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Landfill tax escalator threatens future diversions, says LGA

Landfill tax escalator policy is jeopardising the UKs chances of meeting future targets for landfill reduction and recycling, the Local Government Association (LGA) has said.

In its 2008 landfill tax report, the LGA argues that the Government should stop annual increases in the landfill tax escalator because councils are already making significant improvements in recycling and reducing waste sent to landfill.

It said that making councils pay more through taxes means they will lack funding to build new recycling facilities to divert more waste from landfill. The amount due over three years could be up to £1.5 billion.

LGA Environment Board chairman Paul Bettison said: The real danger is that the UK will fail to hit stringent EU recycling and landfill targets, which will not only be bad for the environment but could see the UK paying hundreds of millions of pounds in fines to Brussels.

The LGA said the National Audit Office has warned that fines of £200 million could be passed onto tax payers for failure to meet the Landfill Directive.

It could take up to a decade to build the infrastructure needed to ensure targets are met, the LGA said. In the meantime councils would be forced to pay spiralling amounts in taxes to the Treasury.

Bettison added: The tax will end up generating money for the Treasury without actually having any environmental impact. This bureaucratic and counter-productive merry-go-round must end.
To ensure investment is protected for infrastructure and does not go on taxes or fines the LGA has suggested:

Government returns the landfill tax to councils

a landfill tax holiday of five years for councils to allow them to build infrastructure

no more hikes in future tax without enough notice to allow for infrastructure to be built.

The cost of increasing landfill tax for councils will be:
 £32 per tonne in 2008/09
 £40 per tonne in 2009/10
 £48 per tonne in 2010/11

Breakdown of what landfill tax will cost councils - a total of £1.5bn over the next three years:
 £ 420m in 2008/09
 £ 480m in 2009/10
 £ 540m in 2010/11

Image: LGA Environment Board chairman Paul Bettison

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