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Industry takes a closer look at planning and fuel duty in the Budget

Since its first day in office, the coalition has promised to be the ‘greenest Government ever’. But how green was chancellor George Osborne’s first full Budget, and what does it mean for the waste sector?

The most talked about announcement was the decision to drop fuel duty by 1p per litre, delay April’s planned fuel duty increase until next year and replace the fuel duty escalator with a complex ‘fair fuel stabiliser’, which will increase North Sea oil production taxes when oil prices are high.

The Whitehouse Consultancy senior consultant Carl Thomson believed the fuel announcements will have a calming effect on the waste industry.

He said: “Cancelling the increase is going to be very much welcome, although that is just for one year. The real cut of 1p may not make too much of a difference but is a step in the right direction.

“It sends a very clear political statement to the waste industry that the Government does recognise the prohibitive cost of transport.”

“What we are now seeing with this ‘presumption in favour of sustainable development’ is a recognition that the planning system has been too long and convoluted”

However, the Government’s decision to move the 1p/litre fuel duty increase means the sector is now in for a double duty increase next year, with rises in January and August 2012.

Thomson said: “There will be furious lobbying for next year’s Budget. By then the Government will really have to review the global situation and see if those inflationary factors still remain.”

The other big announcement in this year’s Budget was the chancellor’s plan to reform the planning system andcreate what he described as a “presumption in favour of sustainable development”.

Under the reforms, the planning system will be streamlined and there will be a new ‘fast track’ for major infrastructure, with a 12-month guarantee for the processing of planning applications and appeals.

This was seen as a positive move by Veolia Environmental Services deputy chief executive Paul Levett.

“We welcome the general message in the announcement regarding the planning consent regime. We look forward to seeing the detail because it impacts the new infrastructure which is needed by our industry in order to deliver on the waste hierarchy,” he said.

For Thomson, the announcements come as part of wider manifesto pledges to improve the uptake of waste infrastructure.

He said: “You would have expected a Conservative Government to have given more powers to local authorities to reject applications. What we are now seeing with this ‘presumption in favour of sustainable development’ is a recognition that the planning system has been too long and convoluted.

“Given the Government’s committed to driving this huge increase in energy from waste (EfW) and wanting to get anaerobic digestion (AD) off the ground, it is really laying the planning foundation for that.

“It’s a very brave move politically. There will be a lot of Conservative councils not pleased with this.”

Perhaps the most interesting aspect of the 2011 Budget came in environment secretary Caroline Spelman’s response, in which she commented: “We will also publish the waste review which will consider, among other things, the role that landfill tax plays as a key driver for local authorities to improve recycling rates.”

It is only possible to change taxes through a Finance Bill following a Budget, which means that the landfill tax escalator remains the same for 2011. But it raises questions as to what Defra has planned for the mechanism in the waste policy review.

Thomson explained: “It is politically quite difficult for them [Conservatives] as they are, on the whole, opposed to using environmental taxes as a blunt instrument to force behavioural changes. At the same time, the Budget does say the Government wants to be more coherent in how it uses environmental taxes, and these should be part of a wider context of voluntary agreements and regulation.

“What we will probably see from the waste review is how landfill tax can be used in a more joined-up fashion to drive the AD and EfW investment we are looking for.”

 

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