Treasury warned new tax dangers job losses in hard-pressed coastal communities
The Treasury is planning to apply a landfill tax on what are known as ‘stabilisers’ used to decontaminate ports, rivers and canals when they are dredged from April next year
Concerns were raised over the landfill tax(Image: Getty)
A tax on cleaning up waterways will make vital industrial projects “unviable” and risks job losses, ministers have been warned.
The Treasury is planning to apply a landfill tax on what are known as “stabilisers” used to decontaminate ports, rivers and canals when they are dredged from April next year. But, new analysis has warned it could see the price of projects soar, in a huge blow to coastal communities.
Labour MPs have privately raised concerns about the tax, which the British Ports Association (BPA) said would slow down the clean-up of contaminated waterways, as well as increasing the risk of floods.
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Analysis from research firm Oxera said: “Capital project costs could rise significantly, potentially to the point of rendering economically or financially marginal projects unviable. The UK’s maritime sector supports thousands of jobs and billions of pounds in economic output, and is fundamental to national supply chain resilience.
“These outcomes would be particularly acute in coastal and regional economies where ports serve as anchor institutions for local development.”
The BPA has now written to Dan Tomlinson, exchequer secretary to the Treasury, urging him to change course. A spokesperson said: “Dan Tomlinson needs to rethink this decision urgently. Companies across British industry, including ports and specialist engineers, have warned the Treasury about the economic and environmental harm this tax will cause.
“This report shows how jobs will be lost and vital projects will become financial impossibilities. The Treasury is sleepwalking into this tax on coastal communities. It’s time they woke up, ditched the tax and avoid wrecking investment around Britain’s great ports.”
Labour promised in its manifesto before the general election to “directly invest in ports”. This followed the party’s Green Prosperity Plan in April 2024, which pledged £1.8 billion of funding to unlock private investment.
A Treasury spokesperson said: “We are not going to continue letting hazardous waste from incinerators avoid landfill tax by being disposed of tax free with dredgings. Only a fraction of 1% of total dredged material in England is landfilled requiring stabilisation – the very small proportion affected by this tax change.
“For dredged material and stabiliser affected by this change, following discussions with industry we are confident there are other more environmentally friendly and cost-effective methods available. These reforms will not come into place for a year, giving businesses time to adapt.”
