The levy is paid on every tonne of new aggregates extracted from the ground, in order to encourage firms to use more recycled and secondary aggregates.
Prior to next month's Budget announcement from Chancellor Gordon Brown, the association said the measure was a “highly inefficient” way of promoting the recycling of aggregates.
” The aggregates levy is a mess. It remains environmentally inefficient, disconnected from real environmental issues.“
– Simon van der Byl, QPA
The association, which represents more than 90% of the UK's quarrying industry, believes that there are major doubts and problems over the value of the levy which should be addressed in the Budget on Wednesday, March 16
QPA's chief executive Simon van der Byl 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.”
However Mr van der Byl believes that there is an urgent need to rethink the levy and stressed: “In practice the Treasury has so far failed to demonstrate that the levy has any net environmental benefits.”
Impact
The QPA contends that the 1.60 per tonne levy on new aggregates is a sales tax which is not based on a “proper assessment” of its environmental impact and leaves operators with little or no incentive to improve their performance.
It also believes that though the aggregates industry has improved its environmental performance since the levy rate of 1.60 per tonne was introduced in 1999, this has been because of best practice by the industry and the impact of new legislation.
According to the Treasury the aggregates levy has led to “reductions in noise and vibration, dust and other emissions to air, visual intrusion, loss of amenity and damage to wildlife habitats.”
However the QPA has said that the Treasury can produce no evidence of such impacts and claims the levy is an irrelevance and a highly inefficient means of encouraging recycling in the sector.
Share
In its submission to the Treasury the Association claimed: “Prior to the levy, recycled materials already accounted for a higher share of the UK aggregates market than any other European country according to the Association.
“The levy has increased the supply of recycled materials by about one million tonnes per annum, compared with an overall levy cost of over 400 million a year. Each additional tonne of recycled aggregates supplied due to the levy has therefore “cost” 400 of additional taxation (compared with typical aggregates costs of less than 10 per tonne ex works.)”
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Mr van der Byl said: “The aggregates levy is a mess. It remains environmentally inefficient, disconnected from real environmental issues and a significant cost on the provision of better infrastructure and public services.
“It requires an urgent rethink by the Treasury, and the forthcoming Budget provides the opportunity to start this process,” he said.
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