SUPPLEMENTARY MEMORANDUM BY THE DEPARTMENT
OF THE ENVIRONMENT, TRANSPORT AND THE REGIONS (DAR 1A)
ENVIRONMENT SUB-COMMITTEE HEARING—9
MAY 2000
AGGREGATES LEVY
Sustainability Fund (Q11)
Collection costs and the administration of the Levy
are matters for HM Customs and Excise. The revenue from the Levy
will be fully recycled through a 0.1 per cent point reduction
in the employers' National Insurance Contributions, and in a new
Sustainability Fund. No decisions have yet been taken on the Sustainability
Fund. The Government will be consulting shortly on how the Fund
should be targeted to secure local environmental benefits.
Income from the Aggregates Levy (Q15)
The Government expects that the Levy will raise
£385 million in 2002-03, its first year of operation. Future
revenues from the Levy will of course depend on future sales of
primary aggregate in response to demand for construction in the
economy, and how far demand is shifted from primary material to
recycled and secondary materials, which are exempt.
Impact of the Aggregates Levy on the use of recycled
materials (Q19, 20 and 21)
It is not possible to say exactly how much recycled
material will be used as the result of the aggregates levy. However,
exemption of these materials from the levy is likely to give them
a significant price advantage, probably around 30 per cent. This
will give a strong incentive to use them in place of primary aggregate.
In particular, construction and demolition waste can be a very
good substitute for lower-level uses such as bulk fill and sub-base
in roads. We expect the Levy to stimulate further investment in
sites and plant to bring more recycled and waste material to the
market.
To help establish the environmental cost of
aggregate extraction, DETR commissioned research from London Economics.
This showed that there are significant environmental costs associated
with quarrying, including noise, dust, visual intrusion, loss
of amenity and damage to biodiversity, which together, were valued
on a conservative basis at an average of around £1.80 per
tonne of aggregates. The research was based on responses to over
9,600 questionnaires on the local environmental impacts of quarrying
and over 1,000 surveys on the national environmental costs. The
research was published as The Environmental Costs and Benefits
of the Supply of Aggregates, Phase 2 (July 1999) in July 1999.
The Chancellor announced in Budget 2000 that
the aggregates levy would be set at a prudent and cautious rate
of £1.60 per tonne. This will ensure that the environmental
impact of aggregates production not already addressed by regulation
are more fully reflected in prices, ensuring a shift in demand
away from virgin aggregate towards alternative materials such
as recycled aggregate.
Using the short run elasticities produced by
ECOTEC for the Quarry Products Association in 1998, a best estimate
of the impact of a £1.60 levy on the demand for primary aggregates
would be a reduction of around 10 per cent, or approximately 25
million tonnes. These estimates are subject to a wide margin of
error. Some of this demand would be replaced by recycled and secondary
aggregates, with offsetting benefits for firms, which supply those
products. These are often the same firms, which produce primary
aggregates.
ALLOTMENTS
Number of applications to dispose of allotments
that have been refused (Q50)
Two applications to dispose of statutory allotment
sites were refused between January 1997 and October 1999.
PARKS
Cost of parks survey (Q103)
The Heritage Lottery Fund, English Heritage and DETR
have each contributed £10,000 toward the cost of the first
phase of the survey, with the Institute of Leisure Amenity Management
(ILAM) providing its contribution in kind.
Definition of a park used in the assessment survey
(Q108)
Two questionnaires were sent to each authority:
one seeking general information about parks and parks management
in the authority; and the other seeking specific information on
individual historic parks. A definition was not specified; instead
local authorities were invited to say what they considered to
be locally important parks.
HERITAGE EXEMPTIONS
FROM CAPITAL
TAXATION FOR
LANDED ESTATES
Information on estates exempted (Q113)
There is no public register of land exempted because
of taxpayer's confidentiality. However public access to these
lands is a condition of exemption and the heritage landscape management
plan for each exempted estate sets out the public access to be
provided and the way that this is to be made known to the public.
In their annual reports to the Countryside Agency and Capital
Taxes Office, landowners must specifically state that they are
complying with the agreements. The Countryside Agency in their
reports to the Capital Taxes Office must state that, to the best
of its knowledge, it is satisfied that the agreed access is being
provided and promoted in the agreed way. While the Countryside
Agency does not inspect estates each year, it does have agents—usually
local authorities or National Park authorities—who are in
frequent contact with the estates and their owners. The public
access provision and its promotion is a component of the quinquennial
inspections carried out by the Countryside Agency to ensure compliance
with the conditions of the exemption.
Countryside Agency inspections of exempted estates
(Q114)
The Countryside Agency must comprehensively
inspect estates given exemption due, or partly due, to their outstanding
landscape qualities once every five years at least. The Countryside
Agency inspected 63 estates in 1998-99 and 65 estates in 1999-2000.
NON-DOMESTIC
RATING
Non domestic rating—out of town centres
(Q131)
For retail warehouses, as for all rateable properties,
the requirement is to determine the rental value (rateable value).
This is arrived at by considering the evidence of rents for similar
properties fixed at or about the valuation date—for the
2000 revaluation that is 1 April 1998. For all properties the
rent agreed is a reflection of the benefit expected to be obtained
from the occupation of the property. This will depend upon a number
of factors but principally the location, and use to which it can
be put within the legal and planning controls. Where a property
is suitable solely for use for warehousing or storage the value
attributed to it will reflect that use and may be at a relatively
low level. Similarly a property which has the potential to be
used for the retailing of goods to the public will attract a rent
which is usually significantly greater reflecting the greater
profitability of that use.
Some properties are flexible as to the extent
to which they can be used for either retail or storage but where
demand exists a retail use will generally predominate. Retail
warehouses represent perhaps the most flexible space combining
in one building the potential for both retail and storage use.
Because of this flexibility it is common to value all of the space
within the building at a level reflecting the potential for both
uses. The values adopted follow the market for these properties
in the particular location but tend to be higher than for storage
and lower than for conventional prime retail units.
The absolute level of value of a particular
retail warehouse will depend on a number of factors including
the range of goods, which can be sold, and the supply and demand
for such premises in the locality.
Retail Warehouses have in recent years been
one of the growth areas of the retail market and for the year
2000 revaluation the values have increased on average by 40 per
cent; approximately double the overall increase in retail property
in general and approaching three times the increase on solely
storage warehousing.
| 
