UK Finance Minister acts on waste

UK Chancellor Gordon Brown has announced further important steps in the Government’s strategy to protect the environment, including action to tackle the problem of waste, and expand on the Government’s strategy for using economic measures for delivering environmental benefits. Building on its recent Budgets, the Government today announced a series of targeted measures to help to deliver environmental benefits, including the following.



Waste



Waste Strategy 2000 sets out the Government’s vision of sustainable waste management in England. It sets challenging targets for recycling and composting, recovery of household and municipal waste and reducing the amount of industrial and commercial waste sent to landfill. The Cabinet Office Strategy Unit has conducted a review of waste policy, considering the role of different policy measures, including economic instruments, in achieving the Government’s waste targets. The Strategy Unit’s conclusions are being published alongside the Pre-Budget Report.



Landfill tax



The Government is already committed to increasing the standard rate of landfill tax (which covers active waste) by £1 each year until 2004-05, in line with the landfill tax escalator announced in 1999. The Government also announced in Budget 2002 that it expected that the standard rate would need to be increased significantly in the medium term. Subject to consultation on details, the Government has announced that it will increase the landfill tax escalator to £3 per tonne in 2005-06, and by at least £3 per tonne in future years on the way to a medium- to long-term rate of £35 per tonne. The Government’s intention is that the increases will be introduced in a way that is revenue-neutral to business as a whole. The Government will consult with stakeholders on options for the package, including the recycling of revenue, before making any decisions.



No changes are being made to the lower rate for inactive waste, which remains at £2 per tonne.



Aggregates levy



Following extensive consultation with industry, and failure to secure a voluntary scheme, the Government introduced the aggregates levy on 1 April 2002 to incorporate the environmental costs in the price of virgin aggregates. Following independent research, the levy was set at a rate of £1.60 per tonne on virgin aggregate commercially exploited in the UK.



In the 2001 Pre-Budget Report the Government announced that it would examine proposals to deliver additional environmental benefits through the aggregates levy by encouraging the positive use of aggregates waste. Following informal discussion with the industry, the Government will issue a formal consultation paper shortly in order to gather further information on the issues involved.