendments are modest. They are intended to help to achieve what must be the fundamental purpose of the legislation which is to encourage all those who have a proven record in improving the environment, particularly with regard to recycling. I commend the amendments to the attention of your Lordships. I beg to move.

Lord Harmar-Nicholls

My Lords, Amendment No. 56A is certainly a constructive amendment and should be looked at with sympathy. It does not matter whether the words of the amendment are correct, because I am sure that the spirit behind it is right. I agree with the noble Lord, Lord Ezra, that this is a modest amendment in the sense that its operative words are, the Secretary of State shall have regard to the desirability of the promotion of recycling waste". Those words seem reasonable enough. The amendment points in the direction that I believe everyone would wish to go. I agree with the noble Lord that it would be sad if we allowed the Bill to go through if it interfered, even marginally, with the efforts that are being made in many quarters to encourage and develop recycling. For what it is worth, I suggest to my noble friend that the amendment is modest and constructive. The spirit of the amendment should be included in the Bill.

Lord McIntosh of Haringey

My Lords, I wish to add my support to the amendment moved by the noble Lord, Lord Ezra. I have a local interest in the amendment, too. As the noble Lord said, Richmond is a member of the statutory West London waste authority whereas my borough of Haringey is a member of the statutory North London waste authority and finds itself in exactly the same position as Richmond. When the statutory waste authority is disbanded, Haringey will become both a collection and a disposal authority and will, according to the terms of Clause 47(7) as drafted, no longer be able to undertake recycling work directly. It is true that Clause 47(7) states that a borough may make arrangements for a contractor to carry out the work. However, all that we know about recycling reveals that it is not very often a commercial proposition. The noble Lord, Lord Ezra, is one of the leading experts in the country on this subject and I am sure he will confirm that I am right. For a recycling scheme to work there has to be, preferably, active management involvement on the part of local authorities and certainly financial management on their part.

I cannot believe that the Government intended that metropolitan boroughs which find themselves in this position, and whose status is changed by other parts of the Bill, should be debarred from being directly involved in recycling work as they have carried this out successfully in the past. The provision also applies outside metropolitan areas. It applies to such cities as Leeds and Sheffield which are conspicuously good at recycling. I have no doubt there are other examples but I shall not attempt to draw up a list. The Government's intention surely is to encourage recycling. They should have the intention of rewarding those councils that have carried out recycling successfully. I cannot for the life of me see why this amendment which the noble Lord, Lord Harmar-Nicholls, correctly described as modest and constructive, should not be adopted, at any rate in spirit, by the Government.

Lord Hatch of Lusby

My Lords, I wish to mention briefly the responsibility of local authorities, in particular as regards the recycling of refrigerators. I have mentioned before in the House the Bird group of companies which can recycle refrigerators. However, it can only do so—it has stated this to be the case publicly—when legislation exists which imposes a duty of recycling on local authorities. This is necessary as a result of the cost of the recycling. The recycling of refrigerators is an important part of the recycling process because it involves the CFCs within the refrigerators.

That company has stated categorically that it cannot proceed with its recycling work unless there is legislation. If this amendment were included in the Bill, it would at least go some way towards providing legislation which would enable not just the disposal of refrigerators to be carried out, but also the recycling of the CFCs which they contain to the benefit of the whole community.

The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran)

My Lords, I shall do my best to try to put the minds of noble Lords who have commended this amendment at rest as regards why the Government still regard these two amendments as unnecessary. Amendment No. 56A standing in the name of the noble Lord, Lord Ezra, would require the Secretary of State to, have regard to the … promotion of recycling waste, and to the maintenance of any existing arrangements for such recycling when exercising his powers, under section 10 of the Local Government Act 1985". This amendment is unnecessary because recycling arrangements are part of the overall arrangements for waste disposal. Therefore the Secretary of State is already under a duty to consider recycling. But the amendment goes further than this, and sets up a presumption in favour of the maintenance of existing arrangements. We cannot accept that this would be right. We know that there are many excellent schemes in the metropolitan areas for recycling and it is not the Government's intention to disrupt these schemes. It may be necessary to organise them rather differently; for example, plant and equipment for recycling in the metropolitan areas will be provided through arrangements with a contractor, either the authorities own LAWDC or a private sector company. But there is no need for the schemes to cease to exist if they are indeed good schemes. The provisions of the Bill however allow this to be tested by allowing people to come forward with new ideas which might improve recycling.

Amendment No. 87A standing in the name of the noble Lord, Lord Ezra, would delete subsection (7) from Clause 47. The effect of this would be to allow authorities which are both collection and disposal authorities to provide plant and equipment for sorting and baling waste. As your Lordships will be aware, Clause 47 empowers collection authorities to provide certain plant and equipment for the sorting and baling of waste. However, where a collection authority is also a disposal authority that power is removed. The reason for this is that under the terms of the Bill waste disposal authorities will no longer be able to operate waste disposal facilities directly themselves. It makes little sense to allow an authority to provide facilities as a collection authority which as a disposal authority it would not be able to provide.

At issue here is how we treat those authorities which are both collection and disposal authorities; in particular we are talking about most borough councils in the former metropolitan counties and Welsh districts. The amendment seeks to treat them as collection authorities allowed to provide certain plant and equipment. The Government's view is that such authorities must be treated as disposal authorities for the sake of consistency. This will not prevent those authorities from ensuring that facilities for sorting and baling waste are available. They will simply make those facilities available by different means; that is by arranging with their LAWDC or a private sector firm to provide them on their behalf.

There is no reason why the clause as drafted should obstruct authorities which are both collection and disposal authorities from arranging for the sorting or baling of waste, nor from any other activity concerning recycling. They will simply organise it in a different manner, just like any other waste disposal authority.

I can tell the noble Lord, Lord Ezra, that we are, of course, extremely pleased to hear that Richmond currently provides excellent recycling facilities. We can assure the noble Lord that those arrangements need not be adversely affected as a result of the Bill. Authorities like Richmond, which will be both collection and disposal authorities, will not be able to provide facilities directly themselves. However, they will be able to arrange for such facilities to be provided by contractors.

It is for those reasons that I hope that I have persuaded the noble Lord, Lord Ezra, and other noble Lords not to press the amendments.

