On how the Landfill Tax revenues will be used, Chancellor Gordon Brown said that consultation will take place on how the government “proposes to recycle Landfill Tax revenues to businesses”.
The Pre-Budget Report contains a chapter on the environment with a section on “improving waste management”. On the environment, the report states that despite considerable progress, “the government recognises that there are more opportunities and challenges ahead. Tackling the remaining environmental problems is vital to delivering a better quality of life for everyone, today and for future generations. This chapter sets out the action the government is taking to meet these challenges by tackling climate change and air quality, improving waste management and protecting Britain's countryside and natural resources.”
On waste related issues the following specific statements are made:
Health
The report notes that the government has commissioned an independent review of the existing literature on the evidence of the health and environmental effects of waste management options. “The first of two stages of the work is being reviewed, with the aim of publishing the complete study in the spring. This review will inform the development of policy relating to waste management and debate by all interested parties, including local authorities.”
Waste minimisation
Says the Treasury: “The government is continuing to expand its evidence-basis for the way waste from households and all sectors of the economy should be managed. This involves balancing environmental, health, economic and social considerations and ensuring there is a strong incentive for individuals and business to minimise the waste they generate.”
Sustainable production
Emphasising the need to create less waste in the first place, the report goes on to explain how the government is approaching the concept of more sustainable patterns of consumption and production. “The government's approach involves breaking the link between economic growth and environmental pollution, improving resource efficiency and examining the life-cycle of a product, through design, production, use and disposal, to help reduce its impact on the environment.” A variety of economic tools, such as voluntary agreements, will be examined with business to achieve these objectives.
Landfill Tax
The report says that the government is encouraging a shift away from landfill through polices such as “significant” increases in the Landfill Tax and through tradable landfill allowances. On the Landfill Tax the Treasury confirms it will be 15 per tonne from April 1 2004 and will increase by 3 per tonne in 2005-06. No specific figure is given for 2006-07 which leaves open the option for a higher rise in the tax. The Treasury simply says that after 2005-06, the Landfill Tax will rise by “at least 3 per tonne in the years thereafter to a medium to long-term rate of 35 per tonne.”
Business
The Treasury report confirms earlier statements that the tax should be revenue neutral to business as a whole and to local government. No longer will the Tax be used to offset any business taxation. Instead,it now says: “The government believes that there is a need for a range of waste management financing options and recognises that different financing options will work better in different circumstances.”
A range of measures is proposed which will include grants and financial support. “The government also believes that there is a need to extend the promotional and capacity building services to support a broader range of commercial and industrial sectors.” This could see more work for the Waste and Resources Action Programme.
The best delivery mechanism for providing financial support “through a package of measures” is still under discussion.
Local authorities
The report notes that in August 2003 the government announced that a new Waste Management Performance Fund will be introduced in 2005-06 as a reformed Waste Minimisation and Recycling Challenge Fund. The Treasury says that the Performance Fund “will provide non-ringfenced incentives for (English) local government to deliver a step-change in sustainable waste management performance”.
In its first year, the Performance Fund will run in parallel with the Challenge Fund and will have 45 million available to reward good management performance, rising to 90 million in 2006-07.
Consultation will take place shortly on the Performance Fund and the government is also to announce “in due course” how the Landfill Tax increases from 2005-06 onwards will be made revenue neutral to local authorities.
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