Household waste recycling has quadrupled in the last 10 years and waste is growing much less quickly than the economy. Business has also been increasing its effort to reduce the amount of packaging it puts around the products that we buy. Last month we announced proposals for increased targets for recovery and recycling of packaging for 2008-12. In 2012 we now hope overall to see producers recycling and recovering 66 per cent. of all paper and 65 per cent. of all glass packaging.

But we need to do more. Methane emissions from biodegradable waste in landfill count for about 3 per cent. of UK greenhouse gas emissions. We still lag behind much of mainland Europe in recycling and we will face EU fines if we exceed landfill limits.

In May, we announced a revised Waste Strategy for England. It set out new ways for us all to reduce, reuse and recycle our waste for the sake of the environment. Incentives appeared as part of that strategy and we consulted on possible schemes to help local authorities influence residents' behaviour at a local level. These schemes were similar to those that had been successful in both Europe and in North America. The UK is currently the only EU15 country that prevents authorities from trialling or putting in place these type of incentives schemes. The Local Government Association and local authorities from across the political spectrum have called for powers to introduce similar schemes.

Following on from the consultation, we announced in the Climate Change Bill Command Paper that we would provide in the Bill a power for a small number of local authorities to pilot incentives for household waste minimisation and recycling. I am today announcing the detail of these proposals, which for the first time will mean that authorities will be able both positively to reward those who recycle and charge those who do not.

A maximum of five local authorities will be granted permission to pilot the schemes. Councils will be able to come forward with schemes to fit local circumstances but they will have to be approved by my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs, and will need to be consistent with the framework set out in legislation. This approach will allow us to monitor the impacts of the pilots and report back to Parliament before a decision is made whether to roll them out more widely. Parliament would have a say in any final decision.

The framework covers a range of issues. First of all, since we are keen to avoid placing additional burdens on local residents, it says that if the authority collects any revenue through a scheme this must be returned to residents so residents as a whole will not be paying more. To further reduce the burden on both the public and local authorities, we are also enabling authorities to pay back rebates, and collect any payments, through Council Tax, should they wish to do so.

We have also built in further simple checks and balances to help ensure the right level of public protection. These are not about restricting local authorities' behaviour, as we continue to believe that they are in the best position to understand what is right for their area. Instead they are about helping the public to understand better what they might expect to see in a pilot scheme regardless of where they are in the country. For example, pilots could only be introduced where there was a good kerbside recycling service in place, and we ask that authorities take account in their plans of the needs of, or impacts on, potentially disadvantaged groups - for example young families. We also think that it is sensible for pilot authorities to review their policies for tackling flytipping, and to have a flytipping prevention strategy in place. Evidence from other countries where financial incentives schemes operate suggests that an increase in fly tipping is not an automatic consequence of introducing them, but having a strategy in place is good common sense. Government intend to retain a reserved power to create a cap in the future on the level of incentive, should this be necessary. We consider that this power provides a further protection for households.

Climate Change means that each of us needs to look at what we currently do and think hard about what more we could do both inside and outside the home. This includes working together to reduce the amount of waste we generate. Our plan for incentives for waste fits into this.

To support this work on guidance and pilots, the Government will be making £1.5 million available every year for the next three years.

Copies of the summary of consultation responses and impact assessment have been placed in the Libraries of both Houses. The documents are also available on the website of the Department for Environment, Food and Rural Affairs at: www.defra.gov.uk.