Baroness Phillips

My Lords, before the noble Lord replies to the Minister, I should like to say that this seems a piece of bureaucratic nonsense which does not stand up to a common-sense examination. If the Minister really wanted to convince the House he could take Richmond as an example. My own borough of Fulham is also a very good disposal authority as well as a collection authority. We have not been told which is the regional authority to which the metropolitan boroughs will have to report. How can we give powers to the Government when we do not know which authority will carry them out?

As usual we are told that there will be changes. Changes are not always for the better and are certainly always much more expensive. Who will foot the bill? —the unfortunate people living in the boroughs. The Minister will have to give a much more convincing answer to the noble Lord who moved the amendment before he will withdraw it.

Lord Ross of Newport

My Lords, it seems absolute nonsense to break up very good schemes in places such as Richmond just because everything has to be done through private contractors.

Lord Harmar-Nicholls

My Lords, I thought that we had agreed that the procedure on Report was that after the Minister had replied there would be no further continuation of the debate, otherwise we shall never get through the business.

Lord Ezra

My Lords, perhaps I can now respond, having listened very carefully to what noble Lords have said in this short debate and in particular to what the Minister said. I, too, am extremely disappointed. The Minister couched his remarks, as he always does, in a conciliatory tone, but the fact remains that many very desirable initiatives for which the Bill exists have already been taken. Those who have taken them are now very discouraged and they do not face with equanimity the thought that they have to bring their initiatives to a stop and go through the lengthy process of finding others to carry out what they themselves have done with signal success.

I am very surprised that the Government are not prepared to accept what the noble Lord, Lord Harmar-Nicholls, rightly described as a very modest amendment which is intended to take account of achievements already delivered in this very important area. I had hoped that the Minister would agree with the arguments put forward from all sides of the House in this short debate. I regret to say that I should like to put the amendment to the test.

On Question, Whether the said amendment (No.56A) shall be agreed to?

Their Lordships divided: Contents, 93; Not-Contents, 111.

Division No. 1
CONTENTS
Addington, L.	Cocks of Hartcliffe, L.
Airedale, L.	Craigavon, V.
Aldenham, L.	David, B.
Allen of Abbeydale, L.	Dean of Beswick, L. [Teller.]
Ardwick, L.	Donaldson of Kingsbridge, L.
Attlee, E.	Dormand of Easington, L.
Birk, B.	Ezra, L. [Teller.]
Blackstone, B.	Falkland, V.
Blease, L.	Foot, L.
Bonham-Carter, L.	Gallacher, L.
Broadbridge, L.	Galpern, L.
Bruce of Donington, L.	Gladwyn, L.
Carmichael of Kelvingrove, L.	Glasgow, E.
Carter, L.	Graham of Edmonton, L.
Cledwyn of Penrhos, L.	Gregson, L.
Clinton-Davis, L.	Grey, E.

Hampton, L.	Prys-Davies, L.
Hanworth, V.	Rea, L.
Harmar-Nicholls, L.	Richard, L.
Hatch of Lusby, L.	Ritchie of Dundee, L.
Hayter, L.	Robson of Kiddington, B.
Hollis of Heigham, B.	Ross of Newport, L.
Holme of Cheltenham, L.	Sainsbury, L.
Hooson, L.	Scanlon, L.
Hunter of Newington, L.	Seear, B.
Jeger, B.	Seebohm, L.
Jenkins of Hillhead, L.	Serota, B.
Jenkins of Putney, L.	Shackleton, L.
John-Mackie, L.	Shaughnessy, L.
Kilbracken, L.	Shepherd, L.
Kinloss, Ly.	Stedman, B.
Kintore, E.	Stoddart of Swindon, L.
Kirkhill, L.	Swinfen, L.
Llewelyn-Davies of Hastoe, B.	Taylor of Blackburn, L.
Lloyd of Kilgerran, L.	Thomson of Monifieth, L.
Longford, E.	Tordoff, L.
Lovell-Davis, L.	Turner of Camden, B.
McIntosh of Haringey, L.	Underhill, L.
McNair, L.	Walpole, L.
Morris of Castle Morris, L.	Whaddon, L.
Mulley, L.	White, B.
Nicol, B.	Williams of Elvel, L.
Oram, L.	Willis, L.
Parry, L.	Winchilsea and Nottingham, E.
Peston, L.	Winstanley, L.
Phillips, B.	Winterbottom, L.
Pitt of Hampstead, L.

NOT-CONTENTS
Alport, L.	Harvington, L.
Ampthill, L.	Henley, L.
Arran, E.	Hesketh, L.
Auckland, L.	Hives, L.
Balfour, E.	Holderness, L.
Belhaven and Stenton, L.	Jenkin of Roding, L.
Beloff, L.	Johnston of Rockport, L.
Belstead, L.	Killearn, L.
Bessborough, E.	Kimberley, E.
Blatch, B.	Knollys, V.
Blyth, L.	Lauderdale, E.
Borthwick, L.	Layton, L.
Boyd-Carpenter, L.	Long, V. [Teller.]
Brabazon of Tara, L.	Lucas of Chilworth, L.
Brookes, L.	Lyell, L.
Brougham and Vaux, L.	McColl of Dulwich, L.
Butterworth, L.	Mackay of Clashfern, L.
Buxton of Alsa, L.	Margadale, L.
Caithness, E.	Merrivale, L.
Caldecote, V.	Mersey, V.
Campbell of Alloway, L.	Mowbray and Stourton, L.
Campbell of Croy, L.	Munster, E.
Cavendish of Furness, L.	Murton of Lindisfarne, L.
Charteris of Amisfield, L.	Napier and Ettrick, L.
Clanwilliam, E.	Nelson, E.
Clitheroe, L.	Norrie, L.
Coleraine, L.	Nugent of Guildford, L.
Constantine of Stanmore, L.	O'Brien of Lothbury, L.
Crickhowell, L.	Orkney, E.
Cullen of Ashbourne, L.	Orr-Ewing, L.
Davidson, V. [Teller.]	Oxfuird, V.
Denham, L.	Palmer, L.
Derwent, L.	Pearson of Rannoch, L.
Effingham, E.	Peyton of Yeovil, L.
Elibank, L.	Platt of Writtle, B.
Ellenborough, L.	Porritt, L.
Elliot of Harwood, B.	Pym, L.
Elphinstone, L.	Radnor, E.
Faithfull, B.	Reay, L.
Ferrers, E.	Rees, L.
Fraser of Kilmorack, L.	Renton, L.
Gainford, L.	Renwick, L.
Gisborough, L.	Richardson, L.
Gridley, L.	Rodney, L.
Hailsham of Saint Marylebone,	Romney, E.
L.	St. Davids, V.
Halsbury, E.	Sharples, B.

