Landfill Tax Revenue: Use (Hansard, 17 January 1995)

§ The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley)
My Lords, revenue from the proposed landfill tax will form part of general government receipts. The case for public spending on environmental projects must be made on its own merits and judged against competing claims on public expenditure.

The Earl of Bradford
My Lords, I thank my noble friend for his reply. Is he aware that all those with an interest in environmental matters will applaud Her Majesty's Government for raising the cost of landfill as that will encourage people to recycle and to incinerate waste? However, is he also aware that there will be an inevitable environmental cost on the countryside as those who unfortunately seek to avoid paying the new tax will dump their rubbish on the countryside and create an enormous problem as a result? Will he encourage Her Majesty's Government to make available some of the funds raised by the new tax to solve the problems created for the countryside?

§ Lord Henley
My Lords, that is certainly something that my right honourable friend the Chancellor of the Exchequer and my right honourable friend the Secretary of State for the Environment will consider after they have published their consultation document on the proposed new tax.
As regards the problem of fly tipping, to which my noble friend referred, my advice is that the level of fly tipping has decreased over the years since the introduction of the Environmental Protection Act 1990. Obviously, that is difficult to measure and we should be very interested to receive further evidence from interested parties as to levels of fly tipping in the consultation period. However, the experience of those countries which have already introduced taxes of this type is that it has not led to an increase in fly tipping.

§ Lord Ezra
My Lords, does the noble Lord agree that while it is right that the Government should try to discourage less desirable ways of disposing of waste, at the same time they should be encouraging more desirable methods, which is the purpose of the Question? In particular, does the noble Lord agree that further assistance and encouragement should be given to local authorities, which have already gone some way to finding novel ways of recycling and separating 528 materials? Does he also agree that there should be encouragement for developing the market for recycled materials, which has inhibited developments in this direction for many years?

§ Lord Henley
My Lords, the Question relates in particular to discouraging landfill. That is the problem on which my right honourable friend the Chancellor of the Exchequer wishes to concentrate. However, no doubt the further matters to which the noble Lord referred could be considered during the consultation period by my right honourable friends the Chancellor of the Exchequer and the Secretary of State for the Environment.

§ Lord Gisborough
My Lords, will my noble friend confirm that the charges levied will relate to the administrative cost of dealing with licences and will not be used as a means of raising taxation generally as an indirect form of taxation?

§ Lord Henley
My Lords, I cannot confirm or deny anything at the moment because my right honourable friend has said he wishes to publish a consultation document on these matters. In his Budget speech my right honourable friend said that he did not want to damage our competitiveness by increasing the tax burden on business but that he wished to alleviate the extra costs imposed on business as a result of the tax by examining compensatory reductions in, for example, the level of employer national insurance contributions and by that means broadening the tax base.

§ Lord Eatwell
My Lords, can the Minister tell the House whether the Government are opposed to the hypothecation of taxes in principle or simply in this case?

§ Lord Henley
My Lords, I can answer simply by saying that there has to be a strong presumption against hypothecation.

§ Lord Lucas of Chilworth
My Lords, will my noble friend tell me whether there is any difference between the proposed tax as announced by the Chancellor in his Statement and the landfill levy as announced by my right honourable friend the Secretary of State for the Environment?

§ Lord Henley
My Lords, as I made quite clear, those are matters which both my right honourable friends will consider following publication of the consultation document.

§ Lord Geddes
My Lords, will my noble friend encourage his right honourable and noble friends to consider seriously an alternative to disposal of waste by landfill sites in the form of incineration of that waste in order to create novel and beneficial fuels for power generation?

§ Lord Henley
My Lords, at present landfill is used to dispose of some 100 million tonnes of waste a year, representing approximately 70 per cent. of all our waste. That is a much higher proportion than in most other countries. That is one of the reasons why my right honourable friends the Chancellor of the Exchequer and 529 the Secretary of State for the Environment would like to discourage landfill. The tax could be one way of doing that.