Disposal taxes
46. Our witnesses welcomed the increase in the landfill
tax announced in the Pre-Budget Report of November 2002, but many
would have liked the tax to be raised faster because they believe
that £35 per tonne is the minimum rate required to change
waste management choices. The Minister said that the tax would
not be high enough to meet the first deadlines of the Landfill
Directive, but that other important drivers, such as the Waste
and Emissions Trading Bill would be in place in time. We welcome
the increase in the landfill tax and recognise the need for waste
producers and local authorities to have adequate time to prepare
for it, but we urge the Government to raise it more rapidly than
the minimum £3 per year outlined in the Pre-Budget Report.
We are persuaded that the tax will have little influence until
it reaches a rate of £35 per tonne.
47. The Danish model, whereby waste management options
are subject to a differentiated tax according to their environmental
impact, has been very successful in diverting waste to their Government's
preferred management techniques. Landfill attracts the highest
rate of tax; in addition, many types of waste are banned from
landfill. Incineration attracts a lower rate, and recycling and
composting are zero-rated. In the past, incinerators that generated
both heat and power attracted a lower rate than ones that generated
heat alone, which in turn were subject to less tax than incinerators
which recovered no value from the waste at all. All municipal
waste incinerators in Denmark are now required to provide both
heat and power.
48. Several of our witnesses were in favour of replicating
such a graduated disposal tax here.[55]
However the ESA and INCPEN took the view that, although not opposed
to an incineration tax in principle, there was still a need to
expand incineration capacity in England in order to meet landfill
diversion targets and a tax would be counter-productive at this
stage. The Government has commissioned a review of the environmental
and health effects of all waste management options and said that
it will consider the case for an incineration tax in the light
of the findings of that review and in consultation with stakeholders.[56]
49. The current economic and fiscal regime has failed
to promote sustainable waste management. We are therefore sympathetic
to calls for graduated disposal tax. It is not, however, the only
way in which the Government can influence the attractiveness of
different ways of dealing with waste. For example, Eunomia Consulting
criticised the fact that energy from waste plants receive support
under the Renewables Obligation.[57]
The Centre for Business Relationships, Accountability, Sustainability
and Society recommended that the Government withdraw the current
exemption from the Climate Change Levy for power produced by incineration
of mixed wastes.[58]
We recommend that the Government ensure that all economic instruments
- both taxes and subsidies - are used in such a way that
they reflect the position of each waste management option in the
waste hierarchy.
50. The Government does not support "any significant
expansion of incineration"[59]
and has said that it is "not providing any incentives for
incineration […] we are clear about the waste hierarchy and
incineration is just above landfill."[60]
Its policy on municipal waste incinerators or other energy from
waste facilities is that "they should be considered only
where it can be shown that they are appropriately sized so that
they would not 'crowd out' recycling."[61]
51. It seems, then, that the Government's position
on incineration is based upon incineration's low ranking in the
waste hierarchy and the possibility that it can pose a threat
to recycling. Public opposition, on the other hand, centres largely
on the belief that incinerators pose a threat to human health.
The Government does not "rule out the possibility that it
[incineration] may be necessary in some cases".[62]
The Government should publish a report on the use of incineration
techniques setting out the case both for and against this type
of waste disposal. It should also make its own position clear
on incineration addressing particularly the health and environmental
implications of this type of disposal.
52. We welcome the Government's decision to commission
a survey of the environmental and health effects of all waste
management options but are worried that a simple review of material
already in the public domain will do little to influence what
are often entrenched views. Where there is still significant scientific
doubt about the impacts of different methods of waste management,
the Government should commission new research into those impacts.
53. We accept that well managed, well regulated
waste management facilities that operate to the best available
techniques pose a minimal threat to public health. However, we
are concerned that the Environment Agency does not have the capacity
to regulate effectively, particularly in the face of the increasing
demands on it. Unless the public and the waste management industry
can be assured that all facilities are stringently regulated and
operate to the best of international standards, public confidence
in the safety of such facilities and industry's willingness to
invest in the best available equipment will both be compromised.
Household charging
54. Householders pay for the collection and management
of their waste through their council tax. The cost of waste management
is not differentiated from the costs of the other services their
council provides, and few people know how much of their council
tax is spent on waste. In addition, the cost to the householder
is the same no matter how much waste they throw away or recycle,
so there is little incentive for individuals to try to reduce
the amount of waste they produce.
55. Consumers need to be made aware of waste as an
important environmental issue. At the moment it is easy for them
to ignore the problem. Waste minimisation, producer responsibility,
and the 'polluter pays' principle are all at the heart of a sustainable
waste management policy and there is no reason why the householder
should be exempt.
56. We agree with the Local Government Association
that variable charging for household waste collection should not
be regarded as an additional source of revenue for local authorities
but primarily as a means of changing householders' behaviour.
We understand their concern that, in some areas, introducing direct
charges could result in fly-tipping. It should therefore be for
the council concerned to decide what type of incentives or disincentives
are most appropriate for each area.
57. There is also concern that variable charging
for waste collection can be regressive. Variable charging is only
fair if people have a means of controlling the amount of waste
they dispose of and this means that good recycling services must
be in place. It is clear that new waste initiatives need to be
accompanied by good public awareness and education campaigns.
58. We regret that the Government has not yet decided
whether to allow local authorities to introduce household incentive
schemes.[63]
There is already a body of evidence available to draw on[64]
and local authorities themselves are best placed to judge what
is suitable for their area. Therefore, we recommend that the Government
complete its deliberations about local authority household incentive
schemes as soon as practicable and certainly by the time of the
next Pre-Budget Report. We are strongly in favour of local authorities
being given the ability to introduce incentive schemes if they
so wish.
54 HM Treasury,
2002, Tax and the Environment: using economic instruments,
para 1.2. Back
55 See, for
example, Q 208, Ev 246, para 3.2, Ev 3, para 18, Ev 263. Back
56 Defra, May
2003, Government response to Strategy Unit report 'Waste not,
want not', p. 12. Back
57 Ev 237, para
45. Back
58 Ev 263. Back
59 HC Deb, 6
March 2003, col 945 [Commons Chamber]. Back
60 HC Deb, 20
Mar 2003, col 1130 [Commons Chamber]. Back
61 HC Deb, 8
Apr 2003, col 137W [Commons written answer]. Back
62 HC Deb, 6
March 2003, col 945 [Commons Chamber]. Back
63 Budget
2003, HC (2002-03) 500, para 7.54. Back
64 Eunomia Research
and Consulting, Waste Collection: to charge or not to charge.
Final Report to the Chartered Institute of Wastes Management Environmental
Body, 2003 and Strategy Unit, 2002, Waste Not, Want Not. Back
