The comments come after Landfill Tax rose from £32 to £40 per tonne on April 1 2009 in a move which was broadly welcomed by the sector (see letsrecycle.com story). The tax is set to rise by a further £8 a tonne in April 2010.
However there is still no certainty over the rate for continued escalation beyond that date, which has already prompted concern from councils and waste companies alike.
In his Pre-Budget Report in November 2008, Mr Darling gave assurances that the tax would continue to rise as a means of “encouraging sustainable ways of waste management” but offered no further clarity (see letsrecycle.com story).
Steve Lee, chief executive of the CIWM, welcomed the plan to increase the Tax beyond 2010/11 but called for further explanation on what this would entail.
He said: “We have reached the stage where we need at least a medium term plan for this tax that reflects the timescales within which decisions about infrastructure and services are made
“In the same way that the Government has extended the Renewables Obligation by at least ten years, greater certainty regarding the Landfill Tax would help local authorities and UK plc to make plans and invest in the recovery and recycling facilities that the UK needs,” he added.
Dirk Hazell, chief executive of the ESA, said: “Increases in landfill tax have been a key driver for securing investment in infrastructure to replace landfill, as required to comply with EU law and to recover more value from waste.”
“The clear signalling of future tax increases has been particularly important, and a commitment in this Budget on medium to long-term prospects for landfill tax rates would strengthen confidence with investors considering support for new recycling infrastructure,” he added.
“Uncertainties”
Individual waste management companies also told letsrecycle.com that they were keen to know the future of Landfill Tax.
Paul Levett, deputy chief executive of Veolia Environmental Services, said: “Veolia Environmental Services would welcome certainty regarding the landfill tax rate from 2011/12. The current uncertainly makes investment decisions unnecessarily difficult.''
Richard Skehens, managing director of Grundon, added: “It is exactly what I have been saying over the last few months. What we would like is some certainty, as the Landfill Tax escalator will finish next year and we would like see some certainty for the future.”
“It would help us plan invests and it is important for the industry and our customers and that is what we are asking for and we would like to see from government. I think it is going to be a very complex budget and maybe we can comment more clearly after the Budget,” he added.
Councils
Council leaders have also called for more clarity in the 2009 Budget over where funds generated from the Landfill Tax will go. This forms part of a long-running campaign by the Local Government Association (LGA) to get the money raised by the levy returned to councils to help fund development of waste and recycling infrastructure (see letsrecycle.com story).
A spokesman for the LGA told letsrecycle.com today: “Whilst councils accept that landfill tax is a useful means of driving investment in waste facilities, the government should use the budget to set out exactly how this investment is to be afforded by councils in the current financial climate, where borrowing is difficult and spending is increasingly tight.”
Scrappage
A debate is also raging ahead of the 2009 Budget over whether the government might introduce a scrappage scheme for domestic electrical appliances and old cars.
Members of the Confederation of British Industry last month called on Alistair Darling to follow examples set in Germany and France and introduce a financial incentive for people to recycle end-of-life vehicles and waste electrical and electronic (WEEE) items (see letsrecycle.com story) and it has been reported in the national press that the Chancellor is considering this option.
However, the Green Party has attacked the proposals, which could increase the amount of material being handled by vehicle dismantlers, shredders and WEEE treatment facilities, as “fundamentally flawed”.
Darren Johnson, Green Party spokesman on trade and industry, said: “This was tried in Germany. It increased sales of new cars by 40% but it probably had little real positive impact. Consumers simply shifted their spending from elsewhere in the economy, which effectively meant shunting job losses elsewhere.
“It only benefits people who can afford to buy a new car, and they often buy bigger cars which cause higher emissions. In short, paying people to scrap old cars and buy new ones will not create jobs, and will not cut emissions,” he added.
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