2 December 2008

Government considers landfill bans and lower VAT for repair

The government has revealed that it is “actively considering” banning specific waste streams from landfill and may look at re-structuring VAT to promote repair following the publication of a House of Lords report on waste reduction.

The government does not agree that removing hypothecation of a proportion of the landfill tax undermines our commitment to tackling commercial, industrial and construction waste

 Waste Reduction: Government Response

However, it has rejected recommendations to ring-fence Landfill Tax to fund waste reduction initiatives and has rebuffed suggestions that budget cuts for organisations such as WRAP could damage business recycling rates, which were also contained within the report.

The revelations came in the government’s official response to the House of Lords Science and Technology Committee’s report on waste reduction, which, in August, claimed that waste prevention had been somewhat overlooked and that more needed to be done to tackle business waste (see letsrecycle.com story).

While the government welcomed the report for raising the prominence of these issues, officials said that they already outlined the importance of the issues in the English Waste Strategy 2007 and had already made “good progress” on the objectives.

This progress has included the “substantial” increase of the Landfill Tax escalator in 2007, a range of voluntary agreements with different sectors, the implementation of EU directives and through agreement on revisions to the Waste Framework Directive, including a new definition for by-products and ‘end of waste’.

According to the BREW centre for local authorities, the number of local authorities providing a trade waste recycling service was also increasing, reaching 121 in February 2008, they added.

However, officials acknowledged that on top of the progress already being made, further measures, which could make a “significant contribution”, were also “under active consideration”.

Landfill bans

These include the possibility of landfill bans of specific waste streams, stronger standards on public sector purchasing, using the resources of the newly established Centre of Expertise in Sustainable Procurement, new or enhanced consumer-facing campaigns on waste reduction and new or strengthened sector-specific voluntary agreements.

In addition the report said that officials were engaged in “active discussions” with stakeholders about the broader direction that the country should take in going further on commercial and industrial waste.

The report said: “We expect all these to have an impact on waste generation in addition to downstream impacts on waste disposal.”

Other measures which the government also confirmed could be on the horizon included individual producer responsibility over waste electrical and electronic equipment (WEEE), additional survey work on business waste and, significantly, lower VAT for repairs of household goods.

It said: “On repairs, the principal VAT Directive does not currently permit the UK to apply a reduced VAT rate to repairs of household items. However, the European Commission proposed some changes to the Directive in July 2007, which, if agreed by Member States, could open up this possibility.

“If this proposed change is agreed, the Government will consider whether there is a policy case to introduce any new reduced rates in the UK.”


Despite these commitments, however, the government rebuffed some other recommendations made by the House of Lords committee – including the suggestion that it should ring-fence Landfill Tax to help incentivise waste reduction.

The report said: “The government does not agree that removing hypothecation of a proportion of the landfill tax undermines our commitment to tackling commercial, industrial and construction waste. Funding ringfences are being loosened across government departments, in order to provide maximum flexibility to priorities and deliver value for money.

“We do not plan to reinstate a ringfence around landfill tax revenue, since this would limit Defra’s ability to deliver the range of its objectives.”

Officials also rejected suggestions that budget cuts to recycling and waste reduction delivery bodies such as WRAP, NISP and Envirowise would have an averse affect on their ability to help businesses to cut waste.

The report said: “From the current financial year onwards, support will concentrate on providing the necessary evidence to encourage businesses to change their behaviour, rather than supporting individual businesses for projects where the benefits come quickly through to the company bottom line.”

It added: “This more selective approach to funding has inevitably led to a lowering of receipts for the delivery bodies to which the Committee refers.”


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