Landfill Tax (No. 2)

Andrew Bridgen Excerpts

Tuesday 16th June 2015 Commons Chamber

[Damian Hinds]

We have had a good, if short, debate on this important matter. Let me deal with some of the points that have been raised.

The whole point of landfill tax is to reduce landfill, and it has been successful in that regard. We have seen the amount of waste in landfill drop by 70% since 2000 and average household recycling rates have risen from 18% to 44%. Landfill tax is not the only cause of those beneficial changes, obviously, but it is one cause.

The hon. Member for North Durham (Mr Jones) is right to identify aspects of fraud that will not be eradicated by the measure, but that does not mean that the measure is not beneficial; it deals with a large part of fraud. Wider enforcement is also important, and I am assured that HMRC is on top of that. He and I are to meet in a couple of days, and I look forward to discussing in more detail particular issues that arise in his constituency and elsewhere.

[Andrew Bridgen (North West Leicestershire) (Con)]

Does my hon. Friend the Minister appreciate that it is a given that the higher the tax, the greater the incentive for people in the industry to evade the tax? What will the sampling regime be? Who will take samples of the waste and determine what grade of landfill tax is applicable?

[Damian Hinds]

Landfill operators must take a certain number of samples per customer load, depending on the risk profile of that customer. So if the operator has never had a difficulty with a customer before, rightly they should use a light touch, but where there have been problems before, that frequency should increase. There is a loss on ignition test to find out what volume of the sample is degradable and in its steady state there is a limit of 10%, but for a limited period of a year, to allow industry to make the transition, a slightly higher rate of 15% will be allowed.

The hon. Member for Wirral South (Alison McGovern) asked about conducting the tests. The key factor is laboratory capacity. The samples go off to accredited labs, and I have no reason to believe that there is a problem with capacity. It is a commercial line of business.

HMRC compliance in general is a wider issue. HMRC cannot be in every operator’s yard at every moment, but it treats all forms of tax evasion extremely seriously and has a statutory duty to ensure that the correct taxes are collected, as well as a direct incentive to do so.

[Andrew Bridgen]

Can the Minister see that the next area of potential tax evasion will be the sampling regime and what samples are taken from a large load of waste?

[Damian Hinds]

There is probably no fool-proof or fraud-proof system of taking samples. People will seek to get around the regime, but the challenge in compliance is to interrupt that activity and stop it. In the past 15 months HMRC has accelerated its response to tax aspects of waste crime. It has a range of responses, including criminal and civil investigations, and the national waste sector task force takes cross-tax approaches.