Pay-as-you-throw rubbish charge really IS a tax, admits minister

After months of insisting rubbish bin bills must be called incentives, charges or rewards, Joan Ruddock acknowledged that, in reality, they are taxes.

The Environment Minister's confusion appeared to betray uncertainty and chaos in the Government over pay-as-you-throw, which is due to be tested in five areas.

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Pay-as-you-throw has already brought embarrassment to Gordon Brown. Downing Street tried to kill off the idea in October, but failed to stop ministers at the Department for Environment, Food and Rural Affairs going ahead with their trial runs.

The charges will mean families which fail to recycle enough rubbish will be charged extra by their council for having their bins emptied.

Those who do recycle rubbish - and advance Labour's hopes of meeting EU targets for cutting refuse sent to landfill - are likely to get council tax rebates.

The charges have always been referred to in Whitehall as ' incentives' and ministers are keen to avoid use of the word 'penalties'.

Mrs Ruddock's admission came after she had spent several minutes explaining to MPs of the Communities and Local Government select committee why pay-as-you-throw charges are not a tax.

The point of a rubbish incentive scheme, she said, was that those who failed to carry out the 'simple task' of meeting 'norms' for recycling would face charges.

She added: 'It is definitely not a tax.'

However, Mrs Ruddock then conferred with officials and offered MPs a different version.

' I have just been told that technically these charges are regarded by the Treasury as a form of tax,' she said.

'I think I may have been mistaken.'

DEFRA has suggested those who fail to recycle enough may face charges of £30 a year.

Mrs Ruddock confirmed the widespread assumption that this figure is too low when she told MPs that charges and rewards may be 'higher'.

However, she said the Government will keep capping powers over the scale of pay-as-you-throw charges in order to 'give confidence that this will not be a stealth tax'.

The minister declined to name any of the councils which have offered to take part in pay-as-you-throw trials.

She said 14 have expressed interest, but she added that different boroughs may eventually get the go-ahead.

The trial projects will not start before April 2009.