Chancellor Gordon Brown delivered his statement to the House of Commons this afternoon, with the accompanying report confirming the expected 3 a tonne rise in Landfill Tax to 18 a tonne from April 2005.
”Incineration has a part to play…by dealing with the residual waste that will be left even after achieving the much higher levels of recycling and reuse.“
– HM Treasury
But as for other disposal taxation options, the government said it was not convinced of the need for a tax on incineration, and that it would be necessary as a process for residual waste material that is not recycled or composted.
The report said: “The government has a legal commitment under the landfill directive to reduce reliance on landfill and, to help to achieve this, is increasing the standard rate of landfill tax. Incineration has a part to play in meeting this commitment, in particular by dealing with the residual waste that will be left even after achieving the much higher levels of recycling and reuse that the Government is aiming for.
“Taking into consideration all these factors, including existing barriers to incineration, the Government is not convinced that there is a strong case for the introduction of a tax on incinerated waste,” it added.
The Treasury said the government would continuing to explore barriers to new waste treatment technologies including mechanical biological treatment. And, it added that it was looking into the potential role of enhanced capital allowances to help introduce new waste management technologies.
Challenge Fund
Elsewhere in the Pre-Budget report, the government said it would be announcing the allocation of Defra's 45 million Waste Minimisation and Recycling Challenge fund in the next few weeks. The fund will help English local authorities introduce new sustainable waste management systems and should help with the Landfill Allowance Trading Scheme, the Treasury said.
The scheme would see a local authority regional centre for excellence established specifically focusing on waste, the Pre Budget report said. Revised guidance on planning for waste plants would be released shortly, it added.
Landfill
The amount of waste going to facilities registered under the Landfill Tax has fallen by 20% over the period between 1997/98 and 2003/04, the Pre Budget report said.
There were “early indications” that the rise in the Landfill Tax had encouraged reductions in active waste going to landfill, the report said. A 4% drop in the landfilling of active waste had occurred since the decision to increase the Landfill Tax escalator to 3 a tonne each year, the government said.
The government said the 1.60 per tonne levy on the production of virgin aggregates was achieving its objectives, with the production of primary aggregates falling by 8% between 2001 and 2003. The production of recycled aggregates increased by over 3 million tonnes in the same period, the Treasury said.
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