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Businesses and politicians urge tax boost for recycling

An influential body of businesses and politicians has urged ministers to use tax measures to boost recycling.

The Aldersgate Group said VAT and environmental levies could be critical tools in improving resource efficiency.

Its report No Time to Waste sets out recommendations for inclusion in the Government’s forthcoming resources and waste strategy.

Changing the fiscal approach could encourage businesses to develop more resource-efficient products and consumers to buy more sustainably, the group said.

The report urged ministers to consider “adjusting VAT rates on products with higher levels of recycled material”.

It added: “This could be extended to mandate recycled content or set durability or reuse targets, drawing on the Swedish case study.”

The Swedish government slashed VAT by 50% on the repair of items such as bicycles and white goods, as well as allowing citizens to reclaim up to half the labour costs for fixing home appliances from their income tax.

The Aldersgate report also urged a shift from a reliance on labour taxes to more levies on resource use.

Elsewhere it called for the creation of a cross-departmental body to oversee resource risk and opportunities, and for measures to support the development of infrastructure to help the UK process more of its own waste.

The group – whose members include Sky, Marks & Spencer, Green MP Caroline Lucas and former deputy prime minister Lord Prescott – also demanded circular design principles be embedded in all construction-related degree courses.

It called for the Government to include environmental principles in the EU (Withdrawal) Bill.

Victoria Fleming-Williams, lead policy paper author at Aldersgate Group, said: “It is high time for resource efficiency to cease to be an overlooked area of policy and for the Government to use the public procurement, regulatory and fiscal levers at its disposal to make the UK economy a world-leading resource-efficient economy.”

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