It is expected that Gordon Brown will announce plans to substantially increase the existing tax – currently 13 per tonne – in the pre-budget report due out next week. But the prospect of such a leap has alarmed business organisations.
Spokesman for the CBI (Confederation of British Industry), Richard Dodd, told letsrecycle.com: “We are opposed to a substantial increase in the landfill tax on the grounds that it's imposing another substantial cost on businesses and as it currently stands, it doesn't appear to be achieving the desired objective.”
He suggested that the tax was not the best way to promote sustainable waste management. “The landfill tax provides some incentive for waste and resource minimisation but will never on its own provide the appropriate signals for industrial and domestic users to change their behaviour.”
Engineering
The Engineering Employers' Federation (EEF) has also cautioned the government about raising the tax. A recent survey of members indicated that if the landfill tax doubled, small firms would see an increase of 1,000 – 7,000 tax a year, while larger companies could pay up to 200,000 more a year. Along with 24 other trade bodies representing 10,000 employers, the EEF warned of adding to manufacturing costs at a time when profitability is already at its lowest level for nearly twenty years.
EEF director general Martin Temple warned of the effects of a tax increase on businesses: “If we continue to make the UK a less welcoming environment for manufacturing companies, then business will simply vote with its feet and the movement abroad of our manufacturing base will accelerate.”
EEF environmental advisor Anthony Hume said the potential doubling of the tax was not too great a problem because the rate was much lower than in other European countries. But he said: “I have more of a problem with what's done with the money. If we are going to divert waste from landfill, we have got to start investing in new technologies and systems at a local level.” Many EEF members produced waste materials that they either could not recycled or could not be sure of a stable price for, he said.
Incentives
Hr Hume continued: “Landfill tax money has been used for awards and research, which has been important up to now, but it's got to move into another phase to enforce the participation of consumers and develop a different culture of recycling.” The money should also be used to deal practically with the problem of fly-tipping, which has increased since the landfill tax was introduced, he said.
Mr Dodd said that more incentives, not taxation, was the way to encourage sustainability without harming UK businesses. “We'd; like to see more use of carrot as well as stick – some incentives for businesses to modify what they do with waste rather than simply imposing an extra tax burden which damages the competitiveness of a business in the UK,” he said.
Mr Hume agreed. “We need to give people the incentive to become involved in recycling,” he said.
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