Annex 1
Letter from HM Treasury to the Quarry
Products Association
I am writing to respond to the allegations which
you made in your memorandum to the Environmental Audit Committee
concerning the aggregates levy. I had not seen a copy of this
prior to my appearance before the Committee on Tuesday 4 April.
I must begin with a very strong objection to
your suggestion that I made a "completely false claim"
during my telephone converstation with you on the evening of 21
March. I stated during this conversation that, in my view, no
viable industry package was on offer at the time that the Chancellor
had to make his Budget decision on whether to proced with an aggregates
levy. I did not say that you had not made an alternative offer
although it is true to say that you did not accede to my request
for a written "best and final offer" of what would be
delivered by your members. I remain puzzled by this omission.
The proposal to develop some form of "Q
mark" was included as one of the 30 proposals in the "New
Deal for Aggregates" published in July 1999, but the details
of this proposed "Q mark" were not discussed with Government
officials until December 1999. DETR officials made it clear then
that these propopsals raised concerns in terms of both procurement
policy and on competition grounds. Nick Raynsford and I stated
at our meeting with you on 8 March that we had been advised that
your proposals were inconsistent with EC procurement directives
and were open to challenge on competition grounds.
The Government's policy is that all public procurement
of goods and services should secure value for money, having due
regard to propriety and regularity. Value for money is the optimum
combination of whole life costs and quality to meet the user's
requirement. Sound advice for the pursuit of value for money will
contribute to the competitiveness of suppliers and contractors.
The EC procurement directives are consistent with the Government's
value for money policy and include specific criteria for the selection
of tenders and the award of contracts based on the principles
of non-discrimination, transparancy and competitive procurement.
They have been instrumental in enabling UK firms to compete for
procurement contracts in other Member States.
The Government is keen to ensure that its environmental
objectives are pursued within this framework. Indeed, the joint
Treasury/DETR note on environmental issues in purchasing, which
was published in March 1999, sets out how such issues can be taken
forward in ways consistent with the policy and legal framework.
In particular, the note explains how Departments can specify requirements
in green terms, in line with their green strategies, and award
contracts on the basis of whole life costs rather than lowest
price.
A voluntary package would be much better able
to deliver the Government's environmental objectives if it applied
to the whole industry. A rival organisation, the British Aggregates
Association, now has over 50 members (including some QPA members)
and has stongly opposed the proposed agreement.
It is not the case that the aggregates levy
will support operators with lower environmental standards. Unlike
the QPA's proposed package, the aggregates levy will apply to
the whole industry. Furthermore, the Government will be consulting
shortly n how the new Substainability Fund can be best used to
deliver local environmental improvements in addition to the impact
of the levy itself.
It was my impression that both the industry
and the Government approached the discussions on a possible voluntary
package in a constructive manner. I believe it will be in the
interests both of the Government and of the industry for these
discussions to continue as we consult on the opportunities to
deliver local environmental improvements offered by the new Sustainability
Fund.
I am copying this to Nick Raynsford and John
Horam, Chairman of the Environmental Audit Committee.
April 2000
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