The tax, on waste material disposed in landfill sites, is currently at 13, and is due to go up to 14 in 2003. Today's announcement means the tax would rise to around 18 a tonne in 2005-06.
Mr Brown said: “We have a commitment to protect the environment for our children and future generations and so we are publishing today a detailed paper setting out our approach to the environment. We will now consult on a revenue neutral proposal – to raise the landfill levy by 3 per tonne per year from 2005-6.”
The government has said that its medium-to-long term aim for the Landfill Tax to reach 35 a tonne. The lower rate of 2 a tonne will remain for inactive waste.
The Chancellor's announcement is much lower than some in the industry had been expecting. In the last few weeks it had been thought that Mr Brown might push Landfill Tax up by 5 each year.
The lower figure announced today would appear to fit in with the gloomy forecast of economic growth as portrayed by Mr Brown in the rest of his Pre-Budget Report and his need to maintain economic stability in the UK.
“We will tolerate nothing that will put hard won economic stability at risk,” Mr Brown said.
The Chancellor also announced a reduction in the taxation on environmentally-based fuels, which could lead to a greater re-use of waste oils to produce “bio-fuels”.
“On environmentally based fuels I can announce we will, for bioethanol road fuel, reduce the duty rate by 20p per litre,” Mr Brown said.
- The government has said in the Pre-Budget Report that it wil commission a review of the “environmental and health effects of all waste management and disposal options”. In the light of this review, it will look into a possible waste incineration tax, the report said.
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