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Councils join clamour for landfill tax Budget announcement

Councils have called for a landfill tax freeze in next week’s Budget.

The call by the Local Government Association (LGA) will add to the pressure on the chancellor to clarify the position on the tax beyond next year.

The LGA, which represents 423 English and Welsh councils, said landfill tax should be frozen at the £80 per tonne rate due to come into force next April. It said a continuation of the £8 a year escalator into 2015/16 would cost council tax payers £70m.

The chancellor announced in the 2010 Budget that the £8 escalator would continue until at least 2014, and that the tax would not fall below £80 a tonne from 2014/15 to 2019/20.

Waste infrastructure investors have told MRW they need clarity in the Budget over the escalator, warning that continued uncertainty could damage investment in alternative treatment facilities.

Director at waste investment firm Eternity Capital, Alon Laniado, said the tax should at least rise with RPI in order to ensure treatment infrastructure maintains its relative cost advantage. “I don’t necessarily think it should rise above RPI, but it mustn’t rise below. It’s about knowing that the steady state that exists today will remain”, he said.

Calls to extend the escalator in the Budget were backed by Barry Sheerman MP, co-chair of the Associate Parliamentary Sustainable Resources Group, who said George Osborne should seize the opportunity.

Senior waste advisor with Golder Associates, Nigel Mattravers, said investors needed to know one way or the other: “Is it going to stay at £80, or is it going to go up with RPI?”

But Mattravers warned the industry not to expect much from the chancellor. The waste sector had “learnt to be disappointed” by recent Budgets, he said.

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