Friday 6 December 2013

Autumn Statement - what did waste get out of it?

Most in the sector will be rightly disappointed with yesterday's Autumn Statement, which contained no new announcements on landfill tax, or indeed much else of direct interest to the industry.

It did however paint a much rosier economic outlook for the UK, based on the latest OBR projections which now anticipate higher growth, lower unemployment and a faster reduction in the deficit.

When combined with our cynical Chancellor, this to me suggests some pre-election tax giveaways and a looser fiscal position for the UK, which, ceteris paribus, will necessitate a faster monetary tightening. Given the ongoing funk in the Eurozone, I would expect diverging interest rates to help drive up Sterling relative to the Euro.

This to me gives some reason for cheer for the waste industry and development of domestic infrastructure. The economic recovery should boost commercial waste arisings, while a stronger pound will make imports of plant and machinery (for use in domestic facilities) cheaper. And European gate fees will go up, eroding some of the competitive advantage for RDF exports at the margin.

The waste industry is a cyclical sector. Let's hope the UK's economic recovery is genuinely sustained.