21 December 2000

Meacher signals tax changes and gives guidance on council spending

Sweeping changes to the Landfill Tax are on the cards, Environment Minister Michael Meacher hinted today. The minister also voiced robust support for the newly-formed Waste and Resources Action Programme, and revealed that he expected councils to spend 50% of the money allocated under a general services heading, which includes culture, on waste management and recycling.

Mr Meacher was speaking at a Parliamentary meeting of a sub-committee of MPs looking at “delivering sustainable waste management”.

The landfill tax and the credits system has faced criticisms for potential frauds and for the fact that tax credits can be seen as public money handed over to the private sector.

Mr Meacher was asked about the landfill tax system and replied “It has merit but is not ideal for our purposes. We have tried to adjust it and make it more suitable for our purposes.”

But, when pressed, he said that he was doubtful that it can be changed within its present structure.

Crispin Blunt, Tory MP for Reigate and Banstead, said to Mr Meacher that “surely the real issue is that it is public expenditure in reality at arms length. Let’s be honest – this is taxation that is being spent that should be accountable”.

Mr Meacher said that Mr Blunt’s view was “basically correct”, adding: “I agree with you that we have to be clear whether this is public expenditure or a privately driven scheme… we mustn’t confuse this.”

And, the minister commented that he had a concern that there was an inbuilt flaw in the system. He said: “The last thing the landfill operator wants to do is to promote recycling.” He reasoned that this would conflict with the business of landfill which was what the operator was in business to do and so environmental projects to help the local community around the landfill site were often preferred.

But, Mr Meacher reminded the committee that the issue was not his ultimate responsibility and that both Customs & Excise and the Treasury would have to be convinced if changes were to be made. One of the difficulties in making changes, said Mr Meacher, is that the public spending programme and structure for the next few years had already been agreed. “If the system came into public control it would need a public expenditure stream and they are fixed.”

The Waste and Resources Action Programme featured several times in Mr Meacher’s comments which came a week after several committee members had taken a hardline on the new organisation.

Mr Meacher, when asked about the problem of insufficient markets for materials, said: “Through WRAP we will be able to provide support for the kind of infrastructure they (local authorities) need.”

He went on to say that WRAP will be a private sector body, arms length from government and a small, tight team. “They are producing a business plan in April and we have confidence in them.”

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