Brown announces Landfill Tax rise to boost recycling (21.03.2007)
The Landfill Tax is to rise by £8 per tonne each year from April 2008, until "at least 2010/11", Chancellor Gordon Brown announced today.
The rise in the annual increase in the Tax on active waste going to landfill – which currently stands at £21 per tonne and will rise to £24 per tonne next month – would see a level of £48 per tonne reached in the 2010/11 financial year.
The lower rate of £2 per tonne for inactive waste going to landfill will rise to £2.50 from April 2008, while the Aggregates Levy on the extraction of virgin aggregates will rise to £1.95 per tonne.
Since 1997, the Landfill Tax has seen the quantities of waste sent to registered landfills falling from 96 million tonnes to around 72 million tonnes in 2005/06, the Budget report stated.
But the report warned that although the UK is "on track" to meet its waste diversion targets under the Landfill Directive, "subsequent targets in 2013 and 2020 remain challenging".
Today's increase in the Landfill Tax appeared to be a response to calls from environment secretary David Miliband to raise the tax swiftly.
RECYCLING
In his speech to Parliament this afternoon, Mr Brown said: "To encourage recycling and to reduce landfill, the Landfill Tax will, from April next year to 2011; rise by £8 each year, and to reduce the environmental impact of quarrying, the aggregates levy - which has been frozen since its introduction - will rise in April 2008 from £1.60 to £1.95 per tonne.
"These measures, our membership of the European emissions trading scheme and an inflation increase from next April in the climate change levy, will together each year contribute 16 million tonnes of carbon reductions," the Chancellor added.
Waste is identified in the 2007 Budget report as one of four key areas for further action to tackle long-term environmental pressures, along with climate change, water supplies and biodiversity. It said: "Municipal, commercial and industrial waste streams are expected to increase steadily, at a time when the UK is committed to reducing the volume of waste sent to landfill."
REFUSE-DERIVED FUEL
Along with the increase in Landfill Tax, today's Budget revealed that the government will review the enhanced capital allowances (ECAs) that could be available for plants that use refuse-derived fuels to generate energy.
The Treasury explained that it was aiming to encourage investment in developing markets for the outputs – including "solid refuse fuel" – from new waste management facilities.
"The government today announces that it intends to review the classes of equipment that can qualify for ECAs for good quality heat and power (CHP) to ensure that the scheme includes all necessary equipment for CHP facilities to use solid refuse fuel," it said.
BREW
Meanwhile, the Business Resource Efficiency and Waste programme run by Defra, which aims to help businesses reduce the impact of the rising Landfill Tax on their profits by reducing the amount of waste they produce, will continue into 2007/08.
The Treasury acknowledged the "good work of many of the projects funded by BREW", but said the future of the programme beyond 2007/08 was subject to the forthcoming Comprehensive Spending Review, which is currently expected to conclude in June.
Today also saw the government announcing a review on whether the existing exemption from the Landfill Tax should continue for waste arising from the development of contaminated land. The Treasury's suggestion was that money raised by the Landfill Tax on contaminated soils might be used in incentivising land remediation through tax relief.
Other measures announced included an increase in the Landfill Tax Credit Scheme - now called the Landfill Communities Fund - by £5 million to £65 million for 2007/08, and amendments to the regulations to simplify the operation of the scheme, which seeks to improve communities near landfill sites.
LYONS REPORT
Referring to today's report on local government funding from Sir Michael Lyons, the Budget stated that the issue of waste charging would not be addressed by the government until the new English waste strategy is published in May.
Sir Michael Lyons, who headed the inquiry, recommended that town halls should be allowed to introduce a variable charging system, so the weight of waste costs would be distributed fairly, with those producing more, paying more.
And he believed it was a way for councils to avoid "the swingeing fines they face, if they do not dramatically reduce their landfill waste".