Whilst we do not support tax raises, we believe that the funds must be directed at measures to reduce the environmental impact – in this case, investment in waste management measures that divert waste away from landfill. We have favoured measures that will achieve this rather than others based on allocating the money to employers’ national insurance discounts, or reductions in corporation tax or business rates.
Our position is that the UK needs to improve its waste management infrastructure overall, so that companies have access to cost-effective alternatives to landfill. This is also necessary for the UK as a whole to meet the plethora of new waste regulation coming our way. EEF wants to see a stronger emphasis in the report on ways to directly improve capacity. This is referred to in passing, but there is little detail on how it would be achieved.
There needs to be linkages with other areas of waste policy to provide a cohesive framework. For example in government’s consultation on the implementation of the WEEE Directive, there is a proposal that retail compliance schemes will fund Civic Waste collection centre improvements. There is no consideration of using some landfill tax revenues to assist with this if the retail option is not successful.
We believe that it will be most effective if Government funds a package of measures that offer options to different types of companies. Smaller companies may benefit more from advice, training and grants, whereas companies in sectors like steel may prefer funding assistance for research, or trialling of new treatment technologies. We would not want to see a situation where certain measures are only available to certain sectors or companies of a particular size.
Specific Measures
Direct Grants
EEF supports the principle of direct grants. We believe that these should be made available for companies who need to fund equipment, training, research procurement of advice. We also or research capital equipment such as compactors or dewatering machines. Companies should also be able to apply for grants to support research and development into treatment methods for certain wastes or for demonstrator models.
We do not support the view that grants will take the place of funds that companies should be investing in this area anyway. Many companies are not able to address waste issues because they lack the right skills, resource, time or investment capacity at times when margins are being squeezed due to international competitiveness.
Training in Waste Management
Envirowise, Integrated Skills and others have identified that there are no technology barriers as such to divert waste away from landfill. However there are issues of economics, and cultural change, skills and knowledge. Such issues can be overcome with awareness raising and skills training. EEF believes that it is important that companies should be able to apply for funding that covers management techniques and training in waste issues as well as capital equipment or treatment technologies. Examples of relevant training range from half day in house awareness sessions, through
Enhanced Capital Allowances
EEF supports ECAs in principle, as we are in favour of any measure that will encourage investment in waste management equipment or infrastructure. However we have some concerns about ECAs, based on our experience of their use within the Climate Change Levy package. Our members have alerted us to the fact that there are examples where providers of energy efficient equipment who have had their products registered by DEFRA on the approved list for enhanced capital allowances tend to put their prices up. Our members feel that this has got to the stage where it is ‘common knowledge’ within the industry that prices have risen by 15-20% for goods on the list, so there is ‘no point’ on using it to source energy efficient equipment. The example we have been provided with to illustrate this is set out below:
This is a quote from City Electrical Factors Ltd, a large supplier of equipment. It highlights a simple example where equipment listed on the Enhanced Capital Allowances database is being charged at 20% higher rates.
This quote is for two types of motor – one at 3kW, and one of 5.5kW, from two different companies.
It is important to note that both the types of motor at each power ratings are classed as energy efficient.
Item 1 – Teco 3 Phase Motor Aluminium 3kW 4 Pole £136.65 (Not ECA listed)
Item 3 – 3 kW 4 Pole Foot Mount Motor £172.19 (ECA listed)
Item 2 – Teco 3 Phase Motor Aluminium 5.5 kW 4 Pole £223.79 (Not ECA listed)
Item 4 – 5.5 kW Pole Foot Mount Motor £275.50 (ECA listed)
When a company is faced with such a price differential, and understands that both types of motor have the same class of energy efficiency, they are most likely to choose the cheaper option. We want to ensure that this isn’t the case should ECAs be offered in the waste management area. There needs to be a simple method of monitoring the ECA approved lists.