MPs slam aggregates tax

Labour, Conservative and Liberal Democrat MPs have joined the clamour over the aggregates tax proposed in last month's Budget. Chancellor Gordon Brown announced that a levy of £1.60/t was going to be introduced on aggregates sales, starting in April 2001.

Last week, former Chancellor Kenneth Clarke led the opposition to the tax during the second reading of the Finance Bill. Clarke said: "The climate change levy, the increase in the landfill tax, and the aggregates tax are good little earners for the Treasury. They [Government] know that they can dress up the revenue raisers with an environmental cloak. As a result extraordinary damage is being done to industry."

Labour MP Eric Illsey said it will be "a tax on jobs".

Liberal Democrat MP David Heath asked whether Illsey agreed that "the tax, because of its bad design, will not promote recycling materials rather than using virgin stone, and that it will attack the very companies that are installing the infrastructure necessary to improve the environment?

"Will they not be worse off for taking that action?", asked Heath. Illsey replied, "The tax will not promote good practice in the aggregates industry. The good operator and the bad operator will be equally affected."

Tory MP Christopher Gill said: "It seemed rather unprincipled of the Government to encourage the Quarry Products Association to believe that if it can come up with satisfactory answers that addressed the Government's objectives, no tax would be imposed."

Jerry McLaughlin, economist with the Quarry Products Association, said the association will keep up its campaign against the tax. He added: "The Government does seem defensive about it."

The British Aggregates Association, which represents smaller quarry operators, is also taking up the cudgel and has condemned the Council for the Protection of Rural England for supporting the tax.

BAA director Robert Durward said, in a letter to CPRE: "This tax will cause massive commercial damage to all quarry operators, but more especially the smaller, family-type business, which provides much-needed employment in rural areas.

"It will actually cause environmental damage as many of these smaller operators will close, forcing their customers to source from further afield, with a consequent increase in road haulage. You will also note that the Chancellor, while paying lip service to the green lobby, has quickly spirited the money away to be used as an electioneering tool, by reducing, fractionally (0.1%), employers' National Insurance Contributions."