Skelmersdale, L.	Terrington, L.
Slim, V.	Thorneycroft, L.
Stodart of Leaston, L.	Trumpington, B.
Strange, B.	Tryon, L.
Strathcarron, L.	Ullswater, V.
Strathclyde, L.	Vaux of Harrowden, L.
Strathmore and Kinghorne, E.	Whitelaw, V.
Sudeley, L.	Wise, L.
Swansea, L.	Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.40 p.m.

Baroness Blatch moved Amendment No. 57: After Clause 30, insert the following new clause:

("Power to create regional authorities for purposes of waste regulation

.—(1) If it appears to the Secretary of State in the case of any two or more of the authorities mentioned in section 30(1) above that those authorities (in this section referred to as "relevant authorities") could with advantage make joint arrangements for the discharge of all or any of their functions as waste regulation authorities, he may by order establish a single authority (a "regional authority") to discharge such of those functions as may be specified in the order for the area comprising the areas of those authorities.

(2) A regional authority shall exercise the functions specified in the order establishing it on and after a day specified in the order and, so far as the exercise of those functions (if not withdrawn) and any subsequently-conferred functions is concerned, shall (in place of the relevant authorities) be the waste regulation authority for the purposes of this Part.

(3) The members of a regional authority shall be appointed by the relevant authorities in accordance with the order establishing it and no person shall be such a member unless he is a member of one of the relevant authorities.

(4) The Secretary of State may by order made with respect to any regional authority—

1. (a) confer or impose on it further functions;
2. (b) withdraw from it any functions previously conferred or imposed; or
3. (c) dissolve it;

and functions may be so conferred or imposed or withdrawn as respects the whole or any part of the authority's area.

(5) An order under this section may contain such supplementary and transitional provisions as the Secretary of State thinks necessary or expedient, including provision for the transfer of property, staff, rights and liabilities.").

The noble Baroness said: My Lords, I beg to move.

Baroness David My Lords, I have already spoken to Amendment No. 57A, but I shall not move it.

[Amendment No. 57A, as an amendment to Amendment No, 57, not moved.]

[Amendment No. 57B, as an amendment to Amendment No. 57, not moved.]

On Question, Amendment No. 57 agreed to.

Lord McIntosh of Haringey moved Amendment No. 58: Page 32, line 26, at end insert: ("(2A) Nothing in Part V of the Local Government and Housing Act 1989 insofar as it relates to expenditure for capital purposes as referred to in section 40 of that Act shall apply to a waste disposal company formed in accordance with subsection (2) above").

The noble Lord said: My Lords, Amendment No. 58 also arises from a quite unsatisfactory discussion during Committee stage about the role, powers and responsibilities of local authority waste disposal companies. We put forward amendments at Committee stage which tried to remove the arm's length status from local authority waste disposal companies, because we argued that it would be far better if they were wholly owned subsidiaries of their controlling authorities.

The Government argued that the arm's length status of the local authority waste disposal companies, which are called by the nasty acronym of LAWDCs, was appropriate, because in that way they would be subject to the full effect of the market rather than be protected by the controlling authority.

That is an argument and it is not the position that I would wish to take. However, if that were what the Bill provided, we would have to recognise a difference of political judgment and ultimately let the matter go. Unfortunately, that is not the case. What is happening is that LAWDCs are to be arm's length companies, but they will still be constrained by the ability of the parent authorities to provide capital for them. All the elements of competition are there, except the power of a LAWDC to raise capital for the development and conduct of its services.

If the Government's argument about the competitive spirit is to have any effect, the LAWDC should have the right to take its own decisions about whether capital investment in facilities is necessary, and to decide whether the funds should be raised on the open market. What we are proposing in these amendments is quite different from what we proposed at Committee stage. We are proposing now that the LAWDCs should be freed from any capital constraints which may be placed upon the parent authorities.

What is happening is the worst of all possible worlds. We have LAWDCs forced into the private sector with one hand tied behind their backs. Lest anybody should think that this is a theoretical point, the capital element of waste disposal is enormously important. For example, a full scale waste incinerator can easily cost £50 million. A new landfill site with the servicing which is required, including, quite possibly, roads to and from the site, reception facilities, testing laboratories, weighbridges and so on, can easily cost many millions of pounds.

Local authorities, as is well known—it is the Government's political policy—are very severely constrained in the amount of capital that they are able to spend. If the LAWDCs are included within those capital constraints, then they will not be able to make proper investment decisions and will not be able to compete properly in the marketplace. The result will be that people who need to use the services of the waste disposal contractors—and that is all of us—will get something less than the best available service at the best possible price. What we are seeking to do by this amendment is to remove the constraint.

It is possible for some assessment to be made of the environmental benefits which would require capital expenditure, and it is certainly possible that there could be some sort of control by the Secretary of State to ensure that capital expenditure reflects real needs for environmental benefit. We are certainly not opposed to proper scrutiny of capital expenditure, but we want the capital expenditure to be available where it is justified, on the basis of the activities of the local authority waste disposal company, rather than be put into the queue with other forms of local authority capital finance. I beg to move.

Baroness Blatch

My Lords, Amendment No. 58, in the name of the noble Lord, Lord McIntosh, seeks to exempt LAWDCs from the local authority capital finance controls. This is a subject which was explored during earlier debates in another place on this Bill, and before that in very full debates in your Lordships' House and in another place during the passage of the Local Government and Housing Bill, now the 1989 Act.

I do not intend to go over the same ground at great length today. Suffice it to say that a major part of any government's economic policy must be to control public expenditure. Current local authority waste disposal operations are already subject to the capital finance regime, so these controls on local authorities are not new. LAWDCs will be set up as arm's length companies controlled by local authorities. It is only right and proper therefore that while LAWDCs continue to be controlled or influenced by local authorities they should be subject to the local authority capital finance rules. This general point was made, and accepted, during the passage of the Local Government and Housing Bill; and, again, because these companies are, to some extent, underwritten by the local authorities.

It should also be remembered that if an authority chooses to relinquish control or influence of its LAWDC, the capital finance rules no longer apply. In this way, significant new private investment can be brought into waste disposal to meet the new higher standards which public sector regulators will concentrate on enforcing.

