There was a cool response from the waste and recycling sectors to the chancellor’s autumn statement.
Amid bleak forecasts from the OBR which said the UK economy would contract by 0.1% this year, and downgraded growth forecasts for the next five years, George Osborne announced a surprise 1% cut in corporation tax.
But the chancellor drew criticism for the lack of announcements on the green economy.
Ray Georgeson of the reprocessors’ Resource Association trade body said there was little Christmas cheer in the mini-budget.
Osborne had failed to recognise the sector’s potential to take UK out of recession sustainably, he said.
“The constraints on the Green Investment Bank remain in place and so his forecasts for deficit reduction mean the GIB remains unable to borrow until 2016/17, assuming his forecasts prove accurate.”
“The absence of a focused manufacturing strategy to support UK green industries, together with the weak signals on renewables allied to boosts for fossil fuel based economic activity send a bleak message to green investors. This is frustrating, as we know that investors will respond to clear and strong signals from Government.”
Chris Dow, CEO of Closed Loop Recycling welcomed the cut in corporation tax, the introduction of a ‘new business bank’ and a ten-fold increase in the annual investment allowance in plant and machinery, but asked, “what about Britain’s green economy?”
“Green industry should be seen as an opportunity for job growth and industry reform rather than being treated as an economic cost. We are urging the government not to park the green economy for the next generation, but to ensure green businesses such as ours receive the right signals for investment and growth opportunities.”
Industry non-executive director Paul Levett called for ministers to work to encourage investment in recycling and reprocessing which would “create thousands of green jobs, reduce imports of raw materials and generate corporation tax.”
Osborne’s announcement of a successor to the Private Finance Initiative, PF2, was cautiously welcomed by Veolia executive director Robert Hunt.
The new streamlined scheme, which aims to address criticisms of PFI, will allow public sector equity stakes in projects, and departmental centralised procurement.
While there was no mention of new waste PFI/PF2 projects, Hunt said Veolia would “study the detail of the new proposals”.
“The injection of additional equity and facility for better financing is clearly to be welcomed”, he added.
Tim Care, a PFI lawyer at Dickinson Dees, said there may be concern from some local authorities struggling to finance waste projects that there had been no suggestion of a rethink on Defra’s 2010 withdrawal from PFI.
However, he added, in the longer term with the sector’s need for capital investment, its income generation capability and the appetite for investment, the new streamlined PF2 “might at some point convince Defra that PFI can play a role in the waste sector again”.