Mr.
Jeremy Browne: I shall make a brief contribution in which
I will shamelessly refer to my constituency, but it is of wider
interest because Somerset has the highest rate of recycling in the
country—a fact of which we are proud, because it represents the
strong attachment that people who live in the county have to good
environmental
practice. We are keen to do better. On Friday last week, I was fortunate
enough to be accompanied by my right hon. Friend the Member for
Sheffield, Hallam (Mr. Clegg) when visiting the Priorswood
recycling centre on the edge of Taunton. He was able to see what I have
seen on many occasions since I opened it in 2005, which is the wide
range of facilities it has to process plastic, different forms of
glass, paper and metal. [Interruption.] I hear,
out of the corner of my ear, an unnecessary political intervention. It
must also be said that I noticed a very large number of Conservative
election leaflets being pulped. It did not look as though they had even
been read, which was a cause of distress to me, because I always think
that the greater the number of people who read Conservative leaflets in
my constituency, the better the Liberal Democrats will do. However,
people seem to have discarded those leaflets without even taking that
precaution.
12.15
pm
Mr.
Hands: Does the hon. Gentleman share my horror at what I
understand to be a Liberal Democrat leaflet put out in Cornwall that
attacks a Mebyon Kernow councillor for the state of his
hair?
The
Chairman: Order. I think that we are even stevens on that
point.
Mr.
Jeremy Browne: Thank you for your guidance,
Mr. Atkinson.
I was not
thinking about Cornish nationalism when I was at the Priorswood
recycling centre, because I was so full of admiration for the
facilities there. I was being shown around the facilities with the
leader of my party. Quite a few of the people who work there and who
were giving us the tour stressed the benefits, as they saw them, of the
landfill tax in terms of incentivising local authorities and other
organisations to recycle more.
We are not
resting on our laurels. Of course, we in Somerset have the very good
fortune of having a county council that is run by the Liberal
Democrats, which means that environmental consciousness is right at the
forefront of all its deliberations. We also have the good fortune of
having the Liberal Democrats as the largest party on Taunton Dean
borough council. As a resident of Taunton, I am very pleased to see the
benefits of much more recycling being done at doorstep level.
I have read a
lot in the national newspapers on the controversy about less frequent
waste collection. However, landfill taxes and other incentives that are
being put into practice by local authorities are having a dramatic
impact on levels of recycling. Certainly I hear very few complaints in
my area that the rubbish is only collected fortnightly, just as long as
there is plenty of opportunity for collection of recyclable items. For
example, newspapers and bottles are collected weekly from households in
my constituency, and now plastic items, including those big, unwieldy
milk containers that sometimes carry up to six pints and large
containers of orange squash, are being collected from doorsteps along
with cardboard. When people buy a new implement or appliance, for
example, and they do not wish to throw the cardboard box away but
regard it as unnecessarily burdensome to take it to the Priorswood
recycling centre or to the other recycling centre in my constituency,
which is in Poole,
just outside Wellington, they find it frustrating if it is not
collected. Even right down to cereal boxes, for example, people are
having the opportunity to recycle those types of daily household
items. In
conclusion, it is worth saying that it is rare indeed to find people
who are keen to speak out in favour of higher taxation, particularly
when the burden may fall on them, but what is quite interesting is that
both the population and the people who are responsible for waste
management and disposal in my constituency see the merit in having a
landfill tax incentive to increase recycling. I invite everybody on the
Committee who has not seen the future, in terms of recycling in our
country and in terms of just how progressive and enlightened that we
can be as a population, to visit Taunton Dean and Somerset, where we
are rightly proud of our good record in that regard. No doubt we will
do better still after we get beyond Thursday and we can come up with
further imaginative schemes to improve the environment in my
area.
Angela
Eagle: I think that there is now cross-party agreement
that increasing recycling, including putting in the infrastructure that
is needed to do that, and thereby landfilling less waste, is a wholly
good thing. Clearly, the landfill tax is one of the ways in which we
have begun to make real progress; it is an important part of the
Government’s efforts to reduce the amount of waste going to
landfill. There are obviously, as the hon. Member for Hammersmith and
Fulham hinted, overarching EU directives in this area, and we have
signed up to targets that we wish to reach. He is also right to say
that having a landfill tax helps to drive investment in alternative
greener technologies, which further reduce methane emissions from
landfill waste. As I am sure the Committee knows, methane is a far more
potent greenhouse gas than CO 2, and it is really important
that we reduce those
emissions. Evidence
shows, I am happy to say, that the tax has been successful in reducing
the amount of waste going to landfill. Figures show that between 1997
and 2008, the volume of waste disposed to landfill fell by 32 per
cent., delivering carbon savings of 700,000 tonnes of CO2
emissions by 2010. In Budget 2007 the Chancellor announced that the
standard rate, which applies to active waste sent to landfill, would
increase by £8 per year until 2010-11. Clause 18 gives effect to
the 2007 announcement by increasing the standard rate of landfill tax
to £48 per tonne, with effect from 1 April 2010.
