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Mr. Tom Harris: For real pigeons too.

Mr. Salmond: I can hear roars of assent, and am sure that Labour Members lobbied hard, as I would have done, and now approve of the exemption of clay pigeons from that iniquitous tax.

Harbour walls, defences and breakwaters are as important as the pursuit of clay pigeon shooting which, naturally, we all support. I urge the Government to see whether they can find a way of not penalising such important work. Coastal communities are experiencing a range of pressures—those of us representing constituencies with fishing interests are only too well aware of pressures on the fishing industry. Projects undertaken by relatively small organisations to deal with the ever-increasing environmental threat from rising seas are expensive, so it is unfair to impose an additional burden on them, given that their work is for the public good. I urge the Minister, whose predecessor was sympathetic to the argument, but unable to deliver a solution without damaging the integrity of the tax, to use his ingenuity and fresh approach to see whether it is possible to avoid the huge imposition on harbour and bay authorities across the county that is an unintended consequence of the levy.

Sir Robert Smith (West Aberdeenshire and Kincardine): I support the amendment and the arguments of the hon. Member for Banff and Buchan (Mr. Salmond). In particular, I support his point that there are unintended consequences from not thinking through the aggregate tax, as environmental costs will be recycled back into the community. When the environmental impact of quarrying was assessed, much was found to be local to the community in which the quarry is situated. However, the tax takes money away from that community and spends it across the whole country, well away from the quarry. In Peterhead, the fact that the aggregates will have to be transported five miles suggests that any recycling, even if up to specification, would hardly reduce journey times or environmental impact.

The Government would do well to accept amendment No. 11, which would maintain the status quo on coastal defences and allow them to find another way to close a worrying loophole, which stems from a lack of thought

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about the impact of the aggregate tax and the way in which it would work. I urge the House to support the amendment, but it would be even better if the Government came up with a constructive proposal that would render it superfluous by making it possible to get coastal defences built without an unnecessary tax burden.

Mr. Alan Reid (Argyll and Bute): I, too, support the amendment tabled by the hon. Member for Banff and Buchan (Mr. Salmond).

Climate change is leading to higher sea levels and increasingly violent storms, which means that coastal communities are under even greater pressure. Coastal communities on the Atlantic islands suffer from extremely violent storms and are under great threat from coastal erosion. The aggregates tax will simply put a greater burden on Argyll and Bute council and private individuals who want to build coastal defences to protect local villages and roads.

The tax is supposed to have an environmental purpose, but I do not envisage any environmental benefits from imposing a tax on aggregates used for coastal protection. On islands, for example, the aggregates would be quarried and moved, in some cases only a few hundred yards, for use in coastal protection. Alternatives simply do not exist. The Economic Secretary, in his letter to me of 11 June, said that "alternatives do exist." I should certainly like to hear exactly what they are. On small islands like Tiree and the slate islands of Easdale, Luing and Seil, villages are under threat, as the tax puts a greater burden on their efforts at protection.

Mr. Salmond: I agree with the hon. Gentleman. The alternative would be to bring a recycled aggregate, which would be suitable for some projects, many hundreds of miles by land and then over sea, but that would hardly meet environmental standards.

Mr. Reid: That is a valid point. An alternative may exist several hundred miles away, but in environmental and financial terms a long road and sea journey would be more expensive than paying the tax. The alternatives simply do not exist on the islands.

The purpose of the tax was supposed to be environmental, but I cannot see the environmental benefit in charging people more money to avoid having their house washed into the sea. There cannot be a much greater environmental disaster than that. I hope that the Government will listen today and accept amendment No. 11.

Mr. Flight: I, too, support amendment No. 11, which is obvious common sense. I am not at all happy with the aggregates levy. I was in Inverness last weekend and I must warn hon. Members that I shall be in Scotland again next week, so sinking England is driving us north.

Mr. Salmond: We will make appropriate sea defences for the hon. Gentleman's visit.

Mr. Flight: Yes, sea defences for the invasion.

Coastal protection work is needed elsewhere in the British Isles and I can see no logic in simply increasing the cost of that as a result of the aggregates levy. If we

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cannot stop that misguided tax altogether, let us at least have the exemption that is proposed here for something that of itself serves an environmental cause.

John Healey: I welcome this short debate and was glad to discuss the matter with the hon. Member for Banff and Buchan (Mr. Salmond) this morning.

Let me begin by being blunt. I do not accept that there is a case for exempting virgin aggregates used for harbour sea defences or coastal erosion protection projects from the aggregates levy. The levy is designed to address the significant environmental costs of extracting aggregates, including dust, noise, visual intrusion, loss of amenity and damage to biodiversity. Those environmental costs are associated with aggregates used in coastal defences, just as they are associated with aggregates used in other construction processes.

Sir Robert Smith: Was not the levy initially aimed at the crushing of aggregates to the fine aggregates, which gave rise to the estimates of the impact of dust, while this measure is aimed at large boulders and rocks, which do not produce that much dust or noise when put into the sea?

4.45 pm

John Healey: I shall come to the rationale for the clause dealing with uncrushed aggregates, and treating them in the same way as crushed aggregates, which were part of the original legislation.

Mr. Salmond: The Minister will confirm that the Government's original intention was not to include uncrushed aggregates within the levy. I understand that he says that the Government responded to consultations with the industry and so on, but if they are environmentally damaging, why were they not included in the original Government proposal?

John Healey: The nature of legislation is that it evolves. As the hon. Gentleman says, we are making this amendment as a result of points raised with us by the industry, which was concerned that not to do so would create opportunities for avoiding the tax and for unfair competition, to which I shall come in a moment.

The levy, in building in a recognition of the environmental costs of extraction, recognises those costs by making the price of aggregates better reflect their true social and environmental costs; encouraging more efficient use of aggregates; encouraging the use of alternative materials such as recycled materials and certain waste products in construction; and encouraging the development of a range of other alternatives, including the use of waste glass and tyres in aggregate mixes.

Mr. Alan Reid: Will the Minister explain where on a small island one can find those materials in sufficient quantities to substitute them for the aggregates that are being taxed?

John Healey: The hon. Gentleman will appreciate that we simply cannot devise a fiscal regime with a particular constituency in mind. This is a UK tax regime designed to apply consistently across the piece. It is not practicable

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to take into account arguments about whether a particular material is transported five miles or more in primary legislation.

Mr. Salmond: Surely special island allowances in the fiscal regime, support for lifeline services or the passenger duty, are examples of where a fiscal regime has been tapered to meet social need and common sense, so why not do the same here?

John Healey: Social need and other objectives are often built into tax and duty legislation. However, the hon. Member for Argyll and Bute (Mr. Reid) was putting the case of his own constituency, and that level of detail cannot be dealt with.

I have explained why the aggregates levy was introduced on 1 April this year and I want briefly to elaborate on why this Finance Bill brings into its scope aggregates that are extracted as uncrushed aggregates.

Rob Marris: Will my hon. Friend elucidate for hon. Members such as myself who represent constituencies in the middle of the country? Who pays for coastal erosion projects, for example, on the island of Tiree, and have special island allowances been adjusted for the increased cost that might be incurred by coastal defences as a result of the aggregates levy?

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