Waste Not, Want Not found wanting By Jon Reeds

For all its importance, the launch of the Cabinet Office Strategy Unit's report on sustainable waste management was a curiously low-key affair.

After a 12 month gestation, the report that began life with the Performance & Innovation Unit - before it got the shorter, snappier title - finally came out on the internet, overshadowed by the concurrent launch of the Chancellor's pre-budget report.

And because Gordon Brown had already converted many of the report's recommendations into Treasury proposals, he ensured his own department got much of the mostly favourable comment the report engendered.

Assessing the impacts

So what difference will Waste Not, Want Not make to UK business? Perhaps the most obvious change will be to confirm a long-term increase in waste disposal costs, with its proposal that the Landfill Tax, presently £13/t and rising by £1/t/year, should increase by £3/t/year from 2005-6 until it reaches £35/t. This is just a proposal, but it is supported by the waste industry, environmental groups and the government, so it is almost certain to feature in next year's Budget.

One group that didn't respond favourably was business, and with the gathering crisis in manufacturing it may prove to be a voice government can't ignore. The Confederation of British Industry (CBI) said it is considering the proposals, but estimates the overall increase in the tax burden between 1997 and 2005 will be £4.7bn. This, it believes, is starting to erode the tax competitiveness of the UK, and hence investment.

"Business wants to make a constructive contribution to the environment," a CBI spokesman said. "We're not opposed to the Landfill Tax, but we question the government's record on environmental taxation."

The CBI pointed out that the report accepts the need to design taxes that achieve environmental benefits but don't damage competitiveness. It said the government's record on this is patchy - citing the Climate Change Levy as an example - and although the report is a good starting point, business is sceptical about the Chancellor's protestations that raising the tax would be revenue neutral. "What is business going to gain?" asked the CBI.

Flaws in the plan

What indeed? For if there is a glaring weakness in the report, it is its focus on household waste rather than business waste - which accounts for 75% of the UK's controlled waste. Industry needs more help to drive waste minimisation, but doesn't have a vote - householders do.

This point did not elude Environment Agency chairman Sir John Harman, who told a recent conference that the thinking should be broadened beyond the report's spotlight on household waste. "We think the first real crunch is coming in industrial and commercial wastes - especially hazardous wastes," he warned.

The report's recommendations confirm the emphasis is firmly on household waste. Certainly it is one of the most challenging waste streams: mixed, unpredictable and rising by 3%/year.

The government's anxiety not to hit economic growth is evident from the report's target merely to reduce it to 2% and to keep it below the rate of economic growth. But the continued rate of growth means greater diversion from landfill.

Commercial waste

But although most of the report's specific recommendations concern domestic waste, there are themes that target the more important commercial sector. "The proposed strategy in this report puts waste reduction and recycling at its core," it says. It states that there needs to be a robust long-term economic and regulatory framework, medium-term measures to make waste management more sustainable and extra funding coupled with reform of delivery structures.

This will include further work on planning - a study of the health and environmental effects of various waste options is planned. This is a roundabout way of saying that yet another attempt will be made to convince Greenpeace and Friends of the Earth that their campaigns against waste-to-energy are misplaced.

If the waste strategy as currently envisaged (and funded) is ever to work, this will have to succeed. Modern incinerators may have some of the lowest health risks of any of today's industrial plants, but when protestors are still prepared to turn out in their hundreds on a cold night to oppose them, it is clear that changing people's minds will take a lot more than a barrage of facts.

The economic and regulatory reforms proposed include the rise in landfill tax and powers for local authorities to give rebates to householders who recycle. But the report also complains that waste is often the result of poor product design and inefficient processes. It recognises the huge effects EU producer responsibility initiatives are having, but the discredited deregulatory atmosphere of the 1990s, which saw disastrous attempts at voluntary producer responsibility, obviously still clouds the Cabinet Office.

"Rather than add more regulation, this report recommends additional voluntary agreements with manufacturers," it says. "For example, by increasing [sic] the viability of their products." It also recommends consideration of financial incentives like reduced VAT on recycled products or tax levies on harmful items. On the investment front, it recommends more waste research and the development of alternative technologies. It seeks expansion of home composting and kerbside recycling and calls for more spending on WRAP and Envirowise's waste programmes.

Reducing waste at source

Harman pointed out that a stronger focus on minimisation is essential if the strategy is to have any chance of working. He promised to use the Agency's regulatory role to reinforce the message about it being at the top of the waste hierarchy.

"It often makes economic sense," he says. "It certainly makes environmental and safety sense; but we don't reach all corners of the business world. We need more clarity on who does what in waste minimisation, how this can be stepped up and how it could be resourced."

He also pointed out the fact that the Agency will have fewer resources to put into minimisation just as it is needed.

Nevertheless, he committed the Agency to investing more of its resources in waste, which might include twin-track planning and permit applications. He said that shared responsibility should also extend to businesses and suggested batteries and mineral oils as future areas for producer responsibility.

"Implementation of European producer responsibilities at the last possible moment doesn't have to be the only answer," he says. "We should consider further statutory and voluntary UK-only schemes."

The report's third leg is reform of delivery structures. This includes an operational task force to harmonise policy and implementation and a forum to help government and the waste industry work together. It also includes shifting two-thirds of nearly £150m/year in Landfill Tax Credit Scheme revenues from environmental good causes into recycling and composting.

The Chancellor included this in his own proposals and it has strong support in some environmental circles, despite the fact it will hack nearly £100m/year out of community-based bodies like Groundwork and wildlife trusts.


But will it make any real difference to delivery of the waste strategy? The Environmental Services Association (ESA) looked at European countries where recycling levels are higher and found France spends twice as much on its waste, Holland two-and-a-half times and Sweden three times.

To reach this kind of waste management, the UK would require 1,400 and 1,500 major new facilities and revenue spending would have to rise. The ESA estimates that the UK will need to double the existing annual £1.5bn spend on the municipal waste stream alone. "If you need to double investment, an extra £100m hardly scratches the surface," says the ESA's Mike Walker.

Of course, a substantial hike in the landfill tax will bring in substantially more revenue. But this is a mixed blessing for the government. If it succeeds in its aim of a rapid diversion of waste from landfill, this increase will be short-lived - the money will only keep rolling in if it doesn't work.

The Chancellor continues to toy with the idea of an incineration tax, but says this will only be introduced in the light of the proposed health and environment study. But what will Brown do with all the extra landfill tax cash, even if it doesn't last?

"The government's intention is that increases will be introduced in a way that is revenue neutral to business as a whole," says the pre-budget report. "The government will consult with stakeholders on the package, including the recycling of revenue, before making its decisions."

Most people have already forgotten that 80% of landfill tax revenues are already hypothecated - to reducing employers' National Insurance (NI) payments. Given Brown's newly discovered fondness for NI as a source of cash, maybe he plans more of the same.

But whatever he does, one thing is clear. There has never been a better moment to invest in waste minimisation. You can't afford not to.

Further information: Waste Not, Want Not is available at www.strategy.gov.uk/


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