BPF Response To Autumn Budget 2024
The Chancellor of the Exchequer (the Rt Honourable Rachel Reeves MP) delivered her first Budget on Wednesday 30th October 2024.
It raised taxes by £40bn and outlined the priorities over the coming years across all sectors of the UK economy. Launched alongside the budget was the much awaited response to the mass balance consultation within the Plastics Packaging Tax (PPT) which will now accept the mass balance approach with fuel exempt. To access the full budget, please click here.
Below is the British Plastics Federations (BPF) statements on the budget...
Philip Law, Director General, British Plastics Federation
"The plastics industry is a direct employer of 150,000 people and, with a reasonable multiplier, we have at least 500,000 dependents in the UK. We have a high sensitivity to the impact on employment.
The Budget Statement, with its manipulation of fiscal tools is only part of the story that matters. We need to add on the costs to industry of the Employment Bill.
Specific aspects of the Statement were very welcome such as the positive declaration that mass balance is an acceptable form of measurement for the chemical recycling of plastics. However the wider growth policy needs more substantiation and development.There was little to say how manufacturing will be incentivised to partner with government in delivering infrastructure projects and the house building programme.
The unpalatable area is the additional NI costs on employers allied to the broader extra-budgetary costs relating to employment law reform.This will inevitably turn manufacturers towards more use of AI and against the employment of human beings.
Having said this, it was always going to be a difficult budget with more funding required for healthcare, education and defence. Let’s hope that the positive aspects of the statement become consolidated into the development of the Industrial Strategy and a 10 year Infrastructure Plan. Only then we will know if ‘short termism’ has come to an end, as the Chancellor claimed."
Mohamed Elkhalifa, Public Affairs Manager, British Plastics Federation
"I wanted to start by commending the immense task that civil servants have undertaken over the past few weeks/months. The Chancellor announced what is Labours first Budget in over 14 years.
Whilst welcoming the announcement on the acceptance of mass balance as an accounting method within the Plastic Packaging Tax (PPT), the Autumn Budget announcement today was always going to be tough.
However, with an increase to the National Living Wage (NLW), National Insurance Contributions (NIC) made by employers and the reduction of the threshold for payments, businesses are going to take a substantial financial hit. There ought to be a dedicated fund to help businesses, especially SME’s with these new financial burdens.
We had encouraging conversations prior to the budget being announced with various MPs on some of these key areas and can see these reflected in the budget announcement today. We look forward to cooperating with government in what we hope will be a new era of partnership between government and industry.”
Helen Jordan, Sustainability Manager, British Plastics Federation
"The British Plastics Federation (BPF) welcomes the response to the consultation on chemical recycling and adoption of a mass balance approach. The BPF is pleased that the government have noted the key points made within their response on how to ensure investment in chemical recycling takes place within the UK. The key outcome of the consultation is that a mass balance approach with a fuel use exempt allocation method will be allowed within the Plastic Packaging Tax (PPT). However, as yet, there is no date set for this being implemented.
The government have also committed to removing pre-consumer waste from the Plastic Packaging Tax and will align the timescale for this to the acceptance of mass balance. The reclassification of pre-consumer for the purpose of the PTT will be difficult to navigate and will need some serious investment in the recycling infrastructure in the UK. The reinvestment of the money from the PPT back into recycling infrastructure in the UK would help to achieve this.
The BPF looks forward to working further with the government the implementation of mass balance within the PPT."
Darren Muir, Finance Director, British Plastics Federation
“While we recognise the government’s commitment to enhancing wages, the combination of increased employer NI and higher minimum wage requirements is a challenge for an industry already under significant cost pressures. For many businesses, particularly small and medium-sized enterprises (SMEs) these added costs will present a real strain on their ability to maintain current operations and employment levels. For me there are a number of concerns raised in this budget…
1. Impact of Increased National Insurance: The announced rise in employer NI contributions will directly increase operational costs for businesses across the plastics supply chain. This move risks reducing companies’ ability to invest in new projects, upgrade facilities, or expand their workforce, especially during a period when many are still recovering from recent economic uncertainties.
2. Challenges for SMEs: A large portion of BPF’s members are SMEs, who are likely to feel the impact of these cost increases the most acutely. As SMEs work with tighter margins, the combined NI and wage increases may limit their ability to compete, potentially leading to scaled-back operations and reduced hiring.
3. Strain on the Workforce: The rising minimum wage, while beneficial for employees, will create additional financial pressure on companies, particularly those already struggling to manage other rising costs, such as energy. This increase, paired with higher NI, places significant pressure on employers striving to keep skilled jobs in the UK.
4. Competitive Positioning: As businesses absorb these cost increases, there is a risk that some companies may seek lower-cost alternatives overseas, potentially impacting UK employment and reducing the capacity of the domestic plastics sector.
While the BPF acknowledges the government’s intent to support workers, it is essential that measures are introduced to mitigate these financial pressures. The BPF calls on policymakers to consider additional support mechanisms or tax relief options to help the plastics industry manage these increases and protect jobs within the UK.”
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BPF Member Exclusive |
NOTE: For the specific statement on "Plastic Packaging Tax – Mass Balance Approach" please see page 137 of the full budget document HERE. The extract of which is below...
"5.95 Plastic Packaging Tax – Mass Balance Approach: Publication of the Summary of Responses – To support use of and investment in advanced chemical recycling technologies, businesses will be permitted to use a mass balance approach to evidence recycled content in chemically recycled plastic for PPT."
