Chancellor Philip Hammond has backed the most ambitious packaging targets proposed by Defra for 2018-20, and announced consultation on extending the scope of landfill tax to illegal disposals of waste, following the lead in Wales and Scotland.
In his first and last spring Budget, Hammond said the Landfill Communities Fund would remain at £39.3m and the cap on contributions by operators would be raised to 5.3%, which will thereafter be maintained.
Defra’s resource budget is set to reduce by £100m each year, even though the ovarall Whitehall budget will increase annually: some £1.7bn is estimated for Defra 2016-17, £1.6bn for 2017-18, £1.5bn for 2018-19 and £1.4bn the year after.
The department’s capital budget, meanwhile, is to remain at £700m until 2018-19 then drop to £500m in 2019-20. Hammond expects money generated by environmental levies to treble from £4.6bn in 2015-16 to £13.5bn in 2021-22.
In November, Defra launched a consultation on packaging recycling targets for paper, wood, aluminium and steel for 2018-20, with three options of varying degrees of ambition.
Option 2 had the most ambitious targets for all materials except aluminium, which had a higher target in Option 3.
Hammond has chosen the Option 2 targets, while including the higher aluminium target from Option 3. However, the overall recycling and recovery targets for 2020 are 75.4% and 82%, respectively, which are consistent with Option 3.
The Environmental Services Association (ESA) executive director Jacob Hayler said he was pleased the Treasury would introduce taxes for illegal deposits of waste.
He said: “This will help to punish the criminals who undermine legitimate operators in our industry and restrict the option of illegal dumping as a means of avoiding landfill tax.
“We are also pleased to see that the 2020 packaging recycling targets in the Budget are aligned with ESA’s suggestions. In the absence of any real reform of the packaging recovery note (PRN) system, higher targets send the right signals to the sector that the country wants to do better and recycle more packaging in the future.”
Compliance firm Ecosurety’s commercial manager Robbie Staniforth was pleased the environment was on the Government’s agenda but was cautious about the chosen packaging targets.
“We are slightly surprised that they’ve opted for a mix of targets, and our only concern is that big recycling jumps may create artificial spikes in PRN prices. As the years progress, it will be important to ensure these PRN revenues generated are directed to improving recycling in the UK.”
Rick Hindley, executive director at Aluminium Packaging Recycling Organisation (Alupro), said he was ”disappointed and frustrated” at the targets for aluminium packaging. The targets to 2020 were effectively a ”straight line” whereas Alupro argued they should be front-loaded to maintain the industry’s good recycling record for the metal.
Hindley said that the 2018 target had already been achieved and there was a danger that low PRNs as a consequence would discourage reprocessing through the PRN system: ”Recycling might go up but it would not be recorded”.
CIWM welcomed the proposal to consult on extending the scope of Landfill Tax to illegal disposals of waste made without the required permit or licence as a useful measure in the fight against waste crime. It also hopes that that the ongoing drive to tackle tax avoidance will translate into further support for enforcement activity on landfill tax evasion by the authorities.
Chief executive Colin Church said: “We are also encouraged that the Government has listened to many of the key stakeholders across the sector and opted for the higher packaging recycling targets for 2018 -2020. This sends a clear signal of ambition, which we hope will be reflected across the wider waste and resource policy agenda in Defra’s forthcoming 25 year environment plan and the industrial strategy.”
“On skills, CIWM is pleased to see the Government’s commitment to new ‘T’ level qualifications that put technical training on an equal footing with academic qualifications. If the UK economy and infrastructure framework is to become more productive and resilient in the future, circular economy and clean tech skills will be essential.
“Stronger signals on resources will be needed moving forward, however. In this Budget the Chancellor focuses on labour productivity; in the future we will all need to increase our efforts to improve resource productivity to support the UK’s transition to a low carbon, resilient and resource efficient economy.”
Steve Lee, director general of R&WUK said announcements on the extension of Landfill Tax to illegal deposits and the packaging targets were welcome.
”The Chancellor has followed in the footsteps of his predecessor in making no reference to the much broader policy challenges around climate change, the low carbon economy, and energy and resource efficiency and security. Our sector has a lot to contribute to this agenda – both in economic growth and environmental protection terms – and it is disappointing to have to point to this omission yet again.
”That said, the Government may have a credible excuse this time. We are going through an unprecedented period both as a result of Brexit and because four major (and hopefully interlinked) policy frameworks are currently under development on national infrastructure, industrial strategy, the environment and emissions reduction. Once these strategies and plans are live, however, R&WUK will be calling strongly on the Treasury to show that it is firmly behind the plans and objectives set out.”
The Renewable Energy Association said the Budget would keep the sector “in limbo” due to delaying decisions on the Levy Control Framework (LCF) and the Carbon Price Floor.
Head of policy James Court said: “The industry was expecting an announcement regarding the future budget levels and structure, but this has been delayed and instead we face a new regime and no clarity on the proposed new set of controls.”
Gareth Stace, director of UK Steel, said: “The lack of any concrete action to address the longstanding disadvantages that our sector faces, such as the business rates regime or high electricity prices, represents a real missed opportunity.”
Nick Molho, executive director of the Aldersgate Group, said: “It was positive to see lots of focus on supporting innovative businesses and ensuring the UK’s workforce has the skills it needs to benefit from the job opportunities of the future. But, despite the fact that some of our key trading partners such as China are investing heavily in renewable energy and other clean technologies, there was no reference to the importance of the low-carbon sector to the future competitiveness of the UK economy.
”If the UK is to meet the chancellor’s ambition of being at the cutting edge of the global economy, the autumn Budget will need to be much clearer about the UK’s environmental and low-carbon ambitions, and provide a clear business plan to meet the UK’s policy objectives under its emissions reduction plan and 25-year plan for the environment.”
Paul Taylor, FCC Environment chief executive, said: “While it is encouraging to see the Government pledge its ongoing support for UK infrastructure projects, we feel that a major opportunity has been missed to set out plans to maximise the resource productivity of the UK economy – a central pillar of the Industrial Strategy.
“At present, UK waste management companies are paying to export waste out of our country for incineration, which other countries use to make fuel to power homes and businesses – which is simply not sustainable. Following Brexit, we now have the chance to define our own approach to waste and resource policy, away from EU environmental diktats which could cost UK businesses an additional £2bn over the next 20 years. We would welcome clarity on future recycling policy direction”
“We urgently need a commitment from Government to further invest in our domestic waste management infrastructure, which will not only mean that we can manage our waste more efficiently, but also better safeguard the UK’s long-term energy security.”