Official Report 629KB pdf
Scottish Landfill Tax (Standard Rate and Lower Rate) Order 2026 (SSI 2026/97)
The next item on our agenda is an evidence session with Ivan McKee, the Minister for Public Finance. The minister is joined by two Scottish Government officials: Jonathan Waite, aggregates tax bill team leader, and Ninian Christie, who is a lawyer. I welcome you all to the meeting and I invite the minister to make a short opening statement. Good afternoon, minister.
Thank you, convener.
The Scottish Landfill Tax (Standard Rate and Lower Rate) Order 2026 sets the rates of Scottish landfill tax that will apply from 1 April 2026. These rates are fully consistent with those announced in the Scottish budget 2026-27, as published on 13 January.
The order provides that the standard rate will increase from £126.15 to £130.75 per tonne. The lower rate, which applies to less-polluting inert materials, will increase from £4.05 to £8.65 per tonne. The updated rates reinforce the Scottish Government’s commitment to our circular economy and climate ambitions by strengthening the financial incentives to reduce landfill and to support more sustainable resource use.
I am happy to take any questions.
I have one question, and it is probably one that you would anticipate—I have certainly asked it before. When is the Scottish Government going to decouple from the United Kingdom and have either higher or lower rates, depending on what is in Scotland’s interests? It seems an almost lazy way of doing it, just to copy the UK on the basis of a myth that, if the rate is a pound higher or a pound lower, truckloads of waste will get shipped over the border. I do not think that there is any evidence for that.
There is clearly a point at which that becomes an issue, but we would not expect it to be an issue at lower levels. This year was a bit specific, if I can put it that way, in how the process worked out. The UK Government consulted on landfill tax and had produced proposals for combining the two rates over a number of years. Under those proposals, the lower rate would have increased substantially over a number of years to eventually match the higher rate.
When the UK Government published its budget, which was quite late on, as you know, it did not go ahead with that proposal; it reversed its decision. Instead, it decided to increase the lower rate by more than 100 per cent from what it had been in the previous year. Clearly, that gave us not very much time to reflect on what the UK Government had initially proposed to do, which is what we thought it would have done in its budget, and on what it decided to do, which was to make what was still a significant increase.
Given the number of moving parts at that stage, we decided that it made sense to see what the levels looked like this year, with a view to making some considerations in relation to the direction of travel of the UK rates when deciding what to do for next year.
It is not that we are not listening to what you are saying, but the way that the UK Government moved on the matter made it difficult for us to make a sensible assessment of the impact of any changes.
I am not convinced that that would be particularly difficult. There have been years in which to get this right, if we are honest. I would have thought that the rate would be set at the optimum level for Scotland, rather than just saying, “We’ve only had a few weeks to think about it.” Surely you have had the whole of last year to think about it. Whether the UK puts the rate up by X or Z, we should be setting the rate at Y, if that is in Scotland’s interests.
If the UK Government had been on the trajectory that it had initially proposed, which was to match the two rates over a short number of years, there would have been significant increases in the UK rate, far in excess of the changes before us. For us to have put our rates up by even more than that would have required serious consideration. The fact of the UK Government being on that trajectory would have meant that the gain in the Scottish context would have been minimal.
The fact that the UK Government changed to a different mechanism at the last minute, which we had not expected, meant that we could potentially have put something on to that rate. We considered whether it was worth doing that but, given that it was going up by more than £4—that the UK Government was implementing a scale of increase of more than 100 per cent—we thought that, on balance, it made sense to wait and see how that settled out before we made any other changes.
Have you spoken to the UK Government about getting earlier sight of such changes in the future?
We are constantly engaged with the UK Government on getting earlier sight of all manner of things, including this.
But not this.
Including this. We are obviously keen to get earlier sight of any changes that the UK Government makes in this regard. It will go through quite a tight process in what it is announcing in its budget process—or at least we would expect that. Given the indications that something different was going to happen, we had not anticipated the change to the model that we are now considering in the budget process.
Thank you very much for that. No colleagues have indicated that they wish to ask questions. We therefore turn to agenda item 4, which involves formal consideration of the motion on the instrument. I invite the minister to move motion S6M-20861.
Motion moved,
That the Finance and Public Administration Committee recommends that the Scottish Landfill Tax (Standard Rate and Lower Rate) Order 2026 (SSI 2026/97) be approved.—[Ivan McKee]
Motion agreed to.
We will publish a short report to the Parliament, setting out our decision. That concludes our deliberations on the instrument. Thank you very much, minister.
12:27
Meeting continued in private until 12:30.