Explaining the thinking behind the measures, John Healey, Financial Secretary to the Treasury, said the Pre-Budget Report “has announced important decisions for the way we handle waste.”
He highlighted the proposed rises in Landfill Tax, the changes to the Landfill Tax Credits Scheme and research to be carried out into the health and environmental impacts of new waste technology.
Mr Healey continued: “The PBR is the government's immediate response to some of the recommendations in the Strategy Unit report. This is a far-reaching report and we will consider it in coming months with other departments.”
Margaret Beckett, Secretary of State for the Environment, said: “We very much welcome publication of the Strategy Unit report and I am very grateful to the team. I am also deeply grateful to the advisory group. I very much welcome the decision by the Chancellor to immediately respond to the report with the changes to the Landfill Tax Credits Scheme and the Landfill Tax which will affect what we do in the future.”
Signals
Mrs Beckett said the increases in Landfill Tax were giving the right signals, “far enough ahead and this is the best way of proceeding.” And she commented on the need to decouple waste growth from economic growth, saying: “Unfortunately we have a reverse decoupling at present. Waste is growing faster than economic growth.”
Mr Healey, confirmed that a Landfill Tax rate of 35 a tonne was targeted in the medium to long-term after the year 2004/5 when the 1 annual increase ends. “The 3 a year increase is a very significant long term signal for those businesses investing in alternative capacity and for local authorities looking at alternatives to landfill.”
Tax credits
The Financial Secretary highlighted the fact that from April 2003, an additional 100 million to 110 million will be available to spend on better waste management and recycling in the UK. This money will come from reform of the Landfill Tax Credits Scheme.
He also emphasised that the Treasury view was that the UK's progress in achieving more sustainable waste management had been hampered by cheap landfill. He said that the UK “has been bedevilled by one form of disposal. The tax measures proposed today will help.” He warned that there is a danger in simply focussing on landfill and that a broader approach needed to be taken.
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