Finance (No. 3) Bill (Eighth sitting)

Anneliese Dodds Excerpts

Thursday 6th December 2018 Public Bill Committees

[Clive Lewis]

The hon. Lady makes a good point—

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

It is not that good a point.

[Clive Lewis]

It is a very good point in the sense that the hon. Lady cannot not come down here—I understand that. It is not such a good point about breaking away from the United Kingdom, and independence. However, we understand that she has to make the journey for work purposes.

It is a small minority of people who have to work in the way that the hon. Lady does, but many people now talk about the use of new technologies, and there may come a time, in the near future, when a holographic image of her could be here to represent her constituents. That may soon be upon us—who knows? We have been talking about the impact of technology.

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In terms of how we can use the tax system to tackle aviation emissions, APD is not designed to be an environmental tax. One could use it for that purpose, but it has already been set at a very high rate internationally. I am not clear that there is evidence that further material increases would make a difference. Because of international conventions—the Chicago convention and others, as I described earlier—we are unable to tax aviation fuel or any proxies for fuel. The Government remain committed to engaging actively on this agenda. I can see that the hon. Member for Oxford East is eager to intervene—she and I have discussed this previously.

[Anneliese Dodds]

I am grateful to the Minister for being willing to give way. He will probably remember that I asked for the concrete ways in which Government are engaging with international partners around that convention. I have not received any concrete details aside from the general aspiration to change things. Can he provide some details now?

[Robert Jenrick]

The hon. Lady and I discussed this in a Westminster Hall debate earlier in the year. I believe I wrote to her afterwards to set this out, but perhaps she was not satisfied with the response. I am happy to revert to her with more information, but I made the point in that letter that the UK Government are committed to this, and we play a leading role internationally in discussing the future of the Chicago convention. As I also set out in the letter, several of the leading aviation nations—including the United States and Australia—have limited interest in changing the current regime, which makes it rather difficult to make the kind of progress that I suspect she would like us to make.

[Anneliese Dodds]

The Minister is being generous in giving way. It might help the Committee to know what meetings the Government have called, which Governments they have contacted to discuss the matter and what public pronouncements they have made on the subject. I have been unable to find evidence of any.

[Robert Jenrick]

I will write to the hon. Lady again to set out some of the information. I discussed the matter with my officials in preparing for this Committee, and they listed some of the international meetings they have attended, where they represented the United Kingdom exactly as she would like us to have done.

I hope I have addressed amendment 104 in my earlier comments. This is a matter that the Scottish Government could take forward themselves, given that we have already legislated for the devolution of APD. The impacts of any future reductions in Scotland are a matter for the Scottish Government, and they will clearly become more so once we proceed to the long-term arrangement that the hon. Lady wishes for.

The changes being made by clause 60 ensure that the aviation sector continues to play its part in contributing towards the funding of our vital public services, raising £3.4 billion a year. I therefore commend the clause to the Committee.

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[Robert Jenrick]

Like the hon. Gentleman, I get all the glamorous jobs, so I will endeavour to answer all his questions about landfill.

Clause 64 increases the standard and lower rates of landfill tax in line with inflation from April 2019, as announced in Budget 2017. Landfill tax has been immensely successful. Since its introduction, the amount of waste disposed of at landfill sites has fallen by more than 70%—of course, we would like to go further—and the benefits of that reduction are twofold. The first is to the economy: we have made better use of scarce resources rather than simply tipping them into holes in the ground across the country. Secondly, greenhouse gas emissions from decomposing waste are reduced. When waste is diverted from landfill, we promote more sustainable waste treatment, such as recycling. We are committed to moving towards a more circular economy, and we are working together with business, industry, civil society and the public to achieve that valuable aim. Landfill tax is an important fiscal lever that we can use to achieve it.

The hon. Gentleman asked why the Government are not doing more to meet their recycling target. The Government are very committed to meeting the target of recycling 50% of household waste by 2020. Through the Waste and Resources Action Programme, we are providing guidance and support to local government to help it to improve recycling services and to communicate with householders so that they recycle more. The next milestone in our campaign is the upcoming resources and waste strategy, on which we at the Treasury have been working closely with the Environment Secretary and the Department for Environment, Food and Rural Affairs. That will outline a number of further measures to increase recycling across the UK.

The hon. Gentleman and others will have noticed other important measures in this regard, including the announcement of a forthcoming consultation with respect to a deposit return scheme and other measures in the Budget—for example, a plastic packaging tax, which is to be consulted on, with the aim of increasing the amount of recycled content in all the plastic packaging that we use in our daily lives.

Landfill tax continues to provide an incentive to reduce waste from landfill and ensure it is recycled and reduced: as landfill is the most expensive form of waste disposal, that makes perfect sense. We have also noted in the Budget that we would be willing to consider a future incineration tax once further infrastructure has been put in place to reduce, for example, the amount of plastics that are incinerated, further improving the environment and reducing the amount of throwaway single-use plastics.

The waste infrastructure delivery programme is providing some £3 billion in grant funding over its lifetime to a number of long-term local authority waste management projects, which has helped to increase recycling rates from 36% in 2008 to 45% in 2017. I hope the hon. Member for Norwich South will await the future resources and waste strategy, which will provide a number of important measures. Those will include further information on the reform of the producer responsibility system, which will play a crucial role in improving recycling capacity and infrastructure in all parts of the country.

