21 March 2007

Gloom as Gordon Hits Industry with Yet More Tax

The Chancellor of the Exchequer announced today in what is expected to be his final Budget that the Aggregates Levy will rise to £1.95 per tonne from April 2008, amounting to an increased tax burden of between £70m and £80m. However, this is just one of a number of increases that conspire towards a substantially larger operating bill from 2008 onwards.

In addition to the Levy increase, the Government also introduced a 26% rise in gas oil duty amounting to an estimated £6m increase on the aggregate industry's annual bill, alongside a hike in inert landfill taxation of 25%. These increases will bring about an inevitable increase in costs for the construction industry at a time when spending is under close scrutiny, particularly on high profile public projects like the Olympics.

The Aggregates Levy, however, remains the most difficult for the industry to swallow. Introduced in 2002, the Levy has had little environmental impact making it difficult to justify its existence as a green tax.

It is clear from today's Budget announcement that the Government sees this £80m Aggregates Levy increase as a cash cow and is trying to hoodwink the public into believing that this is a decision made in the best interests of the environment. Coupled with the other hikes within the Budget, the quarrying industry and its customers have a right to feel gloomy after Gordon Brown's address.

Simon van der Byl, Director General of the QPA, said: "Under the guise that Government is caring for the environment; the industry has been used once more to generate a quick buck for the Treasury. But as if the increase in the Levy wasn't bad enough, we have been hit with further increases in taxation that conspire to bring unjustified and unavoidable expense to the industry. If Government is serious about good green taxation it needs to reward industries for improving environmental performance rather than the perverse principle evident with the Aggregates Levy of increasing taxation as environmental performance improves."

ENDS

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