A tax proposed on the cleaning of waterways may pose a threat to crucial industrial projects, potentially leading to job cuts, ministers have been cautioned. The Treasury is making plans to implement a landfill tax on substances called “stabilisers” that are utilized in purifying ports, rivers, and canals when they undergo dredging starting in April next year. However, a recent analysis has indicated that this move could result in a significant increase in project costs, dealing a severe blow to coastal communities.
Concerns regarding the tax have been raised privately by Labour MPs, with the British Ports Association (BPA) highlighting that the tax could hinder the efficient cleaning of contaminated waterways and elevate the risk of flooding. Research from Oxera has shown that the expenses for capital projects might escalate to a point where certain projects become financially unfeasible. The maritime sector in the UK, which sustains numerous jobs and contributes substantially to the economy, could be adversely impacted by these changes.
In response to these concerns, the BPA has reached out to Dan Tomlinson, exchequer secretary to the Treasury, urging for a reconsideration of the decision. Emphasizing the negative repercussions, a spokesperson stated that the tax could lead to job losses and impede crucial projects. Labour had previously pledged to invest directly in ports as part of its Green Prosperity Plan, promising a substantial amount of funding to stimulate private investments.
A spokesperson from the Treasury defended the tax change, stating that hazardous waste from incinerators should not be exempt from landfill tax when disposed of alongside dredged materials. They highlighted that only a small fraction of dredged material in England requires stabilization and falls under this tax change. Additionally, they assured that after consulting with the industry, alternative environmentally friendly and cost-effective methods are available. The reforms are set to take effect in a year, allowing businesses time to adjust to the changes.