ESA calls on Government to reveal future landfill tax plans

The Environmental Services Association (ESA) has called on the Government to reveal its plans for the future of landfill tax beyond 2015, ahead of Wednesday's Budget.

Landfill tax is due to increase to £80 per tonne this April. It is the latest in a long line of increases since the introduction of the £8 environmental tax by John Selwyn Gummer in 1996, designed to encourage waste producers to produce less waste or recover value from their waste.

In a statement, the trade body that represents the UK’s waste and resource management industry that the landfill tax escalator had done an “excellent job in signalling future rates to the industry, and allowing investments in alternative infrastructure to be planned in advance. However, this is coming to an end and we now need clear direction from the government on the future for landfill tax. This is crucial”.

In the Coalition Government’s Budget of 2010 George Osborne established a floor for landfill tax, declaring that the tax per tonne will not drop below the £80 mark until at least 2020.

ESA economist Jacob Hayler said: “The Budget comes this year following a challenging few years for the UK’s waste and resource management sector. In its 2013’s Circular Economy report, ESA estimated that the introduction of measures to unlock a circular economy could stimulate £10 billion in investment in the UK’s waste and resources infrastructure. But this will only be realised if the industry is given the certainty it needs to make those investments.”

The ESA outlined other specific areas it would like Osborne to look at in this year’s Budget. It said that recent reports have highlighted the blight caused by waste crime, which costs the UK up to £800 million each year. Hayler said: “This undermines investments made by the legitimate industry, and the Chancellor should use his Budget to signal additional resources for the Environment Agency, and relevant Government departments, to combat illegality in the waste and resources sector.”

The trade body added that the waste industry is well placed to invest in new facilities, creating green jobs and boosting local economies. Hayler said: “Provisions in the Budget to help underpin new infrastructure investment, such as new tax allowances, would be a great help. Now that the economy is starting to turn for the better, tax breaks for businesses would help stimulate the private sector even further.”

Elsewhere, Closed Loop Recycling chief executive Chris Dow called on the Government to announce an increase landfill tax.

He said: “From a recycling industry perspective, we would like to see the Chancellor announce an increase in landfill tax and indeed a commitment to a longer term strategy on landfill tax levels, in order to create some stability in the industry and confidence among investors.

“We certainly believe that landfill tax should increase at least in line with inflation and the formula should be fixed until, say, 2020 in order to provide confidence and certainty to potential investors in recycling and reprocessing infrastructure.

“Additionally, we are reiterating our call for PRN reform which creates a more level playing field for UK recyclers. The current system encourages exports of precious waste resource rather than supporting the domestic market.

“We are also supportive of any announcement by the Chancellor to review business rates to make businesses more competitive. However, funding remains an issue for many small- to medium-sized businesses and we are calling on the Government to continue to push the banks to lend more. As a business we have big expansion plans – indeed we’ve just completed a £12 million investment in new recycling infrastructure at our plastic bottle recycling facility. But as many businesses like ours are finding, bank funding is not readily available as is needed to drive the UK economy forward.”

Liz Gyekye

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