Responding to the point made by the noble Lord, Lord McIntosh, about LAWDCs being subject to the parent authorities' capital controls, the managers of the facilities will be in no different position in a LAWDC than in their parent authority. In either case, they will be subject to capital controls. If the authority was willing to make the capital available for inhouse operators, it should be willing to do so for a LAWDC.

Lord McIntosh of Haringey

My Lords, with due respect, the last part of that answer is beside the point. Of course it is true that a LAWDC will be in the same position as a local authority department. The point is that a LAWDC will be in competition not with other local authority departments, but with the private sector. If the Government intend there to be arm's length operation, whether it is fully privatised or not, then the Government must ensure that there is a level playing field. They must ensure that a LAWDC which is competing to carry out waste disposal work is doing so on equal terms with a potential contractor from the private sector. That is not what is achieved by the Bill as at present drafted.

It is almost pointless for the Government to put in this provision for arm's length operation for a LAWDC unless they are prepared to provide the same opportunity for sensible capital investment by a LAWDC as is available to a private contractor.

The Minister says that she will not go over the ground of the 1989 Act. Indeed, I do not want to do that any more than she does. However, she is not correct in thinking that at the time of the 1989 Act we were all in agreement that the kind of privatisation or near privatisation which was proposed by the Government was the best solution for local government. In so far as there has yet been experience of the implementation of the 1989 Act—and I agree that it is limited—such evidence as there is shows that we were right and the Government were wrong. What has happened is that much of the back-door privatisation has been unsuccessful or, in even more cases, abortive.

I do not find the Minister's answer satisfactory either historically or in relation to the present Bill. I believe that the right thing for me to do is to take the opinion of the House.

4.51 p.m.

On Question, Whether the said amendment (No. 58) shall be agreed to?

Their Lordships divided: Contents, 83; Not-Contents, 112.

Division No. 2
CONTENTS
Addington, L.	Jenkins of Hillhead, L.
Airedale, L.	Jenkins of Putney, L.
Ardwick, L.	John-Mackie, L.
Attlee, E.	Kilbracken, L.
Birk, B.	Kintore, E.
Blackstone, B.	Kirkhill, L.
Blease, L.	Llewelyn-Davies of Hastoe, B.
Bonham-Carter, L.	Lloyd of Kilgerran, L.
Boston of Faversham, L.	Longford, E.
Broadbridge, L.	Lovell-Davis, L.
Bruce of Donington, L.	McIntosh of Haringey, L.
Carmichael of Kelvingrove, L.	McNair, L.
Carter, L.[Teller.]	Morris of Castle Morris, L.
Cledwyn of Penrhos, L.	Nicol, B.
Clinton-Davis, L.	Oram, L.
Cocks of Hartcliffe, L.	Parry, L.
David, B.	Peston, L.
Dean of Beswick, L.	Phillips, B.
Donaldson of Kingsbridge, L.	Pitt of Hampstead, L.
Dormand of Easington, L.	Prys-Davies, L.
Ezra, L.	Rea, L.
Falkland, V.	Richard, L.
Foot, L.	Ritchie of Dundee, L.
Gallacher, L.	Robson of Kiddington, B.
Galpern, L.	Ross of Newport, L.
Gladwyn, L.	Sainsbury, L.
Glasgow, E.	Seear, B.
Glenamara, L.	Seebohm, L.
Graham of Edmonton, L.	Serota, B.
[Teller.]	Shackleton, L.
Gregson, L.	Shannon, E.
Grey, E.	Shepherd, L.
Hampton, L.	Stedman, B.
Hanworth, V.	Stoddart of Swindon, L.
Hatch of Lusby, L.	Taylor of Blackburn, L.
Hayter, L.	Thomson of Monifieth, L.
Holme of Cheltenham, L.	Tordoff, L.
Hooson, L.	Turner of Camden, B.
Jeger, B.	Underhill, L.

Whaddon, L.	Willis, L.
White, B.	Winchilsea and Nottingham, E.
Williams of Elvel, L	Winstanley, L.

NOT-CONTENTS
Aldenham, L.	Killearn, L.
Arran, E.	Kimberley, E.
Auckland, L.	Knollys, V.
Balfour, E.	Lauderdale, E.
Belhaven and Stenton, L.	Lloyd of Hampstead, L.
Beloff, L.	Long, V.[Teller.]
Belstead, L.	Lucas of Chilworth, L.
Bessborough, E.	Lyell, L.
Blatch, B.	McColl of Dulwich, L.
Blyth, L.	Mackay of Clashfern, L.
Borthwick, L.	Margadale, L.
Boyd-Carpenter, L.	Merrivale, L.
Brabazon of Tara, L.	Mersey, V.
Brookes, L.	Mowbray and Stourton, L.
Brougham and Vaux, L.	Munster, E.
Butterworth, L.	Murton of Lindisfarne, L.
Buxton of Alsa, L.	Nelson, E.
Caithness, E.	Norrie, L.
Caldecote, V.	O'Brien of Lothbury, L.
Campbell of Alloway, L.	Orkney, E.
Campbell of Croy, L.	Orr-Ewing, L.
Carnegy of Lour, B.	Oxfuird, V.
Charteris of Amisfield, L.	Pearson of Rannoch, L.
Chavendish of Furnesss, L.	Peyton of Yeovil, L.
Clitheroe, L.	Piatt of Writtle, B.
Coleraine, L.	Porritt, L.
Constantine of Stanmore, L.	Pym, L.
Craigavon, V.	Radnor, E.
Craigmyle, L.	Reay, L.
Craigton, L.	Renton, L.
Crickhowell, L.	Renwick, L.
Cullen of Ashbourne, L.	Richardson, L.
Davidson, V.[Teller.]	Rodney, L.
Denham, L.	Romney, E.
Derwent, L.	St. Davids, V.
Dilhorne, V.	Selborne, E.
Effingham, E.	Sharples, B.
Elibank, L.	Skelmersdale, L.
Elliot of Harwood, B.	Slim, V.
Elphinstone, L.	Stodart of Leaston, L.
Faithfull, B.	Strange, B.
Ferrers, E.	Strathcarron, L.
Forester, L.	Strathclyde, L.
Gainford, L.	Strathmore and Kinghorne, E.
Gisborough, L.	Sudeley, L.
Gridley, L.	Swansea, L.
Hailsham of	Swinfen, L.
Saint Marylebone, L.	Terrington, L.
Halsbury, E.	Tranmire, L.
Harmar-Nicholls, L.	Trumpington, B.
Harvington, L.	Ullswater, V.
Henley, L.	Vaux of Harrowden, L.
Hesketh, L.	Westbury, L.
Hives, L.	Whitelaw, V.
Holderness, L.	Wise, L.
Jenkin of Roding, L.	Wynford, L.
Johnston of Rockport, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.59 p.m.

