Taxation to tighten up regulation

As an island nation, the UK has a long history of shipping products abroad, and a trading relationship with China that stretches as far back as the 17th century. Even then, Chinese exports were prized more highly than European imports and western companies were compelled to pay in silver, the only commodity the Chinese would accept.

Four centuries later, we are still paying a premium price for products from the Far East, yet in many cases we also supply the raw materials needed for manufacture at a budget rate and any intrinsic value in that material is lost to the UK economy for good.

Last year saw 2 billion in precious metals shipped to the Far East for recovery. That 2 billion, once released from the UK, will remain in the foreign economies. Of course, collection and bulking companies here will be paid for the waste, but where a UK company may receive 50 per tonne for plastics, for example, the value reaped once it has been recycled and manufactured into product will be far, far greater.

Transfrontier shipment (TFS) regulations make matters worse. If we are to benefit from the true value of materials, TFS needs to tighten up when a product is dismantled here in the UK and deemed a waste, we should not then have the ability to reclassify it to ease shipping to another country to increase short-term margin.

The regulations are scarcely policed and I would hazard a guess that if TFS was effectively enforced, as much as 20 per cent of the material currently shipped would be blocked.

Resources

In fact, many UK companies are well placed to exploit the resources found on our doorstep. They may be a little more expensive but many customers believe in an ethical approach and value the fact that their wastes are processed in the UK, helping to increase the economy and provide jobs

We could take this a step further by applying taxation to offshore shipments and empowering HMRC to enforce legislation. Not only would this result in significant revenue generation; it would also impact on behaviour. All businesses need to consider the bottom line so, faced with taxation on top of shipping costs, choosing to divert material to UK-based processors would prove much more palatable.

So far the waste management companies have been playing catch up. As the major contract holders of waste movements within the UK, especially at an industrial level, they work in a very traditional sphere of materials and seem to be slow to identify new opportunities. Without specialist infrastructure in place themselves, they often classify high value material as special waste and ship it abroad for ease of handling. This is all very well until we reach the point where China no longer accepts these types of waste from other countries and material is left here with insufficient infrastructure to manage it.

In the meantime, incorporating taxation into offshore shipments of waste could be used as a tool to drive an ethical change in the marketplace. We cant put a value on the waste exported out of the UK, but we can place a value on the products we buy back and it doesnt make for optimistic reading.