Waste dumping at landfill sites will be taxed from next year by HM Customs and Excise, raising about £500m per annum. The extra revenue will be used to cut employers' National Insurance contributions.
The Chancellor, Kenneth Clarke, said yesterday that the new tax would curb the pollution due to landfill dumping while encouraging job creation.
Environmental groups have welcomed the move, but the 2,000 waste disposal companies that run Britain's dumps have condemned the new charge.
It will hit the turnover and profits of a fiercely competitive industry, in which a substantial minority of cowboy companies are willing to flout environmental standards and take waste with few questions asked.
Yesterday the Environment Secretary, John Gummer, said there would be rebates from the tax for companies that finance restoration work on old, polluting landfill tips or ``cutting edge'' research into waste recycling and minimisation.
Some 100 million tonnes of landfilled waste would be covered by the tax. The average disposal cost is £10 a tonne and the Government suggests a 30 to 50 per cent tax - an extra £3 to £5 a tonne. If ministers went for the higher figure, raising £500m a year, this would only cut employers' National Insurance contributions by 0.2 per cent.