Baroness Blatch moved Amendment No. 59: Page 32, line 38, leave out ("or") and insert ("and").

The noble Baroness said: My Lords, Amendments Nos. 59 and 139 need not detain us long. They simply clarify the position that, to be exempt from the requirement to set up a LAWDC, a disposal authority must cease to provide both places and plant and equipment for dealing with waste. Ceasing to provide one or the other is not sufficient.

Amendment No. 60 simplifies the procedure for authorities which do not wish to set up a LAWDC because they have already made or propose to make alternative arrangements. It has never been the Government's intention to force authorities to set up a LAWDC where, for example, they have already set up a waste disposal company. Our only concern is that any such company should be bound by the same general rules that apply to LAWDCs: that they should be run as arm's length companies and that there should be no restrictions on the sale of their securities. The amendment allows authorities to submit details of alternative arrangements that they may have made and for the Secretary of State to satisfy himself that those general rules have been adhered to, without the need for a detailed transfer scheme as the clause currently requires.

Amendment No. 138 is consequential upon Amendment No. 60. I beg to move.

On Question, amendment agreed to.

5 p.m.

Baroness Blatch moved Amendment No. 60: Page 32, line 41, leave out from ("apply") to end of line 2 on page 33 and insert ("in a case falling within paragraph (a) unless it appears to the Secretary of State that—

1. (a) the form of the company and the undertaking transferred are satisfactory; and
2. (b) the requirements of subsections (8) and (9) below are fulfilled;").

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 60A: Page 33, line 13, after ("and") insert ("where it appears to the Secretary of State that no satisfactory arrangements have been made between those persons").

The noble Lord said: My Lords, in moving Amendment No. 60A I should like to speak also to Amendment No. 61A. I shall try to resist the temptation into which I am sure that others will seek to lead me of repeating the arguments about compulsory competitive tendering contained in the 1988 and 1989 Acts.

Amendment No. 60A states that the tendering procedures for local authority waste disposal companies shall be entered into, where it appears to the Secretary of State that no satisfactory arrangements have been made between those persons". —the different authorities concerned.

Amendment No. 61A defines "satisfactory" in the following line as meaning, satisfactory by reference to the need to maintain and improve efficient waste disposal operations in any area, having regard to environmental consideration".

We have already had substantial debates about compulsory competitive tendering and that is extended by the Bill to waste disposal. Waste disposal functions will have to be put out to tender according to the terms of the Bill. If there is competitive tendering any waste disposal firm is able to compete, including a firm set up by a local authority—that is the local authority waste disposal company (LAWDC).

However, the individual authority decides who should be invited to tender. That is what happens under the Local Government Act 1988. The 1988 Act was designed to ensure that direct local government operations were exposed to competition with the private sector. It applied only where the service was carried out by the local authority. But that is not the case with waste disposal. There is no possibility of the local authority having carried out waste disposal in the same sense. The 1988 procedure is being adapted for a purely contractual situation.

It is a fundamental change in local authority contract law. It is being introduced without consultation with local authority associations either about why it should be necessary or what it means. If that principle were adopted, there is no reason why all local authority contracts should not be treated in the same way. That would mean a considerable increase in bureaucracy and administrative work.

We are therefore trying to ensure, for the last time, that the creation of LAWDCs is not the only system put forward for the operation of waste management. We are trying to avoid the situation—which goes well beyond the original compulsory competitive tendering procedures—whereby the compulsory transfer is followed by tendering from which the authority is excluded. That does not seem to us a clean break from having a local authority service and turning it into a commercial service. It is a tendering procedure in which everything is weighted against a local authority setting up a company, however efficient and well managed.

That again would lead to a worse service than would otherwise be available from a free tendering situation. It would be to the detriment of those who use waste disposal services. I beg to move.

The Earl of Arran

My Lords, Amendments Nos. 60A and 61A, in the name of the noble Lord, Lord McIntosh, would have the effect of excluding from the requirement to go out to competition any authority which had made "satisfactory" arrangements for the disposal of its waste—"satisfactory" being defined with reference to the need to maintain an efficient waste disposal service. That would prevent the introduction of competition unless the Secretary of State considered that authorities had failed to make satisfactory arrangements in their area.

We find it very hard to understand how this amendment would work in practice. It appears that the Secretary of State would be expected to examine all of the existing waste disposal arrangements to see if they were satisfactory. If he were not satisfied he would then order that competition be introduced.

The anxiety behind these amendments seems to be that existing arrangements should be protected from competition. We do not accept that view. If current arrangements are good enough they have nothing to fear from competitive tendering. To put it plainly, the best bid will win.

If noble Lords are concerned that existing arrangements offer the best environmental option but could be beaten on cost alone, I can reassure them. There is an important difference between the provisions of this Bill and those of the 1988 Local Government Act which introduced competition for some other local authority services. The Bill places an explicit duty on waste disposal authorities to have regard to environmental factors when considering tender bids. Environmental factors include the need to minimise pollution and to maximise recycling. There can therefore be no question of the Government forcing authorities to accept the lowest cost tender where there are good environmental reasons for accepting a higher one.

For those reasons I do not accept that there is any need to shelter existing arrangements from competition. The simplest way to ensure that satisfactory arrangements are made will be for authorities to subject their waste disposal activities to competitive tendering. I therefore cannot accept either of these two amendments. I urge noble Lords to reject them.

Lord McIntosh of Haringey

My Lords, I do not know whether I am supposed to thank the noble Earl for that reply. I do not believe that it was intended to be helpful. It was intended to impose a rigid procedure for compulsory competitive tendering even when the Secretary of State has an opportunity to be satisfied that the existing arrangements are satisfactory.

I readily concede that the Secretary of State could not examine every single waste disposal operation and make an individual judgment about it. But he could establish principles, as Secretaries of State have from time immemorial. They have established criteria by which it would be possible to judge whether or not an operation is satisfactory.

