No mention of waste in Autumn Statement

Image: BBC

The future of Landfill Tax is still uncertain, as there was no mention of waste in the Autumn Statement 2013 today (5 December).

The Autumn Statement provides an update on the government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility (OBR).

The Economic and fiscal outlook (EFO) documents are published twice yearly, once in the Budget and again in the Autumn Statement. They look at the future performance of the UK economy, in this case for the period to 2018-19.

Members of the waste and resources industry – including Closed Loop Recycling and the Environmental Services Association (ESA) – called on Chancellor of the Exchequer George Osborne to provide further ‘clarity’ on the future of Landfill Tax earlier this week, as there has been no disclosure of what the rates for sending waste to landfill will be after 2015.

However, speaking in Parliament this morning, Osborne made no reference to landfill (or indeed anything about the waste and resources industry), nor does the official Autumn Statement document make any reference to the future of Landfill Tax.

The only one reference to landfill is to show the OBR’s estimations of future receipts for landfill tax, aggregates levy, betting and gaming duties and customs duties and levies. This outlines that receipts will be £7.1 million in 2016/17, rising to £7.4 million in 2017/18 and £7.6 in 2018/19. There is no breakdown as to how these figures are proportioned.

Speaking to Resource, a spokesperson for the Treasury said that the future rates of Landfill Tax will be announced in the Budget 2014.

Defra cuts less than previously announced

Outlining that government departments are expected to underspend by £7 billion this year, Osborne announced that it will be ‘reducing the contingency reserve by £1 billion this year and reducing departmental budgets by a similar amount in the next two years’. This will save a further £3 billion in total.

The Department for Environment, Food and Rural Affairs (Defra) will see its budget cut by £19 million in 2014/15 and £18 million in 2015/16. However, this differs from what was announced in the Autumn Statement 2012, which outlined that the resources budget for the department in 2014/15 would be cut by £35 million. 

Resource has asked the Treasury to clarify why the budget cut is different to what was previously announced, but has not yet received a response.

Earlier this year, the department announced it will be ‘stepping back’ on waste in 2014 due to budget cuts.

Responding to the Chancellor’s Autumn Statement Chief Executive of the Chartered Institution of Wastes Management (CIWM), Steve Lee, said: “We are becoming accustomed to finding very little good news in the Chancellor’s statements and today is no exception. Coupled with the recent ministerial letter signaling a scaling back in Defra’s work on waste and a disappointing National Infrastructure Plan 2013 yesterday, it is clear that our industry can expect little support from the Government to deliver its significant green growth and jobs potential.

“Lack of money doesn’t have to mean lack of ambition and leadership, but once again the green growth agenda has been largely left out in the cold by the Chancellor. While we didn’t expect any substantive announcements, this Statement underlines the government’s hands-off approach to the future of this industry and a lack of regard for the role it can play in delivering a more sustainable and low carbon future.”

The Environmental Services Association (ESA) added: "The industry has been desperately calling out for clarity on the future of landfill tax but has now effectively been told to wait until the 2014 Budget.

"Without greater certainty over future landfill tax levels, the industry could struggle to persuade investors that the UK is fully committed to the circular economy and won’t return to its wasteful past. The industry is committed not only to meeting European targets for recycling and landfill diversion, but going beyond them and turning the UK into a truly circular economy."

Adding that the 'policy and fiscal support for the next phase of waste and recycling infrastructure development' need to be put in place now, the ESA concludes: "We can only hope that the Budget next year will finally bring us the clarity we need on landfill tax and the support which would help underpin the development of merchant waste infrastructure.”

Shale gas tax breaks

Speaking of energy, the Chancellor said that government will roll back green levies on energy bills, claiming that this will help save householders around £50 on costs.

Adding that it will not mimic Labour’s ‘transparent con that [it] can control the world oil price’ and freeze energy prices, Osborne outlined that ‘going green does not have to cost the Earth’ and repeated the previous announcement that the government will reduce the cost of the Energy Companies Obligation (ECO) – an insulation scheme delivered by major energy suppliers – to help shave an average of between £30 and £35 off bills in 2014.

It will also remove levies on energy bills that fund the Warm Homes Discount scheme, saving the average bill payer £12 off their annual total.

It is unclear how these proposals will ‘reduce carbon’, as Osborne said in his speech. Moreover, the changes to ECO mean that the least fuel-efficient properties, those requiring solid wall insulation, will be much less likely to receive insulation.

Osborne added that to ‘encourage investment’ in shale gas, government will halve tax rates on early profits.

The Autumn Statement document outlines that ‘the allowance will remove an amount equal to 75 per cent of capital expenditure incurred by a company in relation to an onshore site from its adjusted ring fence profits which are subject to the supplementary charge, subject to certain capacity limits (for production yield).’ Onshore oil and gas projects will also be removed from the scope of existing field allowances.

Osborne also announced that the government is entering into a ‘cooperation agreement’ with energy frims Hitachi and Horizon with the aim of agreeing an in-principle guarantee by the end of 2016 to support the financing of a new nuclear power plant at Wylfa on Anglesey, subject to ‘final due diligence and ministerial approval’.

Economy’s long-term health ‘undermined’

Commenting on the Chancellor's Autumn Statement, Friends of the Earth's Executive Director Andy Atkins said:
 "Yet again the long-term health of our economy has been completely undermined by the Chancellor’s short-sighted determination to keep the nation hooked on dirty and increasing costly fossil fuels.

“Handing tax-breaks to climate-wrecking fracking firms simply highlights the fact that George Osborne hasn't done his homework: they won’t lower bills, MPs say they are unjustified – and they could be illegal.

"The quickest and most cost-effective way to tackle rising energy bills, and end the scandal of thousands of people dying in heat-leaking homes, is to invest in a comprehensive insulation programme. But the government has caved in to Big Six pressure and given energy efficiency the cold shoulder.

"Building a strong economy and protecting the environment are two sides of the same coin, but yet again the government has left them both short-changed.”

Estelle Brachlianoff, Veolia Environnement Executive Vice-President for the UK & Northern Europe, also commented, saying: “Reducing energy bills will help consumers in the short term, but today’s measures do nothing to guard against price volatility in the coming years. We must diversify further, and in doing so we should not ignore a vast resource that is quite literally sitting on our doorstep: household black bag waste. 

“Projects are already under way that prove waste from homes can be profitably converted into energy through district heating projects – allowing residents to secure their bills for the next twenty years. Commercial residual waste is also a major untapped resource that is currently being overlooked.

“It is estimated that waste from homes and businesses could provide heat and power for over 250,000 homes in London alone but this means changing perceptions that renewable energy is just about wind turbines and solar panels."

Commenting specifically on the absence of a further support package for energy-intensive companies, Chief Executive of EEF, the manufactuers’ organisation, Terry Scuoler, said: “Industry, especially energy-intensive users, will be dismayed that government has failed to address the genuine concerns surrounding the uncompetitive price of energy for UK manufacturers. Companies looking to invest and create jobs in the UK need a long-term commitment by government to control costs increases and compensate those most affected. Without this commitment, making the case in global boardrooms to invest in the UK will get increasingly difficult."

Read the Autumn Statement 2013.