The increase
is part of the Government’s effort to reduce the volume of waste
sent to landfill, and is complemented by public spending on sustainable
waste management. For example, we announced £10 million of new
grants for businesses in 2009-10 to provide capacity to divert more
than 300,000 tonnes of waste from landfill and reduce waste disposal
costs through, for example, anaerobic digestion. At the Budget this
year, we announced that the standard rate for landfill tax would
continue to increase by £8 per tonne for a further three years,
from 2011 to 2013. That is designed to encourage investment in
alternatives to landfill. We will legislate for those increases in
future Finance Bills, as we have done for all previous landfill tax
increases.
Mr.
Hands: First, I should correct something I said. I think I
said that the first £8 increase was coming in in 2009. It is
actually in 2010, followed by the three £8 increases.
Nevertheless, what consideration has been given to the fairly steep
trajectory of the increases? It is not quite a doubling, but it is an
80 per cent. rise in the next five years. Does she think that is
sustainable and that the industry can absorb
it?
Angela
Eagle: We would not have suggested it had we thought it
unsustainable. It clearly has a policy lever which, as the hon.
Gentleman himself said, is to drive investment in future waste
infrastructure and to do even better on recycling than we have done to
date. The increases will help to drive a low carbon and resource
efficient economy, which will encourage waste producers and the waste
management industry to switch away from landfill towards sustainable
alternative technologies, such as anaerobic digestion, recycling and
mechanical biological treatment.
Mr.
Hands: The hon. Lady is being very generous in giving way.
I still want to explore the rate of increase. Presumably some thinking
went into choosing £8 rather than, for the sake of argument,
£10 or £15. Presumably if the rate of landfill tax is
increased too sharply or over too sustained a period, people will avoid
it by fly-tipping. How did the Government arrive at the £8
level? Some work must have been done to discover that optimal
level.
Angela
Eagle: Of course we model the behavioural effects of tax
increases. We think the levels are sustainable. The Government
recognise that fly-tipping is a significant antisocial problem
affecting communities, landowners and regulators. We have been working
via the Department for Environment, Food and Rural Affairs with the
Environment Agency. In 2007-08, fly-tipping on public land fell by 7.5
per cent., which I hope the Committee will welcome. As well as a
decrease in fly-tipping overall, enforcement action and successful
prosecutions have increased by 26 per cent. on previous years. We are
beginning to get to a stage where we are dealing with the problem of
fly-tipping, as well as making the case, as the hon. Member for Taunton
did so eloquently, about new waste infrastructure that can help to give
us the capacity to recycle substantial amounts of
waste.
Mr.
Field: All of us feel that the landfill option is not
sustainable in the longer term, so we understand the importance of the
tax. However, I agree with my hon. Friend the Member for Hammersmith
and Fulham about the risk of fly-tipping. Presumably the figure of
£40 has not always been set in stone, so what is the evidence,
from perhaps the past five years, from the increases that have led us
to £40? Has there been any Government thinking about the plus
and minus sides of particular increases in the past and the impact that
they might have had on fly-tipping, and about other externalities that
might not have been foreseen at the
outset?
Angela
Eagle: I have just given the Committee some positive
figures about fly-tipping. In 2007-08 we saw not only a decrease in
fly-tipping, which I hope will be sustained, but a large increase in
successful prosecutions. There are also plans in place to introduce
secondary legislation in the autumn, which will provide local
authorities
and the Environment Agency with stronger powers to seize vehicles
suspected of involvement in fly-tipping. There will be a continuous
attempt to crack down on that kind of activity, recognising that if the
landfill tax continues to rise, we have to ensure that a huge increase
in fly-tipping is not an unintended consequence. The evidence that I
have just quoted gives us cause for optimism in that
respect.
Mr.
Field: One hopes that an element of that precipitative
reduction in fly-tipping is due to people who are averse to antisocial
behaviour, but there is an argument that landfill tax should have gone
up slightly more, so that more resources could go into new technology.
I am trying to get a feel for whether, over the past five years, there
has been evidence that perhaps we have not been investing enough in new
technology, because we have taken relatively small steps upwards in the
landfill tax, rather than larger steps, which might be the right way
forward.
Angela
Eagle: There is a balance to be struck, but there is also
a sequencing argument, which I am sure the hon. Gentleman accepts, in a
switch from being a country that not that long ago landfilled large
amounts of its waste to one that is driven to reach demanding EU
targets in a few years’ time. Local authorities diverting
increasing amounts of waste from landfill require a period of
adjustment, and part of that is about putting in place the
infrastructure needed to handle waste. We have announced plans to
commit more than £2 billion to investment in waste
infrastructure through the private finance initiative, and the Greater
Manchester waste disposal authority’s energy from waste product
project, which has just been given the go-ahead with extra help from
the Treasury’s finance unit, will alone handle 5 per cent. of
the UK's total municipal waste and lead to the diversion of more than
700,000 tonnes of waste from landfill. There is significant investment
in big kit, ratcheting up our efforts in this area. The increases in
the landfill tax are a balancing part of that entire
approach. The
hon. Gentleman should look at how integrated the approach is. One
cannot run before one can walk in these areas, and we need a time
sequence so that we have the infrastructure in place before we can
perhaps further increase the costs of diverting waste to landfill. The
alternatives have to be in place and up and working, so that we can
think about how we can discourage future landfilling. There is a
hierarchy of waste, and there is important work to be done in ensuring
that waste and packaging are not created in the first place, and that
when they are created, they can be disposed of in the appropriate way,
according to that
hierarchy.
