Treasury plays down waste tax 'hike'

Landfill tax is currently set at £13 a tonne

The Treasury has sought to play down reports that Chancellor Gordon Brown might more than double the tax on rubbish in his pre-Budget statement next month.

The denial came as Environment Agency chief executive Baroness Young welcomed such a move.

A sharp rise in Landfill tax is one of the measures environment groups would like to see to encourage people to recycle more of their waste.

Others include charging households who put out more than two bin bags of rubbish £1 per extra bag.

And Environment Minister Michael Meacher earlier this year called for the UK to follow the Irish example and bring in a 10p tax on plastic bags.

Baroness Young said she backed a landfill tax rise because the waste industry could not afford to switch to new technologies while landfill remained "so cheap".

Plastic bags

Tne Guardian suggested Mr Brown was poised to announce a Landfill tax rise in the Commons next month in his pre-Budget statement (PBR) .

But a spokesman for the Treasury insisted no decisions had been taken on increasing the Landfill tax, adding that there were no plans for a national plastic bag tax or a bin bag tax.

A levy of up to 10p on plastic bags was reported

Earlier Lady Young argued that the UK could not continue to bury its waste or burn it.

"We want to see moves to increase recycling to minimise the amount of rubbish we throw out," she said.

"We have got to become less of a throw away society...

"Certainly there has been discussion for a long time about the need to increase the landfill tax. It certainly goes up at a very slow rate.

"We want to see it double at least, because when we talk to the waste industry, they are very clear that the new technologies that they use elsewhere in Europe simply aren't economic here as long as landfill is very, very cheap."

Recycling schemes

Landfill tax is currently £13 per ton, but is currently set to rise to £14 a ton in April, next year.

The Treasury has been told by industry that the tax will not be effective unless it rises to between £30 and £40 a ton.

Lady Young told BBC Radio 4's Today programme she was sure doubling the tax would be enough to persuade councils - the major disposers of rubbish - to bring in recycling schemes.

"The important thing I think, however, is to make sure that the revenues raised by the tax are immediately funnelled towards helping local authorities bring in these new facilities for waste recycling."

Lady Young said she hoped any tax rise would not be passed on to the public.

'Short-term fix'

"One of the best things about an environmental tax is that it eventually diminishes because people change their behaviour and get out from under the activity that is taxed."

According to The Guardian, one school of thought in the Treasury says the chancellor should give councils until April 2004 before raising the landfill tax to £34.

Fly tipping is bad enough in my area without encouraging people to do it even more.
George, England

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Another school of thought backs a rise of £5 a tonne in 2004, with rises of £5 a time until it reaches £34 a tonne in 2007.

That latter thinking would boost Treasury coffers by £300m a year, pushing up income from the tax to more than £1bn.

The former approach would give Mr Brown an extra £1.2bn from tax in 2004.

However, an industry source, reportedly told The Guardian: "The money would provide a useful short-term fix for the Treasury which will still need extra money in 2004 to pay for more hospitals and schools and it could be justified on environmental grounds."