MPA calls for aggregates levy freeze

THE Mineral Products Association (MPA) has called on the Government to freeze the rate of the aggregates levy and not to implement the planned 2009/10 increases, in light of the dire market conditions currently facing the industry and construction.

From 1 April 2009 the levy is set to increase by five pence per tonne from £1.95 to £2.00, which the Association says will increase industry costs by up to £10 million in 2009/10.

MPA executive director Simon van der Byl said there could not be a worse time than this to increase the tax burden on industry. ‘Market conditions deteriorated sharply in August 2008 and in recent months aggregates sales volumes have been running over 30% lower than a year previously,’ he commented. ‘We have therefore urged the Treasury not to implement the planned aggregates levy increase.’

He added that the scaling down of economic and construction forecasts indicated that markets would continue to decline during 2009.

‘In these circumstances the Government should be looking to support and not penalize our industry. Ten million pounds may not sound a lot, but at the current time the Government must avoid measures which could have a disproportionate marginal effect on the industry.’

Pointing out that the industry had already lost over 6,000 jobs and warning that this figure could increase significantly, Mr van der Byl said there was no economic or environmental justification for any increase in the levy at the current time.

In the longer term, he said the MPA maintained the view that there was limited evidence that the aggregates levy had achieved claimed environmental benefits – and that even if it had, these dividends had already been realized and increasing the levy would not generate any further benefits.

‘We believe that the case for any future increases in this ‘environmental tax’ cannot be made,’ he said.

Meanwhile, the British Aggregates Association says it has not yet received a response from Treasury Minister Yvette Copper to a letter sent in February calling for the suspension of the aggregates levy in light of the European Court of Justice (ECJ) December 2008 judgement on the legality of the levy.

In the meantime, the Association has written to all of its members urging them to take immediate action on precautionary claims following the ECJ ruling.