Defra defends Landfill Tax system

Speaking following the publication of an LGA study yesterday, which called for an overhaul of the tax amid fears that it could hit council recycling efforts (see letsrecycle.com story), a Department spokeswoman claimed that it was merely “scaremongering.”

In particular, she claimed that the tax had already been a success and had already achieved huge benefits in the UK.

She said: “We expect recycling to be higher, not lower, as a result of the landfill tax escalator. By 2010 the escalator will be reducing the climate change impact of landfill by the equivalent of 800,000 tonnes of CO2 emissions per year. There will be further benefits through resources saved by increased levels of recycling.

“The landfill tax has been very successful: waste to landfill fell by 18% between 2001 and 2006,” she stressed.

The spokeswoman added that there was “no reason” for councils to face fines for not diverting waste from landfill – because England was on track to meet its targets.

She said: “The LGA story is scaremongering. England is making good progress towards EU landfill targets so there is no reason why local authorities should face financial penalties. The Government has already allocated £1.3bn in PFI credits to waste infrastructure projects, with a total of £2bn available over the next three years.”

Response 

The comments from Defra come ahead of any response from environment secretary Hilary Benn.

Sir Simon Milton, chairman of the LGA, sent a copy of the LGA's report to the minister on Friday (June 27) asking him to comment on the findings and to give clarity on how the Landfill Tax was being returned to councils, which he first raised in a letter sent in March (see letsrecycle.com story).

Writing in the document, Sir Milton said: “I am concerned that we have not made a great deal of progress through our correspondence… I must once again on behalf of my members ask government to return Landfill Tax to councils as promised or introduce a Landfill Tax holiday for councils or five years to allow them to build necessary recycling facilities.

“Furthermore I would like to ask for your assurance that no more increases in future in the tax will be made without enought notice for councils to respond to build recycling infrastructures,” he added.

Levy 

The £8 a tonne Landfill Tax escalator first kicked in in April 2008, with the levy rising from £24 to £32 a tonne, in a move which was broadly welcomed by the waste management sector (see letsrecycle.com story). It is set to increase by the same amount annually until it reaches £48 a tonne in 2010-11.

In the most recent Budget statement, the Chancellor stated that “The Government expects the standard rate to continue to increase beyond 2010-11” – suggesting that further increases beyond £48 are also likely.