Back shale gas and increase landfill tax, urges letter to Chancellor

Seven manufacturing organisations representing the plastics, rubber, coatings and associated machinery and tool making sectors, have written an open letter to George Osborne in anticipation of the Autumn Statement, calling for Government action to help drive stronger investment and export levels, including proposals to back shale gas and increase landfill tax to £200 per tonne.  

The Seven Association Alliance, which is coordinated by the British Plastics Federation, collectively represent 310, 000 employees from 6,100 companies and have confirmed that an economic recovery is firmly underway. Drawing upon the GDP figures for manufacturing that illustrate a rise of 0.9% for the second consecutive quarter, the Associations have stated that this could be improved if there is a stronger business investment and higher export levels.

The Alliance has put forward a number of proposals for Government action.

Regarding energy, security of supply and cost is an issue that has gained a great deal of media attention in recent months. With energy prices rising, the Government has been asked to act with more urgency to ensure that energy costs to industry are kept low and affordable. The benefits of shale gas also need to be deployed swiftly, according to the seven manufacturing organisations, as it will not only supply them with less expensive energy, but will also provide raw materials vital to a thriving UK chemicals and plastics industry. The agreement to proceed with the creation of two nuclear reactors at Hinckley Point is welcomed by the Alliance. However, as these will not be operational until 2023, the introduction of additional reactors has been called for.

With UK Landfill capacity filling up quickly, the letter says the “UK is amongst the worst performers in the European Union for relying on the landfilling of waste.” Therefore, the Alliance has asked the Government to greatly increase Landfill Tax to £200 per tonne. This would ensure that recyclable waste from landfills is diverted and transformed into valuable resources after recycling.

In the sector of Housing and Construction, it has been proposed that a review takes place of the “Green Deal”, due to only 12 properties having benefitted from the scheme. In addition to this, the Associations say the payback has been deemed to be unattractive and the scheme complex.

Another topic which the open letter covers is business investment and innovation. While overall investment rose 0.8% in the 2nd Quarter, business investment dropped by 2.7% and was down 8.5% on the previous year. The organisations believe that business investment is being held back by availability of finance. In addition to this, only a mere 16% of UK businesses see product innovation as a priority, which is less than half of the 33% of global companies who place the highest value on this. With limited resources the Government has decided to back a few ‘winners’ in strategic sectors. However the creation of a wider raft of new initiatives across manufacturing has been called for to show SMEs the benefit of innovation.

Whilst the preservation of the environment is of great important to the Alliance, it does not feel that ‘pointless green taxes’ are of benefit to hard-pressed households who are already struggling for money. With the proposed 5p charge for plastic bags, the organisations hope the Government will reconsider this unnecessary charge.