Government U-turn on aggregates levy in Northern Ireland

LAST month Treasury Minister John Healey announced a dramatic U-turn on the aggregates levy in Northern Ireland, confirming the industry’s concerns that the levy has failed both economically and environmentally since its introduction 18 months ago.

Giving evidence to the Northern Ireland Select Committee, Mr Healey acknowledged that the Government is unable to meet the objectives of the levy in Northern Ireland and indicated that the Treasury is now considering alternatives to the current arrangements with a view to a significant announcement being made in the Chancellor’s pre-Budget report on 10 December.

The Minister’s announcement came shortly after the publication of an independent report on the impacts of the levy in Northern Ireland, produced by the Symonds consultancy on behalf of HM Customs & Excise, which appears to back up much of the industry’s long-standing criticism of the levy.

Welcoming the news of the Government’s apparent turnaround, Richard Bird, executive officer of the British Aggregates Association, said that at last there is a sign that things are starting to crack. ‘We are encouraged by the Minister’s announcement and the findings of the Symonds report, as they confirm what the quarrying industry in Northern Ireland has been saying all along about the harmful effects the levy has had on business and the rural environment,’ commented Mr Bird.

He added that the BAA would now ‘await with interest’ any further announcements from official sources regarding this matter.

Simon van der Byl, director general of the Quarry Products Association, which has recently submitted its own comprehensive assessment of the aggregates levy to the Chancellor for consideration in his pre-Budget report, said the QPA very much welcomed the statement made by Mr Healey and the positive fact that the Treasury was prepared to review policy on the basis of new evidence.

‘It has become increasingly obvious that the levy isn’t working environmentally and is causing significant economic damage. It has self-evidently failed the Government’s own tests of good environmental taxation both in Great Britain and Northern Ireland. These consequences were predicted by the QPA and have now become realities,’ said Mr van der Byl.

‘The QPA welcomes the fact that these failures have now been officially recognized in Northern Ireland, and we believe the Government should now seriously consider withdrawing the levy throughout the UK and focus instead upon effective regulation and environmental initiatives.’