The amendment does not take away the power of the Secretary of State to impose a competitive tendering procedure. It simply makes it a reserve power. It avoids the necessity for quite unnecessary disruption where a system is operating satisfactorily at the moment. I believe that this is a classic example of, "If it ain't broke, don't fix it." The Government are determined to break things in order to attempt to fix them again in accordance with dogmatic principles.

I am very sad to have the Minister's reply in those terms. However I do not suppose that there is anything that we can do now to persuade either him or the House. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Lloyd of Kilgerran moved Amendment No. 61: Page 33, line 14, at end insert ("and these shall be carried out so as to ensure the adoption of the best practicable means of waste treatment and disposal.").

The noble Lord said: My Lords, in order to save time I shall speak to the other amendments grouped with Amendment No. 61; namely, Amendments Nos. 72, 96, 97, 116–119, 123 and 124. They relate to the developments in the increasingly important area of waste disposal and management which cannot be emphasised too often.

As I have already told the House, Professor Isaac, who is associated with Newcastle University and the large Scottish firm of Motherwell Bridge Holdings which has a large waste disposal department, has prepared my notes in relation to all these amendments. He was summoned to see the Minister of State during the Recess and had the presence of mind to send a copy of the notes to him. I see that the noble Baroness, Lady Blatch, is nodding her head. As the Minister has that crib, perhaps I may read the notes.

Amendments Nos. 61 and 72 contain the same words. They draw attention to the fact that our necessary long-term improvements in waste disposal practice cannot be emphasised too often. Although it looks like gilding the lily it is worth putting that on the record.

There are two amendments to Clause 49. Subsection (3) sets out many integers which should be included in the plans of a regulation authority as regards waste disposal. Amendment No. 96 draws attention to the fact that in drawing up a waste disposal plan not only are immediate cost factors to be considered but so must long-term damages which might arise from the way in which the waste is disposed. Amendment No. 97 relates to subsection (4). It is intended to draw attention to the fact that several waste treatment methods are now readily available for reducing the volume of the waste finally to be deposited on the land.

Amendments Nos. 116 and 117 are directed to the operations adumbrated under Clauses 54 and 55. Their object is to draw attention to an operation known as "composting". That method of dealing with waste disposal is common in the United States and in several EC countries. It is a means of extracting from the waste material, a large percentage of which is usually organic, the solid pieces of glass, plastic and metal in order that the remaining organic material can be treated and used for agricultural purposes. I am advised by Professor Isaac that the method of composting has the additional advantage of replacing the present use of peat as a source of humous for horticulture. For obvious reasons the use of peat is under considerable attack by environmentalists.

Amendment No. 118 and 119 relate to Clause 60 which deals with closed landfills. One expects landfills to be in the land but I understand that particularly in America some wastes are put on the land in order to alter its contour. It would be prudent to include these amendments in case that practice develops in this country and more waste is put on the land instead of in the land. I understand from Professor Isaac that the practice is not prevalent in this country but it is carried out in several Western European countries. As we try to conform with EC practices perhaps the Government will agree with the amendments.

Amendment No. 123 relates to Clause 66 which deals with the annual reports that should be issued. I need not go into the details of who issues them or how they are issued. The amendment is intended to draw attention to the developments made in this field in EC countries. I suggest that in drawing up annual reports the regulation authorities should make mention of comparisons of waste treatment and disposal practices in their areas and those of other EC countries. The Government may consider that it is asking too much of a waste regulation authority to carry out such researches. However, according to my advice it may encourage waste inspectors to look closely at developments in EC countries.

Amendment No. 124 relates to training. It introduces into Clause 67 the provision that: The Secretary of State may by regulation specify the education, training and practical experience required for `suitable qualifications' under subsections (2) and (3) above". At this stage I must thank the noble Baroness, Lady Blatch, for providing me so promptly with a copy of the press release issued today by her department. The training of people dealing with waste disposal is of great importance. Professor Isaac was summoned to see Mr. Trippier, the Minister of State for the Environment and Countryside. He was asked to prepare notes and plans of an educational kind which will help the Minister in regard to the regulations. Therefore, perhaps the amendment can be accepted even though not in its present form. I hope that the Minister will be sympathetic and I beg to move.

Lord Jenkin of Roding

My Lords, I listened to the noble Lord, Lord Lloyd, with great interest. He explained that Amendments Nos. 61 and 72 seek to import into the Bill the phrase "the best practicable means". Is that phrase intended to be synonymous with BATNEEC; that is the best available techniques not entailing excessive cost? It seems to me that what may be practicable may at the same time be quite unreasonable from the point of view of expense. Perhaps the noble Lord will clarify what his amendments are intended to convey in that respect.

Lord Lloyd of Kilgerran

My Lords, I must apologise to the noble Lord, Lord Jenkin of Roding, in this matter because at the time that he was introducing his point a distinguished member of the Opposition Bench was telling me something that I had omitted. Therefore,I am extremely sorry to say that I did not gather the point of the noble Lord's question.

Lord Jenkin of Roding

My Lords, I hope that the House will bear with me because I believe that this is an important point which may cause some anxiety. Amendments Nos. 61 and 72 use the phrase "the best practicable means" of waste treatment and disposal. In the past there have been arguments about BPEO (best practicable environmental option) as opposed to BTEO (best technical environmental option). On the whole that has given way to a concept which has been referred to at length throughout the Bill; namely, BATNEEC (best available technique not entailing excessive cost). When the noble Lord uses the phrase "best practicable means", is that synonymous with BATNEEC? If so, why does he not say that? If it does not mean that, what does it mean?

Lord Lloyd of Kilgerran

My Lords, I am grateful to the noble Lord for his courtesy in repeating his question. I agree with what the noble Lord says but I believe that the word "practicable" covers a number of integers and would cover the question of cost. Therefore, it will be in the discretion of the authority, having regard to the cost, to decide whether it is "practicable" in the circumstances of that particular case.

Lord Reay

My Lords, I am grateful to the noble Lord, Lord Lloyd of Kilgerran, for giving very clear descriptions of the arguments for each of his amendments despite the fact that in the department we have had the advantage of being aware of Professor Isaac's arguments.

