Eric Pickles has announced that he will abandon plans to charge people for their use of waste collection services (the "bin tax"). He will use the "carrot" of rewarding people with vouchers for the volume of recyclable material they produce, rather than the "stick" of charging them for the amount of waste they produce.
Mr Pickles justified this announcement as part of an effort to end "meddling" laws. (The other example of "meddling" that he planned to scrap was allowing people to choose whether to apply for redevelopment of their land.)
The move was also justified because charging people for their use of waste-disposal services would result in more fly-tipping and "bin wars".
And it was argued that the move would save money, because of avoided landfill tax (directly) and thereby European fines (indirectly).
Meanwhile, David Cameron was today warning people how much worse the government finances are than he had expected (for which, read: as bad as he knew they were but didn't dare to tell people during the election).
And let's not forget the great theme of this government: decentralisation.
Let us count the number of ways this is wrong:
- Waste collection is a service. Services cost money to provide. Consequently, we pay for services. Preferably, we pay businesses, not councils. If Mr Pickles really wants to end meddling, he would privatise the contracting of waste collection.
- Failing that (and there would be some efficiency trade-offs in that radical option), he would encourage councils to pass on to consumers the costs that are incurred in providing the socialised service, to ensure that people are exposed to the true price signals as far as possible. Encouraging councils to reward people for particular forms of waste management favoured by Mr Pickles is the most meddling of the options available, not the least.
- Recycling produces products of varying value. It may or may not reduce carbon. It reduces the amount of waste going to landfill. As some of the alternative waste-disposal technologies convert waste to energy, recycling may be less effective at reducing carbon than the alternatives. To the extent that the products have a value, that value should be passed up the "supply chain", as far as the waste producer, where the value can be used to reduce the charge for disposal, or even to pay the waste-producer if the value is sufficient. To the extent that the recycling option avoids carbon-emissions more or less effectively than other alternatives, it should be attributed a carbon value, and that value should also be passed up the "supply chain". To the extent that the recycling option avoids the social cost of landfilling, planning authorities should apply that cost to landfills in the form of business rates and/or landfill tax, the avoided cost of which should be passed up the "supply chain" (and the lost revenue to authorities with landfills within the boundary will conversely increase the taxes that have to be applied in other ways). If we had rational carbon-pricing and planning laws, this combination of values would represent the full value of recycling. Whether people chose to recycle would depend on whether the value (reduced disposal cost or actual payment) was sufficient to reward the inconvenience of recycling. Some goods (like metals) would probably be recycled in this rational world. Others (like paper, which would be better used as fuel) would not. It would depend partly on circumstance such as location relative to centres of demand for the recycled products and market values of the products. This is the "non-meddling" option. Mr Pickles' solution - to subsidise one waste-disposal option for a whole range of materials regardless of circumstance and efficiency - is quite the opposite of the real "non-meddling" option.
- The plan to charge people is labelled a "bin tax" partly because they hope to contrast a tax ("bad thing") with a subsidy ("good thing"). In fact, it is likely that an untargeted tax is better than a targeted subsidy in most situations, given how rarely government targeting is based on sound philosophy, adequate information, meaningful experience and insight, and impartial, altruistic judgment unaffected by the lobbying, rent-seeking efforts of the major players in the sector. But in any case, the "bin tax" is barely a tax, in the sense that it would simply be a charge for a service if it were not within a state-controlled activity. Conversely, what, if not a tax, do they think is going to pay for their carrot/subsidy?
- Let's apply the fly-tipping argument to other areas to see what would happen if we ran our society and economy by this logic more generally:
- Charging people for electricity encourages some people to try to short-circuit the meter, with harmful potential effects to themselves and others. We should adopt the carrot rather than the stick approach and reward people who submit to metered supplies.
- Charging people for consumer goods leads some people to shop-lift. We should adopt the carrot rather than the stick approach and reward people who go to the till with the goods they require.
- Charging people for waste-water collection may lead some of them to try to do without, causing pollution and health risk on their land, and distress to their neighbours. We should adopt the carrot rather than the stick approach and reward people who flush their waste water down the mains sewer.
- Charging people for cars leads some young people to joy-ride. We should adopt the carrot rather than the stick approach and reward young people for using cars that they have legal rights to use.
- Charging people for car insurance leads some people to do without, causing harm to others in the case of uninsured accidents. We should adopt the carrot rather than the stick approach and reward people who renew their car insurance.
- Charging people to use the train leads some people to dodge fairs, contributing to over-crowding and under-funding on the railways. We should adopt the carrot rather than the stick approach and reward people who buy tickets for the train, particularly as we approve of that mode of transport so much more than car-use;
and so on... It's absurd, but no more absurd than the idea that we should avoid charging people for waste-collection services that cost money for fear of people trying to avoid the charges, and rather than impose and enforce laws against the anti-social behaviour of fly-tipping, bribe them instead to be good citizens.
- The claim that this saves money only stacks up if you ignore the costs of complying with the EU Landfill Directive and native legislation favouring recycling. Without this legislative inefficiency, very little material would be recycled (perhaps some metal) and our overall costs of waste disposal would be much lower. The legislation does not make recycling economically efficient. It makes it mandatory to employ inefficient techniques (if it really were the most economically-efficient solution, there would be no need to legislate to oblige people to do it). All measures aiming to encourage increased recycling in order to avoid the penalties imposed by dirigiste recycling legislation are not saving money, they are supporting the waste of money created by the policy. The apparent saving is not set (in the Government's rhetoric) against the overall increase in waste disposal costs resulting from the policy. By avoiding landfill tax and EU penalties, costs are a little lower than they would be if we did nothing to comply with these senseless interventions, but they are much higher than if we did not impose the interventions in the first place.
- If government finances are tight, which they certainly are, paying people for approved government behaviour, rather than charging them for their use of a service is hardly going to help the budget.
- If the Tories really believe in decentralisation, what is Mr Pickles doing telling councils how they should charge for their waste-collection services?
But apart from that, it's a great policy, well-justified by an intellectual giant of the new government.
Why doesn't he just come out and say what we all know to be the real motivation behind this: it is a green-tinged sop to the core Tory, NIMBY vote. Justifying an increase in government-meddling on the grounds that it is reducing government-meddling is an insult to the intelligence and the English language.