Operators urged to file aggregates levy protection claims

MORE than seven months on from the December 2008 decision by the European Court of Justice to order a review into the original legal justification for the UK aggregates levy, the British Aggregates Association (BAA) is continuing to urge its members to consider how best to protect their position pending the final outcome in the Court of First Instance.

The Association, which has fought against the aggregates levy since its introduction by the UK Government in April 2002, has long claimed the levy is illegal under state aid rules and believes it is unlikely to survive in its present form.

At the hearing last December, the European Court of Justice (ECJ) overturned the 2006 decision by the Court of First Instance (CFI) that the Aggregates Levy was lawful and did not constitute state aid, and sent the case back to the lower court for reconsideration.

According to the BAA, the ECJ’s decision was in line with the earlier opinion of the Advocate General, who recommended that the CFI judgment should be quashed. The CFI is due to review the case later this year.

Commenting on last December’s ruling, BAA director Robert Durward said it appeared that the CFI had little option but to declare that the levy, as it stands, does constitute illegal state aid and must be modified or scrapped.

In the meantime, the Association has been advised by its lawyers, Herbert Smith LLP, that protective claims should be made in respect of levy already paid, while with regard to future payments, quarry operators may continue to make payments of the levy followed by protective claims for repayment.

However, the lawyers say operators may also wish to make future payments of the levy conditional, as this type of payment represents a possible counter to the ‘undue enrichment’ argument, which has been mooted as an obstacle to repayments if the levy is found to be illegal.

According to the BAA, a number of its members are already following the legal advice, and it is urging all quarry operators to contact the Association for further information.

‘Although the Treasury must now realize that the levy has only a limited time left, they seem determined to collect every last penny possible,’ commented Mr Durward.

‘In many parts of the country, the price of aggregates and concrete products has now fallen to pre-levy levels. In these difficult times, operators are more than justified in doing whatever they can to protect their viability.’