Select Committee on Northern Ireland Affairs First Report


Our recommendations are:

1. We believe that the Government cannot justify introducing the aggregates levy in Northern Ireland as an environmental tax, when it will not reliably "deliver a more dynamic economy and a cleaner environment",[2] but may well have entirely the opposite effect there. The theory may be right, but the development and the implementation are wrong.

2. The Government's rationale in introducing this tax into Northern Ireland is compromised: its research does not withstand scrutiny either as a rationale for discouraging aggregates extraction and encouraging recycling or within the wider Northern Ireland context, which was somehow totally overlooked.

3. We continue to maintain open minds as to whether the aggregates industry will prove environmentally sustainable in the long term. In Northern Ireland today, however, it provides essential support to communities and to the wider project of regeneration which is so important to the success of the peace process. The arguments offered to us about the likely migration of the industry and the consequent loss to communities close to the border are compelling: this cannot be the end which the Government set out to achieve.

4. We therefore recommend that the Government postpone any introduction of the levy into Northern Ireland, until a fully-informed decision has been reached as to its effects.

5. We further recommend that the formula for allocating the Sustainability Fund be re-examined and the case for regional fiscal neutrality be considered.

6. It would be wrong to introduce the levy into Northern Ireland until these steps have been taken: if this means deferral beyond 1 April 2002 — and we believe a proper process of consultation and research requires that it must — then so be it.

7. Given the clear failure by those developing the tax to tackle the consequences for Northern Ireland at the appropriate time we do not believe such special treatment to be unreasonable. The development of a new, credible, package must be better than implementation of a policy flawed with regard to Northern Ireland and with the potential to undermine the Government's environmental credentials and the current and future economy there.

8. The threat of implementation is already having an impact upon, Northern Ireland as contracts for work after April 2002 are already being negotiated; we urge the Government to give serious consideration to these arguments, and to make a full statement of its plans at the earliest opportunity to end the current uncertainty.

2  Environmental taxation - statement of intent, H M Treasury press release 2 July 1997 Back

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Prepared 11 December 2001