A stealth tax buried in the Budget could derail UK ports, jobs and Net Zero goals

Yet the plan will hit nearly everyone, by badly harming the economy and the environment. Major industrial projects - particularly in and around ports, rivers and canals - risk collapse, threatening jobs and the UK’s Net Zero ambitions.

Hidden alongside the recent Budget was a proposal to impose landfill tax on what are known as ‘stabilisers’ from 1 April next year – barely 14 months away. Contaminated materials are dredged from our waterways to reduce pollution, but require physical and chemical dehydration to make sure they are safe for disposal.

This process relies on hazardous ash residues – stabilisers – which are byproducts of generating renewable power in Energy from Waste and Biomass plants. The damaging properties of both the residues and the dredgings are neutralised. They are stored in scientifically sophisticated, well protected sites and then returned to their natural state.

This is a perfect marriage, which Dan Tomlinson, the Exchequer Secretary to the Treasury, is looking to break up by removing the exemption from landfill tax for stabilisers used in dredged material. The handling of contaminated dredgings will increase from almost nothing to more than £300 a tonne, which equates to tens of millions of pounds for major projects.

The inevitable consequences of hiked costs are a reduction in dredging, which is vital for flood protection, and the delay or cancellation of major infrastructure projects, from new ports to housing schemes on riverside sites. Dredging removes contaminants from our rivers and coastal waters, so any reduction of is of course harmful to the environment. Ports are one of the five main sectors for growth in the Government’s National Wealth Fund. Yet their development – and the promised green industry projects around them that will create a generation of well-paid jobs – will become unviable.

Where costs are absorbed and passed on to local authorities, taxpayers will shoulder the financial burden, wiping out the negligible amount raised for the Treasury. Alternative methods of drying dredgings involve virgin raw materials, such as lime and cement. They are not only much more expensive, but have a high environmental carbon impact, undermining the principles of the circular economy that the Government is so keen to promote.

Since 1996, successive governments have used the tax system effectively to reduce landfill. The exemption for stabilisers was introduced to complement those ambitions to improve our environment. Unnecessarily imposing a tax will instead see hazardous ash used for aggregates, with growing fears that this will ultimately leach into the built environment and create a health risk for future generations.

There is nothing to be gained, economically or environmentally, from the Treasury’s plan. There are only damaging consequences. Ministers must understand - quickly - that the reform is not just a technicality, it is a change that will irreparably undermine their commitment to boosting growth and infrastructure.

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Richard Ballantyne is Chief Executive at the British Ports Association

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