Mr.
Hands: The hon. Lady mentioned modelling on landfill tax.
Could she tell us which variables are involved in the model, other than
the rate of landfill
tax? 12.30
pm
Angela
Eagle: I do not have them in front of me, and there are
many Treasury models on all those taxes. I want to reassure the hon.
Gentleman that we do not just pluck a figure out of the air and apply
it without trying to analyse what the consequences and behavioural
effects will be. I will be happy to write to him if he wants
more detail on models, but I do not have the details on the
Treasury’s landfill tax modelling in front of me at this moment,
so I cannot give the detail that he has obviously decided he wishes to
see. If he will be patient, I will be happy to write to him about
it.
Mr.
Hands: I am sorry, but it really is not on that the hon.
Lady is unable to tell us even what the variables are. I appreciate
that she is not in a position to give us the entire model, but surely
she could give us just the basic variables involved. For example, is
the level of fly-tipping and the cost of cleaning it up one of the
variables in the model? It seems to me that it should
be.
Angela
Eagle: These matters are all balanced, and it is clear
that other areas need to be thought about as well; in fact the hon.
Gentleman mentioned one of them in his original remarks when he talked
about the cost to local authorities, a point that I was going to deal
with. Obviously, the Government will take account of costs faced by
local government when determining the appropriate settlement for local
government in the next comprehensive spending review. I mentioned
earlier that we have announced an extra £10 million in capital
grants to deliver anaerobic digestion and in-vessel composting
infrastructure, which will remove over 300,000 tonnes of
biodegradable waste each year from landfill, reducing business and
local government costs and methane
emissions. The
hon. Gentleman asked about consultation and referred to the Waste
Recycling Group case. The effect of that, as he knows, was essentially
to take waste that is used on landfill sites out of tax. The change we
propose in the consultation document will bring users of waste back
into tax where those uses look like disposal and have the environmental
impact associated with disposal, and that change will also protect
revenue, which is an entirely legitimate reason for acting and changing
our approach in that area. We will have the chance to debate those
changes when we discuss clause
118.
Mr.
Hands: What impact does the hon. Lady assess there might
be on the export of waste? There have been terrible and tragic stories
in the newspapers this year about how an awful lot of waste generated
in the UK is showing up in developing countries such as Nigeria, Ghana
and Ivory Coast. Is one of the variables in her model the impact of the
export of such waste, presumably by people trying to avoid paying UK
landfill
tax?
Angela
Eagle: Other aspects of that issue are covered by other
parts of international law, not least the Basel convention on the
export of hazardous waste, to which the UK is a signatory. I doubt that
the landfill tax really is the driver for the export of particular
sorts of waste in some of those circumstances. If the hon. Gentleman is
worried about particular instances, perhaps he will let me have a look
at
them. The
hon. Gentleman asked how much revenue was lost as a result of the Waste
Recycling Group case. We think that the repayments are likely to be
around £150 million. We are obviously consulting to
ensure that the tax is robust and will continue to contribute to our
environmental objectives. He asked why we are having the consultation.
The answer is that landfill tax
has been in place for more than a decade now, and in line with the
principles of continuous improvement, it is good practice to review the
arrangements underpinning the tax, which is why this consultation has
been issued. A review is particularly important at the current time
because of changes in environmental protection regulation and waste
management industry practices over the past few years. The consultation
is aimed at ensuring the continued soundness of the administrative and
legislative arrangements on which the tax is based. I will deal
quickly with the questions raised by the hon. Member for Hammersmith
and Fulham regarding inert waste. He is right to point out that we are
proposing to change the way that inert materials are currently
classified, which will result in the Treasury gaining
£160 million of additional revenue.
The
understanding of the impact of particular waste, and in what
circumstances waste can be considered inert, has—believe it or
not—moved on considerably in recent years. In particular, the
issue has been considered at length, resulting in European legislation
and the putting in place of a sophisticated waste testing regime.
Subject to the outcome of that consultation, the Government are
proposing to follow the European legislation and testing regime in
order to determine, for tax purposes, which wastes are inert. That will
mean that we have greater certainty that lower rated wastes are
properly inert, in line with up-to-date thinking. That may mean that
certain waste, which was previously lower rated, may become standard
rated. But this is the right outcome in environmental terms if the
wastes in question are not, in fact, really inert. So we are bringing
the entire structure up to date.
I hope that
Opposition Members who recognised, in general, the desirability of
having this kind of tax, will also agree that it needs to be up to date
with current scientific and environmental thinking and will support
clause 18.
Question
put and agreed
to. Clause
18 accordingly ordered to stand part of the
Bill.
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