Landfill Tax is set to rise to £40 a tonne today (April 1) as part of a three year commitment by the government.

In his Pre-Budget report in November 2008 (see letsrecycle.com story), Chancellor Alistair Darling confirmed that the levy would rise by £8 a tonne a year for the three years from 2008/09 to 2010/11, in a bid to "encourage sustainable ways of managing waste". He also indicated that the tax would continue to rise after 2010/11.

Councils and waste firms have called for certainty over the level of Landfill Tax after the current escalator runs out in 2010/11

However, while the move has been broadly welcomed by the waste sector, many councils and waste firms are now calling for more certainty over the level of Landfill Tax after 2010/11 - in a bid to give them more confidence in planning ahead.

And, the tax rise has prompted renewed calls from cash-strapped councils for the government to ring-fence some of the levy to support recycling initiatives.

While the Landfill Tax for active waste rises today from £32 to £40 a tonne, the rate for inactive waste remains frozen at £2.50 a tonne.

According to HM Revenue and Customs, the Landfill Tax "encourages waste producers to produce less waste, recover more value from waste, for example through recycling or composting and to use more environmentally friendly methods of waste disposal".

Speaking to letsrecycle.com, many in the sector acknowledged that the tax had already led to "major changes" to waste management practices in the UK since its introduction in 1996 by Conservative Secretary of State for the Environment, John Gummer, and welcomed the £8 hike.

Chris Murphy, deputy chief executive of the Chartered Institution of Wastes Management said: "When the government said it would be an £8 a year rise for three years we applauded the idea as we have always said in the past that Landfill Tax was too low. We are getting to the stage now where other waste treatment technologies are more valuable compared to landfill."

Steve Burdis, chair of the National Association of Waste Disposal Officers (NAWDO) added: "The escalator has always been appreciated for helping to drive sustainable waste management practice."

Future 

However, many of those who spoke to letsrecycle.com said that it was important for the Chancellor to state in his 2009/10 Budget on April 22 how much the levy would rise in future - because this was crucial to planning.

Mr Burdis said: "We are left in limbo in the medium to long term. We think Landfill Tax will replace landfill allowances as the key driver to divert waste from landfill and I would implore the Treasury to let us know his long-term plans in the Budget. He has said it will go up but not by how much."

Mr Murphy added that the tax was generally expected to go up to as high as £70 a tonne over the next few years but that the situation was still very unclear.

He said: "We need to know what the escalator might be after next year, and how long that might be in place. I think we should have that sort of announcement before next year to give us time to plan. But I don't think we will see it in the Budget. I don't think anyone will make any statement about the longer term of the escalator with an election in the offing."

Adam Read, consultant at AEA, cast further doubt on whether there would be an announcement. He said: "The Chancellor could delay any announcement to see what happens with the economy. Paying Landfill Tax is an issue for businesses at the moment."

Councils

Alongside the call more long-term clarity over Landfill Tax, council representatives told letsrecycle.com that they still wanted to see more of the revenue from the tax returned to them to fund sustainable waste management initiatives.

Joy Blizzard, chair of the Local Authority Recycling Advisory Committee - which represents councils recycling officers - said: "Landfill Tax has been a great stimulus for getting things going but we would like to see more of the revenue ring-fenced for sustainable waste management.

"Local authorities are under a lot of pressure and we have got very few tools to prevent waste higher up the chain," she added.

Ms Blizzard's comments echo those made by the Local Government Association (LGA) earlier this month, who claimed that Landfill Tax will cost councils £620 million in 2009/10 and have been campaigning for months for the tax to be returned to local authorities (see letsrecycle.com story).

Councillor Paul Bettison, chairman of the LGA's environment board, said "Landfill Tax is quite literally costing councils the earth and this latest rise will only add to the bill. The fear is that householders could ultimately pick up the extra cost.

"Councils could use this cash to keep council tax down and build the waste and recycling facilities that the country needs," he added.