The Treasury is facing backlash over plans to apply a landfill tax on stabilisers used to decontaminate ports, rivers, and canals during dredging, with warnings that the levy could render vital industrial projects unviable and lead to job losses in coastal communities.
New tax on stabilisers
From April next year, the Treasury intends to impose a landfill tax on so-called stabilisers, which are used to treat contaminated dredged material. However, new analysis from research firm Oxera indicates that this could significantly increase capital project costs, potentially making economically marginal projects unfeasible.
Impact on coastal economies
The British Ports Association (BPA) has written to Exchequer Secretary Dan Tomlinson urging a rethink. A BPA spokesperson said: "Dan Tomlinson needs to reconsider this decision urgently. Companies across British industry 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."
Labour MPs have privately expressed concerns, and the BPA warns the tax could slow down the clean-up of contaminated waterways and increase flood risks. The UK's maritime sector supports thousands of jobs and billions in economic output, with ports serving as anchor institutions for local development.
Government response
A Treasury spokesperson defended the policy, stating: "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. For the affected material, we are confident there are more environmentally friendly and cost-effective methods available. These reforms will not come into place for a year, giving businesses time to adapt."
The Labour Party had previously pledged in its manifesto to directly invest in ports and, under its Green Prosperity Plan in April 2024, committed £1.8 billion to unlock private investment. Critics argue the new tax contradicts these promises and risks undermining investment in Britain's ports.
