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Mr. John Burnett (Torridge and West Devon): Does my hon. Friend agree that many constituencies, including mine, have virtually no railways, but several quarries and utterly unsuitable roads?

Mr. Heath: My hon. Friend is right. It was ever thus, I fear; when I was leader of Somerset county council, the minutes of the council's first meetings were kept in my office, and when I read the minutes of the very first, I found a discussion of the difficulties caused by quarry lorries in the Mendips and their effect on local roads. That meeting was held in 1889, so the issue is of very long standing.

Mr. Alasdair Morgan (Galloway and Upper Nithsdale): Is it not likely that the condition of the roads will be even worse once the tax is imposed, as local authorities, whose budgets will be drained by the tax, will have even less to spend on them?

Mr. Heath: It is an interesting by-product of the levy that the cost will fall heavily on local authorities, which will be trying to repair the infrastructure damaged by heavy transport.

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We were touching on the issue of employment loss in the concrete industry as a result of these measures. There is the same potential in the quarrying industry itself. The Government estimate that the introduction of the levy will reduce demand for aggregate by 10 per cent.--although, interestingly, not demand for the highest grade aggregate, which is the main driver of a quarry's output. The reduction will be in demand for the lower grade aggregate, and will have little direct financial benefit in terms of the demand for new permissions. At the same time, the changes in specification will increase costs for the primary producers. As a result, cost-saving will be achieved only by passing on costs to local authorities, or by reducing the number of people directly employed in the industry.

The Government's claim for the tax is that the surplus will go into a sustainability fund. That was the way in which it was originally sold to local communities in quarrying areas. They were told that it was a great idea because some money would be taken out of the quarrying industry and put into making their local environment better. However, the proposals and the responses to the consultation on the sustainability fund do not for one moment suggest that communities local to the quarries will benefit.

I have a great deal of time for the notion that something should be done about St. Austell, which is in the constituency of my hon. Friend the Member for Truro and St. Austell (Mr. Taylor). If money is available to do something about the China clay spoil tips, no doubt he will welcome it. However, to sell that as a direct benefit to communities affected by quarrying in Somerset is stretching the tail a little further than may be appropriate.

When the Government's own press release of 25 August states that local communities affected by quarrying are set to benefit from environmental improvements, I have to question the good faith of those proposals. Those benefits are not in the draft proposals. Indeed, the draft seems to ignore the responses of the minerals authorities directly affected. I know that the Financial Secretary to the Treasury has received a letter from the minerals planning forum of Somerset county council stating that in terms. It appears to the forum that the views of Somerset, of Derbyshire and of Leicestershire--the key aggregate producing areas, which between them produce almost half of England's crushed rock aggregates--have been almost completely ignored in the proposals for the administration of the sustainability fund. There is a real suspicion that, in relation to their economies and the quarrying industry, much more will go out of those areas than will come back.

That is why a rebate scheme would be of direct benefit. Such a scheme would actually specify the local environmental improvements to be undertaken by the quarrying companies, and would give them a direct commercial advantage for having done the things that we all want to be done. Indeed, the industry itself has argued strongly for that. I do not want to put words into the industry's mouth--it is clearly against the concept of an aggregates levy in toto--but having accepted that it is the Government's intention to impose such a levy, the industry is saying, in effect, "Let's have a sensible rebate scheme, and let's have it before the tax starts to operate."

As the Financial Secretary will know, one suggestion made by the Quarry Products Association is that a benchmark might be a formal environmental management

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system such as ISO14001. That is one suggestion among many, but it would provide a framework whereby some of the benefits from the imposition of the tax would directly accrue to the communities affected; it would bring the benefits home. That sensible objective should commend itself to hon. Members on both sides of the House; indeed, I suspect that the proposal represents what the Government will eventually do.

Mr. Tyrie: That objective is the only reason for suggesting it.

Mr. Heath: I agree absolutely.

