Government rejects circular economy recommendations

THE MEMBERS of the Environmental Audit Committee (EAC) have accused the UK Government of burying its head in the sand, after its recommendations on circular economy were rejected.

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In its report on how to create a more ‘circular economy’, published in July, the cross-party Committee called for lower VAT on recycled products, a phased-in requirement for new products to be recyclable and greater standardisation of waste collection services, including a ban on food waste being sent to landfill.


In the UK, more than a third of food waste currently goes to landfill where it produces methane – a potent greenhouse gas. The MPs point out that this waste could instead be used in anaerobic digesters to produce biogas for energy or fuel and fertiliser for our farming system – creating value from waste.


However, the Government argued that because European law governs VAT, any reliefs from VAT are strictly limited and there are no specific provisions that allow actions to encourage the use of recyclable materials. The EAC believe that as other Member States are allowed to implement a reduced rate of VAT on certain goods and services and pointed out that the UK has previously reduced VAT rates on new build construction materials, energy and the professional installation of energy saving products.


The Environmental Audit Committee Chair, Joan Walley MP, said: “The disposable society simply isn’t sustainable in the twenty-first century. Innovative companies in the UK, like B&Q and M&S, recognise this and are already demonstrating that using resources less wastefully is the future of business. Yet our Government seems to have its head in the sand and is refusing to take basic steps to reduce the amount of food and resources we waste.”


“If the Government is unable to introduce differential VAT rates on recycled products under existing arrangements, Ministers should make the case for a change in the rules at an EU level as part of the discussions due to take place on the Commission’s Circular Economy proposals.”


“Breaking the link between primary resource use and economic growth is essential if we want to create a truly sustainable economic system that can cope with rising global demand and population growth. It is possible, and many businesses are showing real leadership in becoming more resource efficient. However, we need the Government to create a framework where companies and consumers are rewarded for doing the right thing. The tax system should be used to incentivise products that are designed to have a lower environmental impact and support greater repair and re-use. Materials and products that cannot be recycled should be phased out altogether.”