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Madam Deputy Speaker (Dame Janet Fookes): With this, it will be convenient to discuss the following: Government new clause 6--Mining and quarrying.
Government new clause 7--Pet cemeteries.
Government new clause 8--Exemptions: power to vary.
Government amendment No. 12.
Amendment No. 70, in clause 59, page 40, line 34, at end insert--
Government amendment No. 13.
Mr. Heathcoat-Amory:
The House will recall from debates at earlier stages of the Bill that we are introducing a landfill tax, which will come into effect on 1 October. It aims to reduce our reliance on landfill, and will promote more sustainable waste disposal practices, especially by encouraging the reuse and recycling of material--and, indeed, waste reduction. It will also ensure that waste disposal costs reflect the full environmental impact of landfill.
The revenue from the new tax will be used to make a further cut in employers' national insurance contributions, which have already fallen from 13.5 per cent. in 1979 to 10.2 per cent. now. A further cut costing about £0.5 billion will be made in April next year, also funded by revenue from the landfill tax.
It is worth recalling that the total reduction in national insurance contributions since 1979 is now worth about £7.85 billion a year. That represents a direct relief on employment costs, and it partly explains why our employment record is better than those of most of our European competitors.
New clause 5 and its associated amendments and other new clauses arise from discussions that we had in Standing Committee, and with the trade, with other
interested potential taxpayers and other groups. Their effect is to exempt dredgings and waste from mining and quarrying operations, and to introduce a power to vary the scope of the exemptions by Treasury order. We specifically intend to use that power to exempt historically contaminated land from the tax.
I mentioned dredgings, and shall say a little more about that subject, because it interested the House and the Committee in earlier debates. New clause 5 provides that a disposal is not taxable if the material being disposed of consists entirely of material dredged from
a harbour or suchlike. Most dredgings would not fall to be taxed in any case, because the material is often disposed of at sea or on land, rather than in a landfill site. But some material is disposed of in licensed landfill sites, and so would otherwise fall to be taxed.
We are exempting such material because the waste is naturally occurring, and exists to be dredged only because of the operation of natural forces. Moreover, dredging has a beneficial effect on navigation and in preventing flooding. It produces a relatively easily definable category of waste, and I am therefore happy to confirm the exemption by introducing the new clause to give it practical effect.
New clause 6 exempts waste from mines and quarries. It was never our intention to tax such waste unless it was disposed of in licensed landfill sites, but it became apparent following discussions with the industry that quite a tonnage of such waste is disposed of in licensed sites and would therefore be taxed. The exemption will apply to all naturally occurring waste arising from mining and quarrying operations. The exemption will not apply where waste arises from a process separate from mining or quarrying operations, or if it arises from a process that permanently alters the waste's chemical characteristics.
The next major category that I want to mention is contaminated land. Customs and Excise has consulted widely on the matter with the agencies involved in clearing up contaminated land. A consultation exercise took place on a draft clause that tried to define a category of contaminated land, linking it to the necessary planning approval, to provide an objective criterion for the eligibility for exemption. But it became clear that too many clearance projects do not require planning permission, and we have decided instead upon a different approach. The exemption will apply to waste from the clearance of contaminated land where the clearance of all or part of the contamination is necessary to allow the land to be used for the intended purpose when the development is complete. The exemption will apply to waste arising from the reclamation of the land, but current polluters will not be able to benefit from it.
That will be done by a system of certification by customs, and we want to consult further on the details. That means that the details of the exemption cannot be brought forward by primary legislation. New clause 8 enables the Treasury to make orders to add to, delete or vary the definition of waste exempt from the tax. We intend to use the order-making power because it may be necessary from time to time to alter the exemptions--particularly at the margins--in the light of technical or other developments, or to iron out difficulties that may
arise during the operation of the tax. But it will be used specifically to bring in an exemption for historically contaminated land, and a draft of the order to do that will be ready early next month. Subject to the views expressed, we hope to be able to lay the order in June--well before 1 October, the date on which the tax comes into effect.
Ms Primarolo:
I should like the Paymaster General to clarify a number of issues with regard to the new clauses. I am grateful to him for his explanation of the new clauses, which arise from our debates in Committee.
I should like the right hon. Gentleman to explain the use and meaning of the word "watercourse" in new clause 5(2)(a). Chambers dictionary defines a watercourse as
That would seem to exclude lakes, ponds and reservoirs, for instance. Is that the Government's intention? If so, what is their justification for doing so?
With regard to the exemption powers in new clause 8 and the development of historically contaminated land, we discussed in Committee contaminated land in inner cities, which might be developed for housing projects--a burden would be placed on the developers prior to the development. I understand the difficulties in refining a definition to deal with that issue, but there are a number of related problems. I shall put them before the House, bearing in mind the fact that the Paymaster General said that there would be further consultation on the details of the way in which the exemptions would work. The powers seem very wide at the moment, but if I heard the right hon. Gentleman correctly, he said that the exemptions could vary at the margins according to the development of technologies. If I misheard him, I apologise.
The Environmental Industries Commission, in its representations on the new clause--I presume that it has made the same representations to the Paymaster General--made a series of important points that we need to consider. One was that, if we move the contamination from the historically contaminated land into landfill, we shall not be dealing with the contamination, but simply moving it. The EIC points out that companies are emerging in the United Kingdom which offer on-site remediation technologies and that, as was said in the introduction to the new clauses, the point of the landfill tax is to encourage waste reduction and recycling. The tax is supposed to shape the behaviour of others.
Contaminated land is a substantial problem in Britain, as well as throughout Europe, particularly as most of it is in inner cities and, while it is not dealt with, pressure will continue to be put on green-field sites and sites elsewhere. It is estimated that there are about 50,000 to 100,000 contaminated sites in the United Kingdom alone. I am keen to ensure, as I am convinced that the Paymaster General will be, that we do not undermine the development of the industries that deal with the remediation of contaminated land in what is a very volatile market in the United
Kingdom, by giving developers a route to avoid dealing with the contamination on site and simply allowing free tipping on landfill sites.
Clearly, to encourage those environmental technologies to develop is crucial. Indeed, the Government recognise that, because the Department of the Environment has been encouraging the use of advanced remediation techniques in place of landfill, and Government initiatives, such as the Biotechnology Means Business programme, have been trying to do exactly that. If the House gives too wide a power on exempting historically contaminated land, it will be in danger of running counter to those objectives, and I am sure that that is not the intention.
The royal commission on environmental pollution and the Office of Science and Technology have recognised that greater emphasis should be placed on the commercial application of environmentally friendly technologies that can deal with contaminated sites. We are discussing historically contaminated sites only. The royal commission's call for urgent action to decontaminate urban sites could be undermined by proposals that are too widely drawn.
'(9) Subsection (1)(b) above shall not apply where the material is deposited in an underground cavity created by the controlled solution mining of salt and the material arises from the processing of naturally occurring minerals to remove their naturally occurring impurities and the deposit of the material in such underground cavity will not give rise to environmental pollution and, due to the natural source of such material, there is no scope to reduce the quantity of such material and there is no more environmentally benign way of dealing with the material.'.
"a river, canal or watercourse",
"a channel through which water flows or has flowed".
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