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New taxation proposals have significantly effected manufacturing industry, particularly the Landfill Tax and the Climate Change Levy.
The Landfill Tax is a levy on the disposal of waste to land to encourage waste minimisation. A high rate is applied to most forms of waste with a lower rate for particular inert materials. The production of several basic chemicals from minerals produced by-products or impurities that had to be disposed of. Some such as magnesium hydroxide and calcium carbonate were returned to the workings where they were originally extracted in the form of brine. Others such as calcium sulphate were used as essential engineering materials in the disposal of other waste to land. The original proposals called for these materials to be taxed at the higher rate which would have imposed a major burden on associated industries.
The Climate Change Levy is a tax on most forms of energy used in by industrial or commercial concerns and was introduced to promote energy efficiency. The production of chlor-alkali products by electrolysis uses very large amounts of electricity — in essence it is a raw material in the same way coke is used to make steel. However, unlike coke in steel making, no exemption was to be made for chlor-alkali electrolysis which would have made the whole process completely uncompetitive by international standards — a major strategic threat costing tens of millions of pounds.
In both cases lobbying was undertaken to explain the problems these proposals presented to industry. Targets included Customs and Excise who were responsible for the taxation proposals, other branches of the civil service and with politicians. As a direct result of this work the Landfill Tax proposals were changed to apply the tax at the lower rate or exempting it entirely. An exemption from the Climate Change Levy was achieved for electricity used in chlor-alkali electrolysis thereby significantly ameliorating its impact.
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