Manufacturers call for £200 landfill tax by 2020


Seven manufacturing organisations representing the plastics, rubber, coatings, and associated machinery and tool making sectors, have written an open letter to Chancellor George Osborne calling on him to increase Landfill Tax to £200 per tonne by 2020 to ‘drive recyclable waste from landfill’.

The letter from the Seven Association Alliance (SAA), which is coordinated by the British Plastics Federation (BPF) and collectively represents 6,100 companies, was sent to Osborne ahead of the upcoming March Budget statement.

It comes amidst increasing concern over the future of Landfill Tax, as last year’s Budget made no mention of whether it would continue to rise past the 2014/15 rate of £80 a tonne – despite the Office of Budget Responsibility estimating that revenue from Landfill Tax will rise from £1.5 billion in 2014/15 to £1.6 billion in 2015/16.

Further, the spending review outlined that the value of the Landfill Communities Fund for 2013-14 will ‘remain unchanged at £78.1 million’, suggesting that the Treasury will be retaining a larger proportion of the Landfill Tax than previously.

Recommendations to boost economy

The letter from the SAA outlines that although member companies are reporting ‘good levels of business with increasing optimism that the recovery is firmly in place’, the ‘job is not even half done’ when it comes reaching a budget surplus.

As such, it outlines a range of actions government can take to boost economic recovery, such as increasing Landfill Tax to £200 per tonne by 2020 to ‘drive recyclable waste from landfill’ and ‘bring back into use valuable resources’.

The alliance also suggests that some of the increased receipts from the increased tax could be used as grants by the Treasury to stimulate investment in ‘more recycling and energy from waste facilities’.

Indeed, it urges government to ‘speed up’ the replacement of power generation capacity (as around a fifth of the UK’s power supply is to be decommissioned by the end of the decade), using energy-from-waste (EfW) technology, which it argues could provide up to 11 per cent of the UK’s power needs. This looks likely to be heeded, as earlier this week the Department for Environment, Food & Rural Affairs (Defra) outlined government’s ‘future policy direction’ for EfW, in a new version of its ‘Energy from waste: A guide to the debate’ document.

Further to this, the alliance argues that government should scrap the proposed levy on single-use plastic bags, saying that it is a ‘pointless’ and ‘flawed’ green tax. It added that the ‘knee-jerk gesturism’ would also ‘impact on hard-pressed households’.

Peter Davis, Director-General of the BPF, explained: “In their proposal for a 5p charge for plastic carrier bags, Defra have ignored the high 70 per cent reuse of such bags and their minimal environmental impact. 

“The Commons Environmental Audit Committee has savaged Defra for exaggerating the environmental impact and exempting paper and bio bags. We hope the government will withdraw this proposal and steer clear of other similar flawed ideas”.

Other suggestions outlined in the letter include:

  • creating a ‘great deal more’ gas storage capacity;
  • boosting energy efficiency in houses by reducing the rate of Value Added Tax on products such as expanded polystyrene (EPS) insulation and PVC-U (unplasticised polyvinyl chloride) double glazing to five per cent;
  • ‘completely reviewing’ the Green Deal, which the alliance argues has an ‘unattractive’ payback scheme, and is overly ‘complex’;
  • either freezing or cutting Business Rates;
  • extending the £250,000 tax-free allowance for companies to upgrade equipment and expand production to ‘improve manufacturing productivity’; and
  • reducing the tuition fees for certain science and engineering courses to increase the number of students studying for these degrees.

Read the Seven Association Alliance letter to George Osborne.