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Levy costs £410m, aggies body claims

MATERIALS Quarry Products Association says aggregates tax breaks Treasury environment rules

EACH additional tonne of recycled material supplied since the aggregates levy was introduced has cost more than £400 in extra taxation, quarriers have claimed.

They slammed the Government for its continued reliance on the stone tax and protested that it breaks the Treasury's own rules on environmental taxation.

Industry body the Quarry Products Association wrote to the Treasury last week to highlight the levy's inefficiency.

The letter points out that the levy is supposed to be an environmental tax and as such is subject to specific Treasury rules.

Simon van der Byl, QPA chief executive, challenged the Government to show it complied with those guidelines.

He said: 'The aggregates levy is nominally an environmental tax.According to the Treasury's own rules environmental taxes are supposed to 'deliver real environmental gains cost effectively'.

But in practice the Treasury has so far failed to demonstrate that the levy has any net environmental benefits.'

In the letter the association estimates that the direct cost to construction clients of the £1.60 per tonne levy is £350 million.

On top of that the cost of the extra one million tonnes of recycled material that the tax has generated adds up to at least £60 million - a total cost increase of £410 million, or more than £400 for each extra tonne of recycled material that has entered the market since the tax began.

It also blasts Treasury claims that it has led to 'reductions in noise and vibration, dust and other emissions to air, visual intrusion, loss of amenity and damage to wildlife habitats' The QPA said there was no evidence to back this statement and that the reductions had been achieved by industry good practice, legislation and regulation. It labelled the levy 'an irrelevance' QPA director of economics Jerry McLaughlin called on the Government to cut the rate of the tax at least.

He said: 'If the Government is serious about running the levy as an environmental tax then it is only sensible to drop the rate, because quarrying's environmental impact has dropped.'

The aggregates levy was introduced in April 2002 at a rate of £1.60 per tonne on most newly quarried aggregates but quarriers battled against it from the start, labelling it ill-conceived and unfair.

The Treasury was unavailable for comment.