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Pre-Budget report confirms Landfill Tax Credit Scheme changes

The Treasury today confirmed that an overhaul of the Landfill Tax Credit Scheme is imminent with the government saying that it will consult on the scheme's transition arrangements.

Details of the review come in the Pre-2002 Budget Report which was issued as the Chancellor, Gordon Brown, delivered his Pre-Budget speech to the House of Commons. Although most of the issues in the report have been discussed, they confirm the government's commitment to waste minimisation and more efficient waste management.

The report said that the government is attracted to replacing all or part of the Landfill Tax Credit Scheme (LTCS) with a public spending programme to direct resources towards government priorities on sustainable waste
management. The government, together with the devolved administrations, is now developing options for a spending programme for consideration as part of the 2002 Spending
Review. As part of this decision, the government said it “will consider keeping the present scheme in
its present form or with minor modifications”. But added that it “will consult on the future of the scheme, including the transition arrangements”.

The report also outlined how the government hopes the aggregates levy, which will be implemented in April 2002, will encourage the development of new recycling processes which will include waste tyres and glass. The levy should ensure that the environmental impacts of quarrying aggregate, such as damage to biodiversity and visual intrusion, are more fully reflected in aggregate prices.

The levy aims to “encourage the use of alternative
materials, such as wastes from construction, demolition and clay and coal extraction, that would otherwise be disposed of to landfill. It will also promote greater efficiency in the use of virgin aggregate and the development of new recycling processes, such as using waste tyres
and glass.”

And to tackle the problem of abandoned vehicles, the government said that it has launched a consultation exercise on proposals to remove them more swiftly in the short-term and to prevent them from being abandoned in the longer-term. The government said that as part of these proposals, it is determined to challenge motorists who evade vehicle excise duty and is reviewing options for ensuring that there is a sufficient penalty to deter such evasion.

The government also said that it will shortly publish its conclusions on how a tradeable permit system could be implemented. According to the report, the system “will give local authorities and the waste industry a powerful signal about the scale of change required under the Landfill Directive and encourage planning and investment in alternatives to landfill”.

The Pre-Budget report confirmed that the rate of tax for active waste will increase by 1 each year until 2004, in line with the landfill tax escalator.

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