Amendments Nos. 61 and 72 seek to introduce the concept of best practicable means to waste management. The concept of best practicable means is of course integral to Part III of the Bill. It has a specific legal meaning built up over many years. This meaning does not sit easily with Part II of the Bill. The foundations of Parts I and III on the one hand and Part II on the other are very different and spring from different histories. At the risk of over-simplification the differences can be summed up in the following way; Parts I and III rely upon the concept of best practicable means to minimize pollution, Part II relies upon licences with specific conditions aimed at preventing pollution. This difference of approach reflects the different types of pollution being tackled by Parts I and III and Part II and the histories of the separate control regimes. For these reasons I am not able to accept these amendments to Part II of the Bill.

Amendment No. 96 is intended to ensure that long-term environmental damage is considered in waste disposal plans. This is an intention that I sympathize with, but I hope I can reassure the noble Lord that this amendment is unnecessary. The consideration of long-term environmental damage should of course be a prime concern of regulation authorities. The Government expect that as a matter of course consideration of long-term environmental damage would figure in waste disposal plans. Indeed Clause 49(1) (a) refers to arrangements designed to minimise or prevent pollution of the environment. This of course includes short-term, mid-term and long-term environmental damage. I trust that the noble Lord will accept that his concern will be covered.

Amendment No. 97 seeks to add a requirement that disposal plans include information about treatment methods for the reduction of waste. Once again I commend the noble Lord's intention but I can assure him that Clause 49 (3) (d) already deals with such treatment methods. Indeed Clause 49 (3) (d) requires that plans include details of: …the methods and the respective priorities for the methods by which in the opinion of the authority controlled waste in its area should be disposed of or treated during that period". This covers all methods of treatment or disposal. I trust therefore that the noble Lord will be satisfied that his intention has been met and will not press his amendment.

Amendments Nos 116 and 117, which are intended to draw attention to the method known as "composting" would introduce a direct reference to the process of "composting" waste as a means of recycling it. This is already covered in Clause 29 which provides a definition of waste treatment which includes any process to make it reusable and also a regulation-making power to make specific which processes are to be included in this definition. Indeed composting is already specifically mentioned in the equivalent regulations under the Control of Pollution Act 1974, (Collection and Disposal of Waste Regulations 1988, Schedule 5).

Whatever are the merits of it—and the noble Lord made a very good case for it—we believe that it would be invidious to pick out composting from other alternatives. In our view, to list them all would be to go to an unnecessary level of detail.

Amendments Nos. 118 and 119 are drafting amendments which seek to make it clear that local authorities' responsibility extends to closed landfill sites where waste is deposited on the surface as well as in the land. I can assure the noble Lord that these amendments are not necessary. The provisions of Clause 60 apply equally to landfill, surface deposit or landraising sites without the need to add the words "and on". In other words, the kind of case which the noble Lord outlined is already covered by the provisions of the Bill.

Amendment No. 123 would add that each regulation authority's annual report should include a comparison of the disposal methods in its area with those in the rest of the European Community. The noble Lord anticipated what my argument would be. I cannot agree that it would be a good use of local authority resources to investigate European disposal methods in this way. I accept that there is merit in keeping abreast of developments elsewhere and learning from good practice although I would strongly resist any suggestion that there may be in the amendment that we in the UK lag behind the best developments in the world.

There are many different ways of treating and disposing of waste in Europe. These differences are often little to do with differences in standards, but more to do with differences in geology and history. For instance, it is not possible to landfill some wastes in the Netherlands due to a high water table, which it would be perfectly safe to landfill in most other countries. It would therefore not necessarily be fruitful to give a straight forward comparison of methods, and a comparison of methods alone would say nothing about the standards to which those methods were operated. Such a comparison might indeed be very misleading without a thorough analysis of the reasons for any differences and the standards of operation. Without such an analysis many general readers of an annual report might be misled by apparent discrepancies between the methods used for disposal in their area and those of some other part of the Community.

The proposal would also be extraordinarily resource intensive. I think it would not be an exaggeration to say that so far the European Commission has not produced a comprehensive list of all the disposal methods used in all member states, let alone the standards to which they are operating. Indeed the Commission has only recently proposed that it should bring together waste disposal plans in the Community to draw up an overview on hazardous waste disposal facilities under the revised draft of the Toxic and Dangerous Waste Directive. I believe that any research organisation would confirm that it is extremely difficult and costly to collect such information direct from the member states. I believe that it is unreasonable to expect local authorities to undertake or commission the research needed for this task. Furthermore, I believe that the end result would not provide the illumination that the noble Lord seeks through his amendment. I am sure that we wish to see the authorities devoting their scarce resources to the immediately important task of improving the regulation. I hope the noble Lord will not press the amendment.

Finally, Amendment No. 124 raises the serious subject of training and qualifications for inspectors. I am grateful to the noble Lord for his appreciation of the memorandum which he received from us.

I can assure noble Lords that the Government subscribe firmly to the view that industry is entitled to expect properly trained, qualified and experienced inspectors, especially now that we shall be requiring exactly that of waste management licence holders. Indeed, it is precisely because of our refusal to compromise on the calibre of staff that HMIP have been finding it difficult to appoint as many inspectors as they would wish. As part of their auditing role HMIP will also scrutinise the calibre of Waste Regulation Authority staff, and guidance will be issued to authorities on the type as well as the number of inspectors they should be using on regulatory duties. That advice will carry statutory force. In that way we shall achieve the objectives of the amendment but by a rather different route.

The noble Lord will probably not be entirely happy with everything I said, but I hope I have been able to allay his misgivings in some respects.

5.30 p.m.

Lord Lloyd of Kilgerran

My Lords, I am grateful to the Minister for his clear, compact and courteous approach to the 10 amendments I assembled together. I have nothing further to say this evening. I shall arrange for Professor Isaac to read the reply of the Minister and shall obtain his opinion on that reply. I again thank the Minister for the way in which he considered in detail all the amendments. I beg leave to withdraw Amendment No. 61.

Amendment, by leave, withdrawn.

[Amendment No. 61A not moved.]

Baroness Blatch moved Amendment No. 62: Page 33, line 27, leave out first ("to") and insert ("or conducive to, or calculated to facilitate,").

The noble Baroness said: My Lords, in moving Amendment No. 62 I shall speak also to Amendments Nos. 63 to 67. Amendment No. 62 is a technical drafting amendment to bring the wording of the Bill into line with other statutes where a flexible interpretation of the powers of companies under local authority control is needed. This will help make LAWDCs competitive by clarifying that they are able to carry out activities not directly connected with waste—for example, consultancies—provided that they are intended to secure the principal waste disposal objects of the company.

