The Engineering Employers Federation (EEF) yesterday submitted comments to a government's consultation on how the tax rise should be used. The EEF said: “The proportion of revenue raised from industry under the government's proposed rise in the Landfill Tax should be recycled back into business through a combination of enhanced capital allowances, direct grants and interest free loans, to promote investment in improved waste management.”
The EEF, a federation of regional manufacturing associations and the Engineering Construction Industry Association, warned that other proposals for directing money to businesses, such as cutting business rates, corporation tax or national insurance contributions, would not encourage better waste management practices.
Head of environmental policy Helen Woolston said: “For business to accept the rise in Landfill Tax, any measure to recycle the funds must be clearly linked to improving waste management performance. National insurance contributions, business rates and corporation tax measures would fail in this respect and should be avoided at all costs.”
Recommended
The EEF recommended that money made from the tax should be directed towards industry through direct grants, interest free loans or Enhanced Capital Allowances. ECAs allow businesses to claim 100% first year capital allowances on investments in energy saving technologies and products. The EEF suggested that the criteria should be expanded to include best practice, training, hardware and software and they should be made available now to encourage investment before 2005.
The organisation also agreed with government plans to extend the lifetime of the Waste and Resources Action Programme (WRAP), and added that it should be refocused to improve the market for materials such as plastics and composite materials that were hard to sell on.
Timing
EEF criticised the proposed timing of the Landfill Tax rise, which is due to start in 2005. Ms Woolston said that “significant investment” would be “urgently needed” for UK facilities capable of diverting waste from landfill.
The Chancellor's Pre-Budget Report last November proposed that Landfill Tax should ise by 3 a year from 2005/06 until it reaches 35 a tonne. The tax is currently 13 a tonne and rises by 1 per tonne per year.
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