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'(4A) The first 250,000 tonnes of taxable output per taxable person in each accounting period shall be exempt from the levy; and for the purposes of this subsection, where a taxable person carries on business in partnership, that partnership shall be the taxable person for the purposes of the exemption.'.
The purpose of the amendment is to help the small quarry operator--the type of operator described by the hon. Member for High Peak (Mr. Levitt) as a "cowboy". I do not accept that description, because there are many good small operators and that was an unwarranted slur on them.
The aggregates levy will make it harder for the smaller operators to compete. They tend to be located in the remoter rural areas, and the major operators are mainly in the south of England, where aggregates earn £12.50 a tonne. In remote areas, such as Scotland, the value of aggregates is £2.50 a tonne. The flat rate levy will therefore be 12 per cent. in the south-east but more than 50 per cent. in remote rural areas. The hon. Member for Somerton and Frome (Mr. Heath) mentioned secondary aggregates; they can be worth as little as £1 a tonne, which would make the aggregates levy a huge 160 per cent.
The second factor that will make life more difficult for the small operators is that the majors also tend to control the downstream operations in ready-mix and in asphalt. The majors will load the levy on to those products, but that option will not be available to the smaller operators. The third factor is the bureaucracy that the levy will involve. Some of the product mined will be used as aggregate for construction, but some will be used as an industrial mineral and will not attract the levy. That will lead to complex bookkeeping arrangements. In-house products, such as recycled or reclaimed products, can be blended with mined product, which will also lead to complications in bookkeeping. Complex computer systems will be needed, and the small operators doubt whether they can afford the additional cost of the software.
The result will be that the small operators will go out of business. Jobs will be lost in rural areas and the big companies will move in and finish off the smaller guys, as they have been trying to do for some time. The environmental consequences will be serious, because customers will have to travel further to get their aggregate and it will have to be delivered further afield, with consequences for transport systems. Fewer, larger quarries will result, which will be both environmentally and commercially detrimental.
Most small operators tend to be family-run organisations with limited staff and resources. The burden of regulation is tough enough for them, and the levy will be the last straw. The consequence will be job losses and environmental damage.
Mr. Levitt: I wish to put it on record that I did not say that all small quarry operators were bad. However, bigger operators, which can invest in environmental measures, tend--in my experience of the quarries in my constituency--to have a better record. Some of the smaller operators are more likely to flout planning regulations and to take the least care of the environment. They also put health and safety regulations to one side and refuse trade union recognition. Therefore, the special pleading on behalf of smaller operators is not justified. I would be happy to be proved wrong, and I will happily visit all the quarries in the constituency of the hon.
Mr. Christopher Gill (Ludlow): I wish to put on record my opposition to the tax, and to express my great disappointment that the voluntary scheme proposed by the Quarry Products Association has been ignored in favour of this huge cost imposition. It will be a tax on jobs, which are very valuable in rural areas. Of course, the economy in those areas is already suffering badly as a result of the Government's mishandling of the problems caused by foot and mouth and the downturn in the agriculture sector.
The tax will impose an additional cost burden on every construction project, from roads, railways and port facilities to housing developments, property repairs and home extensions. There are several quarries in Ludlow, some run by small private companies and some by large plcs. They quarry sand, gravel, limestone and granite. In particular, stone from Clee hill is sent to south Wales, where it is converted into rockwool, an insulating material. I hope that the Government will take some notice of my concerns about the effect on the valuable and irreplaceable jobs in my constituency, which will be prejudiced by this unnecessary and unjustifiable tax.
Mr. Timms: I hope that the House will not accept the amendment. The package is not a tax on jobs. Indeed, I made the point earlier that it is the opposite, because the bulk of the proceeds from the levy will go on a reduction in employer national insurance contributions. The hon. Member for Ludlow (Mr. Gill) mentioned the new deal proposal by the Quarry Products Association, but one of the reasons why that was not a viable package in the end was the opposition to it from the smaller quarries, which argued that
As my hon. Friend the Member for High Peak (Mr. Levitt) rightly said, the levy is being introduced to deal with the significant environmental costs associated with quarries, and applies to all aggregates extracted from any quarry, including the first 250,000 tonnes in an accounting period to which the amendment refers. Typically, there will be four accounting periods in a year, so we are talking about quarries producing up to 1 million tonnes a year. Not only small quarries but some of significant size would benefit, so the amendment is not targeted quite as the hon. Member for Croydon, South (Mr. Ottaway) intended.
A de minimis limit is in any case not usual with a specific, one-stage, non-deductible tax. Another serious difficulty about the amendment is that such an exemption would be seriously anti-competitive for the UK as a whole, because under EU law all imports would have to be treated as below the de minimis level and therefore exempt from the levy, which would obviously have a very detrimental impact on UK quarries that paid the levy.
Mr. Letwin: In a rational world, we would now be beginning a significant debate on the clause, which is the single most important clause in the Bill--not a great dignity in this case, but true. However, because of the way in which the Government have timetabled the proceedings, that option is no longer available. Moreover, we will never get to debate the serious amendments tabled to clauses 17 and 18, which are the second and third most important clauses in the Bill. I do not think that there is any previous example of a Government so determined to ram through a half-baked Bill that they fail to allow any time whatever to debate its most important parts.
To do Ministers justice, I suspect that this is a comedy of errors rather than an attempt to undermine parliamentary sovereignty. I fear that that is also true of the whole of the clause and the tax that it introduces. There are some half-good ideas sitting at the back of somebody's mind, but they have not been brought to the forefront of the lobes of the Ministers and officials involved. Still less have they been translated into a coherent regime. That is because, although it has taken three years in the gestation, the whole scheme bears all the appearance of having been concocted at the last moment without the necessary consultation.
This is above all a tax that demanded a Special Standing Committee procedure, which would have enabled the Financial Secretary to discuss properly with the industry how it could be implemented so as to achieve the Government's aims for it. Nothing of that kind has been done, as became very clear in the response to the debate on amendment No. 4. The tax was produced by the wrong procedure, and is therefore the wrong tax.
Mr. Edward Davey: The hon. Gentleman is making an important point. Does he agree that it would have been possible for the Government to introduce an aggregates tax with a better rebate scheme, and that it would still be possible for them, having heard the debate, to design a tax that might gain wider support?