Amendment No. 63 is another drafting amendment. That makes clear that all disposal authorities' undertakings are covered by Clause 31; including transfer stations.

Amendment No. 64 is a minor amendment giving the Secretary of State greater flexibility when using his powers to direct authorities to set up a LAWDC. The amendment allows him to vary or revoke any directions he may have made and to issue new directions where appropriate. This flexibility is essential for cases where circumstances change after a direction has been issued. It will allow for sensible changes to be made to directions reflecting the new circumstances.

Amendment No. 65, in my name, is a rather complex looking beast which has two simple and I hope widely appreciated effects. The first effect is to treat shares in LAWDCs as fully paid up under the Companies Act 1985. If shares were not treated in this way authorities could subsequently be liable to pay the nominal value of the shares. The second effect will allow LAWDCs to claim tax allowances for their plant and equipment, just like any other waste disposal company. I trust noble Lords will agree that both of these effects serve to put LAWDCs on a level footing with the private sector waste disposal companies they will be competing with.

Amendments Nos. 66 and 67 deal with paragraph 22 of Schedule 2 which prevents authorities from restricting the sale of securities in their LAWDCs. They widen the scope of that paragraph to include any other disposal companies set up by local authorities. This would apply where an authority had set up a disposal company before being directed to form a LAWDC. These provisions do not force authorities to sell their securities; they merely prevent them from obstructing the sale of those securities; for example, by restricting the company's memorandum and articles of association. I beg to move.

Lord McIntosh of Haringey

My Lords, I accept that most of the amendments are drafting or tidying amendments. However, I am a little more concerned about Amendment No. 64. The Secretary of State already has fairly wide powers in Schedule 4 to issue, vary, revoke or substitute a direction. Amendment No. 64 proposes that he may vary or revoke a direction at any time before the vesting date, whether before or after the company has been formed.

I understood that the intention of Amendment No. 64 was to encourage LAWDCs to operate in a commercial role. After they are formed, presumably have started work on their business plan and been dealing with their finances as well as making operational decisions, for the Secretary of State then to be able to vary, revoke, substitute or issue new directions is not what one expects from a system suitable for a competitive enterprise. I am puzzled why the power should be so wide, and why it should be continued after the company has been formed.

Baroness Blatch

My Lords, with the leave of the House perhaps I may reply. I hope that the noble Lord will take on trust that there is nothing sinister in the power being given to the Secretary of State. The example I can give—whether satisfactory or not—is that where a LAWDC is formed and another is formed close by and they are not viable in the commercial sense, it allows the Secretary of State, with agreement with the LAWDCs, to vary the direction so that they may re-form as one LAWDC. Therefore the Secretary of State would have the power to vary or revoke the original direction.

On the point regarding revocation or variation before or after companies are formed, I am advised that the crucial date is when the company is vested and begins trading. It will be formed in shell form many months before. The amendment concerns the use of a variation power to ensure that when the LAWDC is formed it is a viable and commercial operation.

Lord McIntosh of Haringey

My Lords, before the Minister sits down perhaps I can say that I am grateful to her for that explanation. However phrases are being used which do not appear in the amendment. A perfectly unexceptional example was given of two LAWDCs wishing to combine. The Minister said "with the consent of the LAWDCs". The amendment does not say that. The powers in Amendment No. 64 are much wider. They can be used whether or not the LAWDCs agree. I do not think that the Minister's gloss, using the words, "with the consent of the LAWDCs", is borne out by the terms of the amendment.

Regarding the use of the power before the vesting date and the date of formation of the company, of course there are occasions when a shell company may be formed. However a great number of commercial decisions may take place before the formal vesting date. It is difficult to see how those decisions could be taken coherently if the Secretary of State, without any restriction, has power to vary, revoke or suspend a direction after the company has been formed. I do not find the answer wholly satisfactory.

Baroness Blatch

My Lords, again with the leave of the House, perhaps I can come back to that example. Perhaps the phrase, "with the permission of the LAWDC", was not the best one to use. I withdraw that phrase from my explanation. Nevertheless the important point is that when these companies are set up they should be viable and commercial. The amendment allows the Secretary of State to vary his direction in the formulation of the LAWDC.

I withdraw my comment, "with the consent of the LAWDC". I am advised it will not be with their consent. In all cases the LAWDCs will be formed as shell companies first and then the transfer scheme will be submitted. The power of the Secretary of State is to make variations in that direction to ensure that at the end of the day the LAWDC formed is a viable entity.

Lord McIntosh of Haringey

My Lords, I am sorry to rise again at Report stage, but the matter is becoming less clear and not more clear. The Minister is now saying that there is an opportunity to change a direction after a scheme has been put forward by a shell company and before vesting date. The amendment would be much more reasonable if it said that. It does not say that. It says that the Secretary of State can revoke, suspend, amend or substitute the direction at any time for any reason, not in response to a transfer scheme put forward.

Baroness Blatch

My Lords, again with the leave of the House—this is an important point—I gave that example as the kind of situation when the Secretary of State may require the power. There may be other examples that we have not considered at this stage. To write that one example on the face of the Bill would not be appropriate. It is important that the Secretary of State achieves the objective that the LAWDCs formed are formed as viable entities.

On Question, amendment agreed to.

Baroness Blatch moved Amendment No. 63: Page 33, line 44, after ("disposal") insert (", keeping").

The noble Baroness said: My Lords, I beg to move Amendment No. 63 together with Amendments Nos. 64 to 67 en bloc.

Lord McIntosh of Haringey

No, my Lords.

On Question, amendment agreed to.

Schedule 2 [Waste Disposal Authorities and Companies]:

Baroness Blatch moved Amendment No. 64: Page 153, line 46, leave out from ("may") to end of line 47 and insert ("exercise his powers to vary or revoke a direction and give a further direction at any time before the vesting date, whether before or after a company has been formed in accordance with the direction or previous direction, as the case may be.").

The Deputy Speaker (Lord Murton of Lindisfarne)

My Lords, the Question is that the amendment be agreed to. As many as are of that opinion will say "Content"; to the contrary "Not-Content".

Noble Lords

Content.

Noble Lords

Not-Content.

Amendment agreed to.

Baroness Blatch moved Amendment No. 65: Page 156, line 26, at end insert: