§ 4. Mrs. Jane KennedyTo ask the Chancellor of the Exchequer what assessment he has made of the economic impact of introducing a landfill tax. [12675]
§ The Paymaster General (Mr. David Heathcoat-Amory)The landfill tax will encourage the minimisation, re-use and recovery of value from waste where it is economically efficient to do so. Since the revenue will allow the main rate of employer's national insurance contributions to be reduced, the tax will provide for a further boost to employment.
§ Mrs. KennedyDoes the Minister agree that, notwithstanding adjustments to the standard spending 457 assessment, the cost of the new tax will fall heavily on local authorities, which will find that the cuts in national insurance will not fully compensate for the new tax? Does she also agree that the people of Liverpool will face an extra burden of £1.5 million a year on their council tax bills? Is that not another example of a new Tory tax on an already overburdened people?
§ Mr. Heathcoat-AmoryLocal authorities will see a reduction in their national insurance contributions. As many of their services are labour-intensive, they will benefit in that way. Obviously, it is the instinct of Liverpool council to pass everything on to the ratepayer. That is not the instinct of Conservative councils. They will be in a good position to reduce the amount of waste that they send to landfill by seeking alternatives, such as re-use and recycling, which will reduce the amount of tax that they pay while they get the benefit of the national insurance contribution cut.
§ Mr. RentonIs it the intention that the landfill tax should be paid by a local authority, if it has to move thousands of tonnes of waste from where the authority put it 10 years ago to another site? May I warn my hon. Friend that an extension to the Bluebell railway line in my constituency, which is loved by railway buffs and is an important tourist attraction in Sussex, may not be able to proceed if the answer to my first question is yes?
§ Mr. Heathcoat-AmoryI will clearly have to look into the Bluebell line, because I would not want to inhibit my right hon. Friend's project. I can confirm that, in principle, it is a rule of the tax that all controlled waste sent to a registered landfill site will bear tax at an appropriate rate.