The Budget and you: Green Taxes: New move to curb amount of waste going to landfill sites

The price of garbage dumping is to rise drastically - part of a range of eco-tax measures introduced by the Chancellor yesterday.

His most radical green proposal was a special energy tax for industry which could raise billions while cutting climate-changing greenhouse-gas emissions. It is, however, only a gleam in Gordon Brown's eye.

Yesterday's speech continued the pattern set by his Tory predecessor, Ken Clarke - slow, cautious progress in introducing eco-taxes which left environmental groups deeply disappointed after the pre-budget hype.

They were none the less delighted with his decision to cut the price of a tax disc on smaller, cleaner cars by pounds 50, a move which headed a package of green transport tax changes.

From April next year the tax on each tonne of garbage dumped at landfill sites jumps from pounds 7 to pounds 10 - the first increase since this tax was introduced nearly three years ago. Since it now costs, on average, about pounds 20 a tonne to landfill rubbish - including the tax - this represents a hefty 15- per-cent increase in dumping costs.

The Environmental Services Association, representing the majority of Britain's waste companies, said the increase would be passed on to its customers; the firms and hundreds of councils which collect and dispose of household rubbish. Inevitably this will create pressure for council- tax rises.

The Treasury argues that the tax hike will encourage companies to recycle more wastes, or find ways of producing less. But the association said there had already been a noticeable increase in fly-tipping - illegal, roadside waste dumping - since the tax came in. This was bound to get worse unless there was stronger enforcement by the Government's underfunded Environment Agency.

The tax on "inert" wastes, which do not rot and produce methane gas - such as construction rubble - remains at the lower level of pounds 2 a tonne. The money raised by the tax - which will increase to pounds 500m a year - is used to fund a small cut in employer's National Insurance Contributions and a variety of local environmental improvement schemes. Mr Brown also announced the creation of a task force, headed by British Airways chairman Sir Colin Marshall, to examine use of "economic instruments" such as taxes and subsidies in cutting energy wastage by businesses.

In burning gas, oil and coal, industry and commerce makes a huge contribution to Britain's annual emissions of climate-changing carbon dioxide - emissions which Labour's manifesto promised to cut by 20 per cent by 2010. Sir Colin, a former president of the CBI, will head a task force of civil servants and business people. His appointment was attacked by Friends of the Earth director Charles Secrett, who said: ``It's like putting King Herod in charge of child care.''

The aviation industry, of which Sir Colin is one of the world's leading lights, is a huge and fast-growing source of climate-changing greenhouse gases. It is not covered by the Kyoto Climate Treaty negotiated last year and it has strongly - and successfully - resisted calls for an international green tax on currently completely untaxed aviation fuel.

Environmentalists were also disappointed by the Budget's limited cut in VAT on energy- saving goods. This will only apply to low-income households being offered home-insulation packages under government-funded schemes - about 40,000 a year.

For the great majority of the population, VAT on low-energy light-bulbs, cavity-wall and loft insulation and other energy-saving, polluting-cutting products remains at 17.5 per cent - while VAT on gas and electricity is just 5 per cent.