MPA broadly welcomes Budget measures

Budget generally positive for the sector but support for energy-intensive industries remains a major concern

THE Mineral Products Association (MPA) has, in overall terms, welcomed the measures announced in this week’s Budget and is encouraged by the economic and public expenditure forecasts. However, it says the outstanding concern is that the Budget measures designed to support and compensate energy-intensive industries will be of limited value to the sector unless the cement and lime industries are in scope for support.

According to the Association, the positive news for the mineral products sector is that:

• The Aggregates Levy will remain frozen at £2.00 per tonne for 2014/15
• Climate Change Levy relief for the asphalt, cement, ready-mixed concrete and concrete products, lime, mortar and dimension stone industries has been announced
• Further support for energy-intensive industries has been announced, but a significant MPA concern is that cement and lime may not benefit sufficiently
• Additional funding of £200 million has been announced for road maintenance and £140 million for flood defences
• ‘Help to Buy’ will be extended to 2020 and there will be further initiatives to encourage housing development
• The economic outlook is improving, with the Office for Budget Responsibility (OBR) forecasting GDP growth of 2.7% this year, 2.3% in 2015 and 2.6% in 2016 and 2017.

Nigel Jackson, chief executive of the MPA, said: ‘The Aggregates Levy freeze and Climate Change Levy relief for mineralogical industries have been key areas of MPA representation.  These announcements are great news which will yield important cost savings as the industry recovers from five very tough years of demand 30% below pre-recession levels.

‘Furthermore, the additional funding for road maintenance and flood defences, and continuing support for new house building through the ‘Help to Buy’ scheme, will help boost key construction markets.’

He added that the MPA was also pleased to see the time extension and increased value of the annual investment allowance, which the Association had called for, and the widening of the scope of mineral extraction allowances to include planning costs.

Mr Jackson continued: ‘Our outstanding concern is that cement and lime should be brought into scope of the measures designed to support and compensate energy-intensive industries. Unless these essential products are added to the approved list of energy-intensive industries there will be major additional energy and climate change-related costs incurred by these indigenous industries, which will seriously damage competitiveness.

‘We are disappointed that the suspension of certain Aggregates Levy exemptions from 1 April will lead to some increases in the scope of the Levy relating to clay, but government has listened to MPA calls for clay for quarry restoration to continue to be exempt.

‘Overall, this package of Budget measures is likely to reduce uncertainty and encourage investment as the recovery gathers momentum.’