The clause also changes the tax on disposal at landfill sites. Each tonne of standard-rated material is currently taxed at £88.95, and lower-rated material draws a tax of £2.80. Those rates per tonne will change to £91.35 and £2.90 respectively from 1 April 2019, which maintains the strong current signal to move waste away from landfill.

Amendment 130 would require a review of the revenue effects of the proposed changes. HMRC published tax information impact notes when the rates were announced at the autumn 2017 Budget.

[Anneliese Dodds]

As far as I understand it, that note did not look into the impact of differential tax rates on waste crime. The picture is very worrying: the number of illegal waste sites that the Environment Agency is dealing with had risen to 1,485 at the end of 2017-18, compared with 1,425 the previous year. The number of those illegal waste sites that were active had also risen—to 673—and there were eight fires at those sites last year, so why is the Minister not considering those factors? Surely a broader review is necessary.

[Robert Jenrick]

The hon. Lady raises an important question about waste crime, which affects many constituents across the country, including my own. We have taken a number of significant steps. The Secretary of State for Environment, Food and Rural Affairs has conducted with the Home Secretary a review of waste crime, which looked at many of these questions—I believe that review was published recently. We also included a measure in the Budget whereby local authorities, or those responsible for clearing up illegal waste sites, could receive support from the Treasury to enable them to do so if the site met certain criteria, essentially providing support equivalent to the cost of the landfill tax itself. A number of hon. Members from across the House approached us to ask for that support, and we have delivered it as a £10 million pilot.

[Anneliese Dodds]

I am very grateful to the Minister for giving way. However, in the previous Budget, landfill tax was applied to illegal waste sites, so surely that measure is more than a pilot. As I understand it, it came into practice in April this year, because I have been trying to find out whether or not it has been applied to any sites. Surely that money should already be coming into the Exchequer?

[Robert Jenrick]

Perhaps I did not explain myself correctly to the hon. Lady. The measure that she speaks to was in the Budget last year, and has since been implemented via a statutory instrument that went through the House. That measure ensures that the landfill tax is payable on illegal waste sites. The measure that we have included in the Budget enables innocent parties—local authorities that take on, and wish to clean up, a site that has been left by criminals—to apply through the Environment Agency as part of the pilot for a sum of Treasury funding equivalent to the landfill tax, instead of having to pay that tax in addition to all the other costs involved in cleaning up the site. We hope that that will help local authorities with sites that are among the worst and most dangerous to public health to meet the costs of doing so. That measure was requested by a number of Members from across the House.

[Anneliese Dodds]

I am very grateful to the Minister for giving way yet again. Surely Committee members are scratching their heads and thinking, “Would it not be more efficient and effective just to fund the Environment Agency properly so it can actually do some prosecutions, rather than going through this very complex system?”

[Robert Jenrick]

We do fund the Environment Agency correctly, and it is stepping up its enforcement of these sites. We urged it to do so—that was part of the purpose of the waste crime review. We have also increased the powers available to local authorities. For example, since May 2016, they have been able to issue fixed penalty notices for smaller scale fly-tipping. Fly-tipping is a criminal offence punishable by a fine of up to £50,000 or 12 months’ imprisonment. We wish to see more successful prosecutions, because this is a significant area of criminality that is linked to serious organised crime and other important types of criminality, such as the drug trade and human trafficking, against which we wish to take serious action. That is why fly-tipping was included in the Government’s review of serious organised crime in the waste sector, to which I have already referred.

Amendment 131 seeks to review the effect of these changes on the Government’s ability to meet the waste framework directive target of recycling 50% of waste by 2020, and amendment 132 seeks to review their impact on the amount of waste exported for treatment abroad. As the clause maintains the rates of landfill tax in real terms, we do not expect significant changes to the strong behavioural incentives the tax already provides. Landfill tax continues to play an important role in our meeting our targets for recycling and encouraging alternative forms of waste treatment, and the clause will ensure that landfill remains the most expensive form of waste treatment. Furthermore, I assure the Committee that the Government are committed to meeting the 50% household waste recycling target through the Waste and Resources Action Programme and the upcoming resources and waste strategy, on which we at the Treasury worked extremely closely with the Department for Environment, Food and Rural Affairs. I hope the Committee sees that amendments 131 and 132 are therefore unnecessary.

Amendment 133 would require a review of the expected effect of these changes on the quantity of waste that is sent to landfill. The uprating of landfill tax rates in line with the retail prices index ensures that those rates remain stable in real terms, and means that the tax can continue to help the Government meet their objective. Figures published regularly—annually, I think—by Her Majesty’s Revenue and Customs show a consistent decrease in the amount of waste sent to landfill as a result of increases to the capacity of alternative waste treatment, such as recycling, which is encouraged by our policy on landfill tax rates. As the clause will keep the rates the same in real terms, that decrease is expected to continue. I trust that provides the Committee with sufficient information, and I ask that amendment 133 not be pressed to a vote.

Amendment 134 would require a review of the expected impact on the environment of increasing the difference between the standard and lower rates of landfill tax. The clause seeks to increase landfill tax rates in line with inflation. That is the equivalent of maintaining the rates in real terms, which means there will be no real-terms change to the difference between the standard and lower rates. Although we appreciate there may be concerns about illegal dumping or breaking of the rules, we do not anticipate the clause making any material difference to those. The issues the hon. Member for Norwich South legitimately raised about individuals or companies dumping waste on which the higher rate should be paid, and seeking to pay the lower rate, are exactly the kinds of matters that were considered in the waste crime strategy. I hope that reassures the Committee, and I ask that amendment 134 not be pressed to a vote.