Archived press release

New Research Shows Industry Slow To Respond To Landfill Levy - Call By FOE To Raise Tax and Extend To Incineration

18 November 1997

In advance of the Budget Green Paper, expected on 25th November, Friends of the Earth are calling for changes to the first green tax, the landfill tax, following new research published by FOE today that shows it is failing to encourage more than two-thirds of companies to reap the financial and environmental benefits of waste reduction. [1]. FOE is calling on the Government to increase the tax and extend it to cover incineration.

The new research written by ECOTEC Research and Consulting Ltd, examines the effectiveness of the tax and identifies barriers that prevent it from working. The research involved surveying most of the major waste disposal companies, 72 waste producers and 4 local authorities. The research found that:

• 40 per cent of waste producers have done little to reuse, recycle or minimise their waste, 29 per cent were already engaged in waste minimisation and 31 per cent had stepped up waste minimisation activities as a result of the tax.
• 7 out of the 11 waste disposal companies surveyed are investing in material recovery facilities (partly in response to the landfill tax and partly in response to other legislation, for example the new packaging regulations).
• Local authorities are showing increased interest in recycling and composting but are hampered by existing contracts and lack of knowledge on how the tax will change over time.
  
• A major barrier to the effectiveness of the tax is the small size of the tax in relation to overall company costs (typically less than 0.05% of total costs) and the short payback time demanded of waste minimisation investments.

Recommendations in the report (in addition to raising the level of the tax) include:
Use the tax to ensure targets within the Government's waste strategy are met -rather than setting the tax by (unsuccessfully) trying to put economic values on the environmental damage caused by landfill.
Tax incineration - transforming the tax into a waste tax and hence encourage recycling, reuse and waste minimisation .
Stimulate the demand for recycled materials.

Mike Childs, Senior Waste Campaigner at Friends of the Earth, said:

“ If Gordon Brown wants UK industry to reduce waste and be more efficient in the way it uses resources then he must increase the landfill tax and extend it to cover incineration. If he fails to take action then the UK will continue to waste money, throw away valuable resources and remain dependent on deeply unpopular landfills and incinerators.”

He added:

“ The budget should deliver real progress on ecological tax reform, reducing the costs of jobs as well as delivering environmental gains. The money raised by increasing the landfill tax should therefore be used to cut employers' national insurance contributions and provide funds to help local authorities set up comprehensive recycling and composting programmes. We need a truly 'green tax'and not simply another mechanism to swell Treasury coffers.”

ENDS

NOTES TO EDITORS:

[1] Effectiveness of the Landfill Tax in the UK: barriers to increased effectiveness and options for the future - a final report for Friends of the Earth. Copies of the full report are available from FOE, phone 020 7490 0237

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