The waste industry has received the Budget with mixed reviews. It comes after Chancellor Alistair Darling pledged to extend the landfill tax escalator for another year until 2014, which will continue to increase by £8 per tonne per year (see MRW story).
Local Authority Recycling Advisory Committee policy officer Andrew Craig said the Budget had positives and negatives: The landfill tax has been a powerful driver to help drive sustainable waste management. However, the tax will have an adverse financial effect for local authorities as they have to pay more money on disposal for waste that cannot be recycled.
The Government has reneged on its pledge to give back revenues raised from the landfill tax back to local authorities. If the Government gave financial support for local authorities to invest in recycling and composting infrastructure then it would swallow up the extra cost that authorities have to pay on landfill tax for waste disposal.
The landfill tax will rise to £48/tonne from 1 April 2010, be £56/tonne in 2011, £64/tonne in 2012, £72/tonne in 2013 and £80/tonne in 2014.
Environmental Services Association chief executive Dirk Hazell said: ESA welcomes the floor price under the landfill tax announced by the Chancellor. An inflation-adjusted real floor would have been preferable but this announcement does at least help to provide some certainty to investors in our sector by removing one aspect of regulatory risk.
Darling said extending the landfill tax escalator would provide certainty for business investment.
The Chartered Institution of Wastes Management chief executive Steve Lee said: We welcome the extension of the landfill tax escalator to 2014 and the confirmation by the Chancellor of the £80 floor after that point. However, it falls short of the longer term plan for the tax that the industry has been calling for and may not be enough to provide the investment certainty that we need.
Shanks materials director Paul Dumpleton added: It was quite uninspiring but given the restrictions the Chancellor is under in the current climate it is quite understandable.
ISM Waste Services director Peter Allen was more scathing: Mr Darlings money grubbing Government is extending the landfill tax to help plug the hole of incompetence they have dug over the past decade which incidentally must be bigger than all the landfill holes in the country combined! If the UK is to divert more commercial & industrial waste away from landfill the waste industry needs investments, grants and incentives from the government similar to those provided to the public and local authority sectors. Mr Darling is taking a lot from our industry and giving very little back so his Government cant expect much in return.
Darling also announced in the Budget that he would create a Green Investment Bank to support investment in low-carbon projects.
Financial advisory firm Catalyst Corporate partner Mark Wilson said: The winners would probably be developers of renewable energy projects and transport infrastructure. This should be helpful for the energy from waste sector, where the bank will play a role in funding gaps where there is limited private sector capital - partly due at the moment to a reluctance of commercial banks to lend in the sector. The reality is that we will not know where the new banks priorities lie until it develops a track record. The important thing here is that the bank complements private sector investment rather than competes against it.