5.15 pm

My principal quarrel today is with the fact that, for reasons that escape me, the Government are going ahead with a commencement date for the aggregates levy without having in place the main objective--some may say the subsidiary objective--of the local environmental rebate, which would make the levy work in favour of local communities and drive down the environmental costs, as well as avoiding an increase in the commercial costs to the companies involved. That would be put right by amendment No. 4--in combination with new clause 1, which we are not allowed to discuss now, but which will be debated in the Standing Committee.

Mr. Edward Davey: My hon. Friend is making a powerful speech. Will he elaborate a little on the type of environmental protection measures that he wants to be included in his rebate scheme? In particular, he referred to the environmental damage done to local communities by the noise and dust from the lorries that carry the aggregates. Does he want his scheme to include measures to tackle that problem, or should it be dealt with by separate regulations?

Mr. Heath: My hon. Friend is right to suggest that some things are susceptible to regulation, but having wrestled with the problem for more years than I care to remember, I can tell him that it is very difficult to do by regulation all that is required. An incentive is needed for the companies to take the measures that they know they should implement if they can, because it is sometimes commercially impossible for them to do so. There is an obvious difference in attitude between the companies that take their responsibilities seriously--very often, those are the bigger companies--and those that do not. There is no "big is bad and small is good" argument here; it is often the other way around in this context.

Many of the companies are prepared to develop the infrastructure that makes a difference. Railheads were mentioned earlier, and they make an enormous difference. If a large quantity of stone can be moved by rail from Somerset to Surbiton--which is done every day--a vast number of lorry movements in inadequate lanes are prevented, which makes a big difference to local communities. If reinstatement schemes are properly funded and made to work, a huge difference is made to the use to which the quarry is put after production.

Many quarries use old permissions, which were granted in terms that no responsible planning authority would use at this stage in the game. Those companies will respond

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if they are given an incentive to implement all the measures that they could, if they could afford them, and if they are not commercially disadvantaged by doing so. Their proposals show that they are willing to respond. I find it inexplicable that, because of some form of misplaced machismo, the Government are determined to go ahead with the levy without including the necessary rebate structure, which I am proposing. The rebate would make a huge difference to the effectiveness of the tax in terms of its environmental benefits, and I commend it to the Committee.

The Chairman: May I remind the Committee that there is a limited amount of time to debate such matters, and it would be helpful if hon. Members had regard to the fact that other colleagues wish to contribute? This is not a stand part debate, and although it has ranged reasonably widely until now, it cannot be expanded into a stand part debate. Hon. Members who want to contribute to a stand part debate should bear that fact in mind in making contributions on the amendment.

Mr. Rogers: I have a little knowledge not of the taxation system, but of aggregates. I support all the Government's efforts in raising and spending taxes in a very positive way. My constituents and many poorer areas of the country have certainly benefited enormously as a result of the Government's financial and economic policies.

I shall not support the rebate suggestion in the amendment, because it merely tinkers with the central issue that the Committee must address. From what to what will the rebate be made? If the Government cannot get the sustainability fund that arises out of the taxation together in a proper way, I do not understand how any form of rebate system can be of specific benefit to the industry.

We are debating not a criminal activity, but an industry that is fundamental to the economy of this country. Mineral development goes back to pre-history and the Wealden area and East Anglia contain superb examples of the restoration work that can take place after the mineral workings have gone. Such areas are now popular holiday resorts.

Up until the industrial revolution and through to the present time, minerals have done much for the life of this country. I am sure that you, Sir Alan, got out of bed this morning in a house that was built of lovely sandstone or limestone, that you stepped out on to a path that was made of aggregates that had been extracted, and then on to a road that was also made up of aggregates. You may have even got on to a train that ran on metal that had been extracted from the earth and on a track that was bolstered by the aggregates that underlay the rails. Wherever we are and whatever we do, we desperately need to extract minerals from the earth.

I certainly accept that, for years, extraction took place in not too nice a fashion. For example, the china clay pits near St. Austell in Cornwall brought a great deal of wealth and industry to the area, but they are considered scars on the landscape by people who do not appreciate them properly. I come from an area in which there were 63 coal mines and where there was much exploitation and dumping of colliery spoil. Much of that land has now been landscaped and is used in a practical way.

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