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Mr. Rogers: I hope that the hon. Gentleman will not continue to use the word "environment" when talking about this tax. He must realise that the tax will not affect the environmental position and that a regulatory framework already exists. This is a money-raising tax, and has nothing to do with the environment.
Mr. Heath: I contend that it is possible to inject into the levy a little element of environmental protection, which it does not possess at the moment. The hon. Gentleman chides me for not being sufficiently aggressive towards Ministers early in my speech, but I wish to set out the proposals as I see them, and then to mention one way of improving them.
Mr. Rogers: The hon. Gentleman should get it right; I am aggressive not towards my right hon. and hon. Friends on the Front Bench, but towards the tax, which is wrong and ill conceived.
Mr. Heath: Clearly the hon. Gentleman is against the sin, but not the sinner. In my observations I will encompass both.
Mr. John Bercow (Buckingham): I understand the hon. Gentleman's eminently reasonable concern that the details of the rebate scheme should be published before the commencement date of the levy, but why will he not bestir himself one little bit further and make the reasonable demand that the Government publish those details before the passage of the Bill?
Mr. Heath: I am interested not in the passage of the Bill but in the start of this iniquitous tax. I have already voted against it in the Budget debate, so my position is absolutely clear. I am trying to get the Government out of the hole that they have dug--which is perhaps the appropriate analogy in this context. They are making exactly the same mistake as their predecessors made with the landfill tax. The way in which the tax is presented reeks of environmental rectitude, but it does absolutely nothing for the environment and hits the wrong targets.
The great problem with the tax is that it will not work. The amendment would help it to meet at least some of the Government's stated objectives. The tax will not improve the industry's environmental performance or create a more sustainable aggregates supply. The voluntary levy forcefully advocated by the Quarry Products Association and others would have met some of the objectives.
Crushed rock quarries have by-products, exactly as china clay quarries and others that are exempted from the provisions do. There are scalpings, overburden and washings. Scalpings make up about 40 per cent. of the material produced in a limestone quarry, but they have a very limited market. They are used for various jobs, but there is a strict limit to what people are prepared to pay for them.
If scalpings are included in the levy, they will not be sold, and other materials will be used. Indeed, the Government have clearly stated that one of their objectives is that china clay spoil should be used as an alternative. What, though, is to happen to the unsold scalpings, which thereby become waste?
Sir Robert Smith (West Aberdeenshire and Kincardine): They will become subject to landfill tax.
Mr. Heath: Indeed, they could be doubly taxed if they were moved off the quarry.
The scalpings will have to be dumped, either in piles on the edge of the quarry or impacted into the base, which effectively sterilises quality rock lower down and takes up the productive floor of the quarry, to no one's benefit. It is possible to wash scalpings and separate out the clay, but that will not be done if the aggregates levy is applied, because it will be completely uneconomic.
The same applies to overburden, which is a substantial by-product of aggregates extraction--in a basalt quarry, for example, or when much of what is taken out is overlying jurassic oolitic limestone. That has to be taken off first if one is not to sterilise the stone that one wants, and it has to go somewhere. It has low quality uses, but if a levy is put on it, it will have no use and no market.
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If there is no system of local environmental improvement and no exemption scheme, we shall effectively be removing the white hills in Cornwall that we have all seen and agree should not be there--the moonscape around St. Austell--and replacing them with piles of red earth in Somerset. People will say, "What a shame, Somerset used to be such a beautiful county and look what they have done to it." We will create a wasteland, a moonscape, simply by applying this tax. I do not think that that is the Government's intention, but it is the inevitable outcome of what they propose unless the clause is amended.
With products that are derived from aggregates, there is a strong environmental argument that, given that we need pre-cast concrete products, the best way of producing them is as near as possible to the point of production of the stone. Otherwise, large quantities of stone are moved around the country to concrete works to form pre-cast concrete products that are then moved somewhere else, resulting in unnecessary lorry movements and adding to the environmental cost of the product for no benefit. Yet if the levy is applied in its present form to those added-value manufacturing processes, they will be priced out of the market. Producers in other countries will make those products--and although the Bill imposes a levy on raw aggregate, there will be none on manufactured produce. As a result, it will be non-commercial to use a local by-product to produce locally processed goods, and imports will be sucked in to undercut them, simply because of a misapplication of the levy.
Mr. Oliver Letwin (West Dorset): Does the hon. Gentleman agree that there are two ways of solving that problem, which is obviously acute if we want to stop 10,000 or so jobs being exported unnecessarily? The Government could adopt either the very wide exemption scheme proposed in his amendment, or our proposal in amendment No. 26, which redefines aggregates in such a way as to eliminate pre-cast concrete from the levy.
Mr. Heath: The hon. Gentleman is right. I know that I would be out of order were I to refer directly to the amendment to which he alludes. However, there are undoubtedly two ways of dealing with the problem. It is a very big issue in terms of potential employment and revenue loss. The estimated cost to the pre-cast concrete industry is £40 million; the levy will represent a 25 per cent. take on its profits. That is an unsustainable process of taxation, and it will simply drive jobs out of the country. There might be an argument for that if the levy achieved the environmental effects claimed by the Government, but it will not. It will have quite the reverse effect: it will be of disbenefit in environmental terms.
Sir Robert Smith: I emphasise my hon. Friend's point about the disbenefit in environmental terms. Transporting such products will clearly be environmentally damaging to the communities and the environment through which they pass.
Mr. Heath: My hon. Friend is absolutely right. He recognises the problem in his constituency, which has both aggregate producers and a thriving port. It is obvious that we must find other areas of supply.
Mr. Andrew Tyrie (Chichester): Does not the most severe environmental damage in many areas result from
the transport of the aggregates rather than the digging? Does that not strengthen even further the point made by the hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith)?
Mr. Heath: The hon. Gentleman, too, is absolutely right. Indeed, his point is supported by the research that the Government themselves commissioned into the environmental disbenefits of the quarrying industry. The research found that the main problem was quarry lorries going past people's doors and windows along roads that were never built to accommodate them. That is the aspect of quarrying that people find most worrying--much more so than the occasional distant thud of an explosion that everyone expects anyway, or even the holes in the ground, which are often masked. If the hon. Gentleman came to the Torr works, which is one of the biggest quarries in the country, he would not know it was there until he arrived at the gates, because a great deal of landscaping has been done to ensure that it is not evident. He would, however, be aware of the heavy transport passing through all our villages--not so much from Torr, which has provided a railhead, but certainly from many other quarries. That has a substantial effect on local communities.
Mr. Tom Levitt (High Peak): The hon. Gentleman makes a fair point about transport, but is he aware that the Government already provide schemes whereby grants can be given to quarry companies to improve rail access, as has happened with great success in some constituencies, including my own?
Mr. Heath: I have just said that the Torr works has a railhead, as does the Hanson quarry at Whatley. Those are very welcome, but the tax could, if designed properly, encourage more companies to have one. In its present form, with no rebate scheme, the levy will discourage companies from taking steps to improve the local environment. There is no competitive benefit for them; indeed, there is no benefit beyond public-spiritedness and a good relationship with their local communities. I fear that the Bill will result in enormous environmental disbenefit in communities such as mine.
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