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Mr. Paddy Tipping (Sherwood): I welcomed the landfill tax when it was announced in the Budget and I followed its progress in Standing Committee. I still welcome it, although the more I examine it the more difficult the subject becomes. I am particularly pleased by new clause 6 as it affects the deep coal industry. I had never thought that that industry would be affected by the landfill tax, but I am pleased that the new clause clarifies the matter.
I should like to pursue the Minister a little further on the consequences of the tax for the coal industry. Will materials brought in for engineering work be exempt from the landfill tax? I offer the Minister two examples. During construction of a colliery slag heap, the base is lined with clay to prevent water from permeating it. That clearly involves bringing waste on to the site, but it is designed to stop other waste from polluting the water.
Secondly, capping a colliery tipping site with soil needs to be done to enable tree planting to take place. I am keen that that, too, should be exempt from the landfill tax.
It also seems clear to me that if coal is brought out of the mine and then washed, that is part of the coal mining process, so the resulting waste should not be liable to the landfill tax. Sometimes coal is transported away from the colliery to another site for washing; does it matter whether the process takes place on the same site?
I may be pushing my luck a little, but it would be helpful to the coal industry to have these answers. It would also help the industry if fly-ash were exempt from the tax. I assume that subsection (5)--
excludes fly-ash, but I use it as a device to ask the Minister about what category fly-ash will come under--the higher rate, or the lower rate for inactive and inert waste. The coal industry faces many challenges at the moment, and I know that the Revenue is consulting on this. I, for one, am very anxious that the industry should survive.
Mr. Heathcoat-Amory:
I am grateful to the House for the general welcome for the tax. I think that it is seen as an advance in environmental terms, and that it will raise a useful sum that will be applied to relieve the burden of employment taxation.
On the specific questions, the hon. Member for Bristol, South (Ms Primarolo) asked about dredging and whether material reclaimed or taken out of ponds and lakes will be exempt. The answer is no. The dredging exemption is designed for the removal of material that has entered harbours and waterways through natural forces. It is also designed to keep those harbours and waterways clear for navigation purposes and to prevent flooding. That is not the case for material removed from stagnant ponds and lakes. I remind her that, if such material is disposed of other than to a licensed landfill site, it will not be taxed anyway.
Ms Primarolo:
What about material removed from reservoirs that do not have a throughput of moving water?
Mr. Heathcoat-Amory:
Unless a reservoir is a waterway used for traffic, and therefore might qualify as a type of canal, I do not envisage that it will be exempt.
Mr. Home Robertson:
I do not think that the Minister quite understands what a reservoir is. A body of water is not a reservoir unless water flows through it. The whole purpose of a reservoir is for water to go in at one end and to be taken out at the other, and if in the process silt gets into the bottom of the reservoir, presumably it is reasonable to allow the operator to remove it without being taxed.
Mr. Heathcoat-Amory:
Nor do many canals have water flowing through them. They are not rivers; some canals are virtually stagnant, yet they take traffic and therefore have to be kept clear for navigation purposes. I can envisage, if I stretch the definition to its extreme, a type of reservoir that might also be used to take commercial traffic and might therefore form a type of canal. That might fall to be exempted from the tax. In general terms, I feel that reservoirs will not fall within the exemption and therefore material removed from them will fall to be taxed.
Mrs. Helen Jackson:
Surely, as we in Yorkshire know, the whole point about reservoirs is that if they are allowed to silt up, the supply and resources can be threatened. That issue has been raised not once but many times by the people of Yorkshire in the past six months, because silting up may have contributed to the problems last year. I should be grateful if the Minister would agree to examine the implications of that.
Mr. Heathcoat-Amory:
I do not want to get into the problems of Yorkshire Water during the debate. The problem there is too little water rather than too much silt. I would rather re-emphasise the point that the order-making power is partly designed to deal with possible future definitional problems, where the House may decide to move the borderline between exempt and non-exempt material, which neatly makes the point for the new clause, which introduces such a provision.
The hon. Member for Bristol, South wants to ensure that the contaminated waste provision is not abused and that it should not be used in cases where there is a perfectly good alternative. The point is that clearing up historically contaminated land is currently extremely expensive, and it would act as a deterrent if such material were to bear tax at £7 a tonne. It would give every incentive to the development of green-field sites rather than the contaminated brown-field sites, where we wish to see development taking place in some cases.
Of course, there are other ways to deal with contamination. Soil can be washed. I have even heard that microbes can be employed to chew up the offending contamination, but all this technology is in its infancy and at present is a good deal more expensive than existing methods. If the balance were to shift, we would need to consider whether it would be appropriate to continue to exempt contaminated sites.
I am grateful for the remarks of my hon. Friend the Member for Beaconsfield (Mr. Smith) about the way in which we have tried to introduce this tax through listening
to representations that have been made. Indeed, we have gone a long way towards meeting some of the objections where they are well founded. He mentioned the salt mining industry. I can confirm that material put back into salt cavities will not be exempt, because it has been altered chemically. In other words, what is taken out of the salt cavities is different from what is being put back in. We have, however, met some of the industry's concerns by bringing within the definition of the lower rate these deposited materials, which will be taxed at £2 a tonne rather than the original £7 a tonne. In addition, we shall make an allowance for the water contained in the brine material that is pumped back into the excavated cavities.
The hon. Member for Sheffield, Hillsborough (Mrs. Jackson) asked me about the different classifications of waste between the upper and the lower rate. In answer to a written question, I announced the categories that fall within the lower rate, but before that is taken forward into secondary legislation we are open to further representations.
The hon. Member for Hillsborough asked about weighbridges. It is not our intention to insist that all landfill sites be equipped with a weighbridge. Many of them are, but where there is no such facility for weighing material, for environmental control purposes the quantity of waste has to be assessed. When that is done to the satisfaction of Customs and Excise without a weighbridge, we shall use that as a basis for taxation. It is important when we introduce a new tax that we do not unnecessarily burden small operators with capital expenditure that they might not be in a position to meet. It is not a requirement that there should be a weighbridge at smaller sites.
The hon. Member for Hillsborough also asked about opencast mining. No special privileges will apply. The planning process must take care of the question whether opencast mining can take place, and spoil and waste from that operation will be exempted in exactly the same way as they are from deep mining. She also made a point about being restrictive about the definition of historically contaminated waste. I have dealt with that point.
My hon. Friend the Member for Beaconsfield also asked me two questions about mining waste. I can answer both of them positively. Material that is normally processed or separated from quarried or mined material will not be taxed. Similarly, it does not matter whether that process takes place at the quarry or whether it is geographically separate.
The right hon. Member for Lagan Valley(Sir J. Molyneaux) asked about the need for consultation, particularly with district councils. Talking to representatives and officers from local authorities is very much part of our consultation exercise, and we shall continue to engage in such consultation.
"a process forming part of those operations and permanently altering the material's chemical composition"--
5.30 pm
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