The Government has defended the fitting of computer chips to wheelie bins, saying the Shipley company which makes them is saving taxpayers money.

Environment Minister Ben Bradshaw said using the devices can also boost recycling which will save local authorities in the long term.

The Microchip technology supplied by PM OnBoard has so far been taken on by about 30 local authorities but Bradford Council decided not to sign up amid fears taxpayers could perceive it as a means to spy on them.

Mr Bradshaw told MPs: "The technology has the potential to measure the amount of non-recyclable waste that householders produce.

"It is used with other systems in other countries that have a differential charging scheme.

"Such a system has been shown to increase recycling and reduce overall waste, thus reducing costs to councils and council taxpayers."

Geoff Mountain, chief executive of PM Group, welcomed the Minister's praise and again reiterated that fears of a Big Brother-style waste monitoring system were rubbish, as the devices were not cameras.

The device holds details of the house address and occupants on a tiny memory chip. Bins are scanned by a radio frequency device fitted on a dustcart and weighed before being emptied and the information recorded.

If the household has bins for recycling, the weight of recycled waste is deducted from the weight of general waste.

He said: "The Government recognises the benefits the chips can bring. Everyone will benefit from the chips.

"Councils can see if people are recycling and they can be rewarded and families which may not recycle as much could be offered incentives.

"The Telegraph & Argus reported that 14,000 complaints had been made to Bradford Council and those relating to people saying their bins had not been collected, could be checked."

Councils are under increasing pressure from government to reduce the amount of waste going to landfill. Mr Mountain said: "The worry is Bradford will fall into the pitfall of not achieving the recycling rates, which at present costs £40 or £50 a ton to process - which I believe will rise to £150 a ton.

"I am not going to advise the Council what it should do but it should listen to what the Government is saying. Everyone benefits and it is win, win, win all round."

It is believed that handing councils the power to charge for rubbish collection could be a key recommendation of Sir Michael Lyons' review of local government finance in England, due to be published next month.

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