George Osborne’s Budget has received a mixed reaction from the waste and recycling industry, with views divided on the announcement that landfill tax is to increase in line with the retail price index from April next year.
The chancellor announced the standard and lower rates of landfill tax will increase in line with the retail price index rounded to the nearest five pence from 1 April 2015.
Osborne’s Budget also gave clarity on the lower rate of landfill tax with regard to fines from waste transfer stations.
Responding to the Budget, Resource Association chief executive Ray Georgeson said he was relieved at the news that landfill tax will in the short-term increase in line with RPI and not be eroded in real terms.
“We still believe there is scope for significant future increases in landfill tax to further drive on towards recycling targets and complete the switch in emphasis in the UK on how we dispose of resources,” he added.
“We hope government will consult widely when considering how it will provide further long term certainty about future landfill tax rates and we acknowledge the recognition from government that this certainty is needed by all stakeholders in the waste and resources sector.”
CIWM chief executive Steve Lee explained: “Increasing landfill tax in line with inflation is the outcome we expected and is a pragmatic approach for the medium term.
“While it is important that this valuable mechanism continues to be effective in driving resources out of landfill and back into economically and environmentally beneficial use, there is not the evidence base to support further significant increases at this time.
“However, CIWM would urge the Treasury and Defra to keep this under review and undertake further work to map out the future role of landfill tax to underpin progress on resource efficiency.
“We welcome the clarity on the lower rate of landfill tax with regard to fines from waste transfer stations and other processing facilities and we would expect the forthcoming consultation to propose a staged introduction to give the industry time to put the necessary procedures in place.”
Mike Jones, Local Government Association Environment and Housing Board chairman,said that by freezing the rate of landfill tax for 2015, government has recognised “the significant work by local authorities and residents and radically reduce waste sent to landfill by nearly 40% in the last five years”.
The Environmental Services Association (ESA) reacted with disappointment to the announcements made by the Chancellor in his 2014 Budget, around landfill tax. ESA economist, Jacob Hayler said: “It is disappointing that the Chancellor has failed to take this opportunity to provide the industry with the long term clarity on landfill tax it needs.”