MPA repeats call for limit to burdens and costs

16 January, 2014

Association continues to press government on cumulative burden of tax and regulation on the sector

THE Mineral Products Association (MPA) has again highlighted the regulatory cost burden on the mineral products sector to government as preparations for the Chancellor’s March Budget take place.

MPA research in recent years has highlighted the ever-increasing scale and cost of this burden on the mineral products industry, as MPA chief executive Nigel Jackson explained: ‘The MPA remains extremely concerned at the identified cumulative cost burden on our sector arising from environmental and planning measures, and the potential for these costs to increase even further in future years.

‘There remains a continuing problem that each new measure which imposes new costs is evaluated and introduced without consideration being given to the cumulative impact of such legislation and regulation.’

Mr Jackson continued: ‘2014 needs to be the year when the penny drops within government that regulatory costs need to be reasonable and proportionate so that industry can invest with confidence. Such investment will be critical if our industry is to support and enable the economic recovery, notably in areas such as infrastructure, transport and housing development.’

Key findings from the MPA’s latest assessment include:

Total sector costs of identified measures are £400 million per annum now and likely to rise to £665 million per annum from 2020.
Climate change and energy measures are currently equivalent to 17% of the Gross Value Added (GVA) of the cement industry, but this proportion could increase to 77% from 2020 (from £51 million per annum to more than £250 million per annum).
The costs to the lime industry of energy and climate change measures will increase from £8 million per annum in 2013 to £49 million per annum from 2020.
Even for the less energy intensive aggregates, asphalt and ready-mixed concrete industries the cost of these measures will increase from £20 million per annum now to £48 million per annum from 2020.
These measures include present and future costs associated with measures such as the European Emission Trading Scheme, the Renewables Obligation, Carbon Price Support tax and Climate Change Levy.
Industry businesses have to manage the European Union Emissions Trading Scheme (EUETS), Climate Change Agreements (CCA) linked to the UK Climate Change Levy (CCL) and the Carbon Reduction Commitment Energy Efficiency Scheme (CRC), all focused on carbon reduction but with different scopes, different measurement requirements and potentially punitive penalties for inaccurate reporting.
The annual cost of the aggregates levy is equivalent to 35% of industry GVA.
The costs are in addition to the £900 million per annum costs of other taxes such as fuel duties and business rates.
In addition to these headline figures, there are numerous and growing stealth charges arising from regulatory organizations such as the Environment Agency and planning authorities for planning applications and related discussions, licences, meeting and monitoring charges, and other development charges.
The MPA has identified 228 items of planning legislation and regulation which have to be managed by the industry.
Government has taken some action to moderate some of the regulatory burden on the sector but at the same time companies are having to manage new measures, eg the pointless application of CE marking requirements to the sector.