A proposed tax on the cleanup of water bodies could jeopardize essential industrial projects and lead to potential job losses, according to government ministers. The Treasury intends to implement a landfill tax on “stabilizers” used in decontaminating ports, rivers, and canals starting in April next year. However, a recent analysis suggests that this tax could significantly inflate project costs, particularly impacting coastal communities.
Concerns about the tax have been raised by Labour MPs, with the British Ports Association (BPA) expressing worries that it might hinder waterway cleanup efforts and increase flood risks. Research firm Oxera highlighted that the tax could render certain projects financially unfeasible, affecting jobs and economic output in the UK’s maritime sector, which plays a crucial role in national supply chain resilience.
The BPA has urged the exchequer secretary to the Treasury, Dan Tomlinson, to reconsider the tax implementation. They emphasized the potential negative impacts on jobs and critical projects, urging the Treasury to rethink its decision to avoid detrimental effects on coastal communities and investment in ports.
In its manifesto, Labour pledged to invest in ports, following their Green Prosperity Plan in April 2024, which aimed to unlock private investment with £1.8 billion in funding. Responding to the concerns, a Treasury spokesperson clarified that the tax targeted a small proportion of dredged material requiring stabilization and emphasized the availability of more environmentally friendly and cost-effective disposal methods. The spokesperson assured that businesses would have time to adapt to the upcoming reforms, which are set to take effect in a year.