The Budget was delivered yesterday, with some key points that will have major implications within the plastics industry.
It announced a plastic packaging tax that will come into force in April 2022, that will see manufacturers and importers whose products have less than 30 per cent recyclable material charged £200 per tonne.
Research and development into energy research will also be doubled to £1 billion, and SMEs can make use of a ‘temporary coronavirus business interruption loan scheme’, a loan of up to £1.2 million.
Here’s how the plastics industry has responded to the Budget.
The British Plastics Federation said: “As an industry, we want to play our part in leaving the environment in a better state for future generations and taxing plastic packaging that contains less the 30 per cent recycled content will increase the use of recycled material.”
“We are pleased that this tax includes dealers of pre-filled packaging too, as otherwise it risked disadvantaging UK businesses, driving jobs overseas, and increasing carbon emissions by favouring heavier imported products.”
“Questions remain, however, regarding whether the tax will apply to packaging that cannot incorporate recycled content due to existing legislation. We look forward to working with the government during the upcoming consultation to address these matters.”
“The BPF hopes that the money raised by this tax is invested appropriately and where it is badly needed: in upgrading the UK’s recycling infrastructure.”
“In the interim, our recycling infrastructure could be improved via reforms to the existing PRN system, which the industry has been requesting for many years.”
“We also welcome the two-year extension of the Climate Change Agreement scheme. As an organisation that manages the CCA for the plastics industry, we know this scheme is valued and has helped to significantly reduce energy use.”
Stephen Phipson, Chief Executive of Make UK, said: “This was a welcome, realistic, and pragmatic statement which recognises the unparalleled times we are living in. Business understands that dealing with the impact of the coronavirus on individuals and the economy was always going to be the Chancellor’s priority and he has our full support in doing whatever is necessary to protect the public and the economy at such a difficult time.”
“Aside from the overwhelming immediate priority the Chancellor has also recognised the need to turbocharge investment in long term measures, which will boost the productive potential of the economy and support green growth.”
“For too long the UK’s infrastructure outside the South East has played second fiddle, and industry will welcome the resources devoted to improving links across the UK, in particular, the strategic road network.”
“In a world which is rapidly becoming digital, the UK needs to stay at the forefront of research and innovation. Today’s measures to boost R&D will be applauded by industry and will help the UK lead in the technologies of the future.”
“The measures will help shore up confidence in the short term, and industry will be reassured that the government will do whatever it takes to keep the economy moving.”
“If the situation worsens, however, we need to think the unthinkable and looks at ways in which employers, government, and trade unions could co-operate on measures such as short term working patterns to keep key skills and grants or other financial support for firms who lose orders.”
“Industry stands ready to work with government and trade unions to this end.”
Dame Carolyn Fairbairn, Director-General of the CBI, said: “In deeply challenging times the Chancellor has worked against the clock to deliver two budgets in one: a first for national resilience today and a second for economic ambition today.”
“It’s a bold Budget at scale, coordinated with the Bank of England, which will help people and business through tough times.”
“The significant uplift in R&D funding, creation of a UK version of ARPA, a fundamental review of business rates, and spending promises on infrastructure will all bring real benefits to people, business, and communities.”
“The Chancellor has set out some powerful incentives to get businesses investing, increasing the R&D tax credit and the Structures and Buildings Allowance. The £5 billion of new export loans will encourage the best of UK business to look to new global markets.”
“The next few months will bring opportunities for the government to make major decisions that they have understandably had to put to one side today. Some gaps still need to be filled in around skills, energy efficiency, and powering the UK’s low carbon future.”
“Overall, the Budget is a powerful signal to firms at home and abroad that the UK can and will manage the immediate challenges and long-term opportunities in parallel.”
Chloe Kinner, Research Associate at Wood Mackenzie, said: “The UK currently recovers or recycles just under 50 per cent of plastics packaging, making it a middling performer in European terms. By increasing the price of virgin plastic relative to recyclate, this tax, once introduced in April 2022, will help to incentivise more responsible sourcing and production.”
“However, further progress is required on collection, as more investment is needed in sorting and processing plastic material. The industry will need to continue to invest in new technologies, such as chemical recycling, to fully deal with the issue."
Richard Kirkman, Chief Technology and Innovation Officer at Veolia, said: “This announcement cements a direct financial incentive to use recycled content in new plastic packaging and is a game changer.”
“The new green government and its Plastic Packaging Tax has set in motion a new phase of investment into the circular economy, ensuring we can recycle our way out of the climate emergency.”
“Plastic is an important material which mitigates climate change with a lightweight, food protecting, recyclable solution. This kind of policy makes the UK a lodestar for propelling the world into a new net zero age."
Shawn Welsh, Vice President of Hi-Cone, said: “This is a step in the right direction that will encourage that plastic is seen as the valuable resource it is, moving society closer to a circular economy in which plastic needs never become waste.”
“However, plastic waste remains a problem. Our latest research revealed widespread consumer confusion on recycling. We are doing our best to provide clarifying resources to consumers so they can make informed choices but the industry and governments need to do more to end this crisis.”
Mark Smith, Partner for Innovation Incentives at Ayming, said: “There’s little doubt that we’re on the cusp of a climate disaster, so it’s encouraging to hear such intentions to make the UK a green economy. There has been lots of ambitious talk of carbon neutrality from the government with legally binding targets to become net zero by 2050, and rightly so.”
“But without the support from businesses, these ambitions remain a fantasy. Whether it be carbon capturing technology or more sustainable food cultivation, business-led innovation is going to have to play a pivotal role in getting us through what lies ahead.”
“Not only should we be incentivising research in environmental technology, but the government must create the friendliest possible environment to facilitate the transition to a green economy.”
“For example, we have known about the need to increase investment in electric vehicle infrastructure for a long time. We have to be much quicker to adapt to the economic requirements of the time or we risk being left behind.”
“The UK could be the next world leader in some of these green technologies, which would provide a huge opportunity after Brexit. The future is sustainable, and businesses at the forefront of that trend will benefit enormously.”