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Lords call for variable VAT to cut landfill

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The House of Lords Science and Technology Committee has said the government should do more to encourage businesses to recycle and reduce waste and take the focus away from householders.

Recent attempts to reduce domestic waste by weighing dustbins and banning carrier bags should be scrapped in favour of changing the VAT regime so British firms do more to tackle waste. But British "throwaway" society also needs to be addressed, the Lords said.

Witnesses told the committee that consumers were often confused about the overall environmental impact of products, for instance focussing on packaging which usually makes up only a small part of the total enviromental impact of a product.

In its sixth report the committee accepted that the landfill tax is useful to counter business waste, but also recommends changes to VAT to encourage more sustainable products.

There is an acceptance that creating sustainable products can be against the interests of a business based on selling replacements. It suggests continued work with the EC to promote "eco-labels"; this would help consumers who have been distracted by heavy promotion of recycling instead of waste reduction.

Businesses should see waste reduction as an opportunity - Enviroment Agency figures from 2003 showed UK firms could save between £2bn and £2.9bn if they followed best practises for cutting waste.

The Lords said they were disappointed at recent funding cuts for organisations which support businesses in reducing waste, such as Envirowise and the Market Transformation Programme. It called for part of landfill tax revenue to be ring-fenced for use in reducing waste.

The government should also lead by example and improve training of its own procurement officers, so they look at the lifetime costs of the products they buy.

The committee also called for "choice editing" - essentially removing less environmentally-friendly options from shops. This is already in use for certain products - you can only buy "low-energy" lightbulbs for example - but the Lords support its wider use. ®

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