QPA claims Treasury has got its sums wrong on aggregates tax
Contrary to government assertions, the Quarry Products Association says the planned aggregates tax will not be able to deliver promised environmental improvements to communities affected by quarrying.
The Government has claimed that the £1.60 a tonne tax on aggregates will generate revenue to pay for a 0.1% reduction in employers' National Insurance charges and a new sustainability fund 'to deliver local environmental improvements'.
The Treasury has already admitted that its plans to reduce National Insurance charges will cost œ350 million a year, but based on current levels of demand the QPA says the aggregates tax will generate only £330 million per annum.
As a result, the new tax will not produce any funding for the Government's promised sustainability fund, and will not even cover the planned cut in employers' National Insurance charges, warns the QPA.
In opting for the tax, the Government has rejected the QPA's 'New Deal' package of environmental measures, which would have included a £25 million a year Sustainability Foundation earmarked to finance local environmental initiatives.
In a scathing attack on the Treasury, Simon van der Byl, director general of the QPA, said: 'The Government has made the wrong economic and environmental decision in rejecting the QPA's 'New Deal' package in favour of an aggregates tax.
'It is now apparent that the Treasury is incapable of doing simple sums and has massively over-committed aggregates tax revenue. Local communities have lost the œ25 million of funding proposed by the QPA and gained a new sustainability fund which has no prospect of funding.
'This financial mess typifies the superficial and misguided approach of the Treasury in rejecting the QPA's proposals, which would have delivered real environmental benefits to local communities.'
According to the QPA, aggregates demand would have to rise by 13% following the introduction of the tax for tax revenues to match the sustainability funding proposed in its 'New Deal'!
