MPs call for steep rise in Landfill Tax ahead of Budget (19.03.2007)
A committee of MPs demanded a steeper yearly increase in the Landfill Tax today, ahead of Wednesday's Budget, in a report criticising Chancellor Gordon Brown's environmental tax regime.
Reporting on an inquiry into last year's Pre-Budget announcements from the Treasury, Parliament's Environmental Audit Committee said the tax on waste going to landfill should be "increased, steeply, to the level at which it imposes an effective driver against landfill use in its own right".
The cross-party committee welcomed the drop in landfill claimed by the Treasury to have resulted from the current £3 per tonne increase in the Landfill Tax, which this year has stood at £21 per tonne and is to rise to £24 per tonne next month.
However, the MPs expressed doubt as to whether the Landfill Tax itself had driven that diversion of material away from landfill, rather than other factors, "not least grants to local authorities to pay for household recycling boxes".
The committee, which is chaired by Tory back-bencher Tim Yeo, called for the Treasury to publish analysis that clearly demonstrated the impact of the Landfill Tax separately from other drivers for landfill diversion.
IncinerationIn a report that also looked into the Stern Review on the economics of climate change, the Environmental Audit Committee also picked up on evidence from environmental think tank the Green Alliance that the government should consult on a possible incineration tax.
The think tank had told the committee that an incineration tax could promote greater recycling, "rather than see an unthinking growth in incinerators simply as a default alternative to landfill".
Commenting on the evidence, MPs stated: "We are sympathetic to the idea of a broader use of Landfill Tax, or other financial instruments, to guide the development of waste disposal, in particular to incentivise the organisation of waste so as to maximise the material which is recycled, and maximise the energy that can be gained from the rest while minimising the resulting emissions. As a first step, the Treasury should consult on the introduction of an Incineration Tax."
In a further issue examined by the committee, the MPs said it was "not especially convinced" by explanations from the Treasury as to why taxes on environmentally "inefficient" products had not been adopted.
The inquiry into the issue of levies on certain products had looked on the Irish plastic bag tax, Australia's tax on incandescent lightbulbs and other suggestions including disposable razors.
Despite evidence from the Treasury that the plastic bag levy had brought an increase in the use of bin liners, and anecdotal evidence of an increase in shoplifting since shops have less idea which products had been paid for, the MPs decided more consideration of such taxes should come from the Treasury.
"There would be a double purpose to such taxes," the MPs said, "not only would they disincentivise the use of such products in themselves in favour of more efficient alternatives, but they would help to raise awareness generally as to the desirability to shift whole arrays of purchasing decisions and other daily habits in an environmentally friendly direction.
"Such taxes would surely not harm the economy or provoke great popular opposition. In cases such as this, the onus should be on the Treasury to provide a convincing reason why not to introduce such taxes," the committee added.
Lib DemsCommenting on today's report, ahead of the Budget on Wednesday, Liberal Democrat environment spokesman Chris Huhne MP said: "Green taxes have been falling steadily as a percentage of our national income, meaning the Government has failed to use a key lever to tackle climate change.
"When the Chancellor has modestly raised green taxes he has given them a bad name by failing to guarantee that the revenue will be handed back in tax cuts elsewhere.
"The Chancellor has another opportunity to rise to the occasion on Wednesday, but unfortunately his track record shows that he is brown not green," Mr Huhne added.