Paying dear for a load of rubbish

Public-sector finance: local authorities would like to scrap the new Landfill Tax, writes Paul Gosling
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The Independent Online
Babies in Leicestershire are expected to soil more reusable cotton nappies in future, and less disposables, as part of the county council's strategy to avoid a potential pounds 3.2m annual bill for the Landfill Tax. It may be typical of the measures local authorities will take as a result of the unexpectedly high rate of the tax announced in November's Budget.

Leicestershire council has calculated that with 50 million nappies disposed each year in the county, it will cost pounds 100,000 to dump them by landfill under the new arrangements. Last week, the authority entered into a partnership with a local nappy washing company and a hospital maternity unit to encourage the use of traditional, reusable nappies.

Local authorities had expected the Landfill Tax, which will operate from October, to be set at pounds 5.53 a tonne and are disappointed that the figures are actually pounds 7 a tonne for active wastes and pounds 2 for inactive, mostly construction, wastes. Councils argue that the costs are not being met in the local government finance settlement, saying this is another example of increased obligations on declining revenues.

The Government's move towards the "polluter pays" principle is accepted by authorities, but they believe it is unfair that they are penalised for merely collecting the wastes others have generated. Increased costs will be passed on to business but not for domestic wastes.

There will be no financial incentive for households to reduce what they throw away, bar the nebulous notion that unless total wastes are reduced there will be either an increase in council tax or a reduction in services. In Leicestershire, where the council tax is capped, the expected cost of the Landfill Tax is equivalent to a 1 per cent reduction in spending on schools, or 3 per cent on social services. Savings may have to be made out of these areas as so much other expenditure is mandatory.

Among other steps being taken by Leicestershire to reduce wastes is the publication of a directory of shops that operate "return and refill" bottle schemes and of distributors of local organic grocery.

Britain's businesses may not welcome the changes councils will encourage. Chas Ball, executive director of the environmental consultants Save Waste And Prosper, says: "It's about lifestyle. It raises questions that the Government may be uncomfortable about if it went too far, about the life of items, using less processed food, buying locally grown organic food delivered to your door, and nappy washing - all of which are counter to the interests of the big corporations."

Many waste-collecting authorities are promoting recycling, but only 16 per cent have implemented kerbside collections of dry recyclable products, such as paper, plastics and cans. The Landfill Tax will help to increase this proportion, particularly where there is a unitary local authority responsible for waste collection and disposal.

Where there remain two tiers of authorities there is little incentive for district councils to reduce wastes when the bill is picked by the counties. This is leading some county councils to call for waste collection responsibilities to be transferred to them. The problem has worsened in recent years with the widespread introduction of wheeled bins with greater capacity, leading to a 50 per cent increase in the wastes collected.

One option being considered by government is to copy the example of Seattle, Washington, where households are charged according to the wastes collected. Households contract with their municipality for small, medium or large bins to be emptied, and the bills vary accordingly. One worry is that this may lead to more fly-tipping.

It is predicted that the pounds 7 per tonne charge may rise significantly because the Department of the Environment estimates that only when the cost reaches pounds 20 a tonne will it be enough to cause changes in behaviour. Until then, councils may still find it uneconomic to arrange kerbside collections, more recycling facilities and separation of wastes after collection. But it may lead to an expansion of incineration for energy production, which becomes more viable, especially in urban areas where a large amount of wastes can be collected for a comparatively low transport cost. Many environmentalists are concerned at the damaging effects of incineration, which is known to increase cancer-causing dioxin emissions.

The Association of Metropolitan Authorities would like to see postponement of the Landfill Tax, at least until the implications of it are better understood, adding that "it is only too transparent that this is primarily a revenue-raising measure for the Treasury", which will produce "severe inequities for local authorities".

Environmentalists are concerned that taxation is being used to change behaviour without analysis of what new damage may be brought about. The "polluter pays" principle is to be encouraged - but not if it indirectly leads to worse pollution.

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