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Clause 23

Weight of aggregate


Question proposed, That the clause stand part of the Bill.

Mr. Letwin: Clause 23 is remarkable. Clause 23(1) states:


Forgive me for being personal, Dr. Clark, but if I were to propose to weigh you, I doubt whether it would be necessary for me to make regulations for determining the weight; I would instead employ some scales. The matter would be straightforward; the weighing would be objective, so why is it necessary for the commissioners to make such regulations?

Of course, the answer is that it is not simple and objective to weigh aggregates; it is not just a matter of finding the aggregates and popping them on to some

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scales. Those involved must work out what they are weighing and which bits they do not want to weigh. That is why clause 23(3) states:


As I said during the previous debate, we must imagine the good folk of Customs and Excise posing as geological experts and, in this case, as weighing experts, and working out how to discount constituents, such as water, and how to find the right time to weigh so as not to weigh the right thing at the wrong time--as bad as weighing the wrong thing at the right time.

All that will be determined by regulations which we have not seen, and I speculate that the Financial Secretary has not seen them either. Of course, I may be wrong, and if he would like to explain the regulations and how the Government will determine how to weigh the aggregates, I should be happy to admit at once that I am wrong to speculate that he has not the foggiest clue about the answer to that question. In the absence of such an assurance, I suggest that he imagines that someone will eventually produce some regulations for him, that the commissioners will be given those regulations and that they will send out the troops of Customs and Excise to apply them.

The general observation that I made in the debate on clause 16 applies in this case: this is not a simple matter. As we traverse the remainder of part II at unholy and unnecessary length, given the way in which the timetable motion was constructed, we shall find that there are many such instances. I hope that the Financial Secretary will be able at least to explain how he envisages the process working in practice, but I fear that it will be a long time before we see the regulations themselves. It will be even longer before someone works out in which of the many respects they are wrong and how they need to be revised ex post facto once it turns out that large parts of the industry have been driven mad by Her Majesty's Customs and Excise weighing things incorrectly. Appeals will be made, letters will be written and efforts will be made to reverse the mistakes that have been made.

7.30 pm

Mr. Edward Davey: Would the hon. Gentleman like to speculate further about the regulations that are mentioned in the clause? Does he think that there will have to be regulations for each type of mineral and each type of aggregate because of their differing relationships with water? Presumably, minerals and aggregates come in different shapes and forms and contain differing proportions of water.

Mr. Letwin: The honest answer is that I do not know how the regulations will be formulated or how specific they will be. They will obviously have to ensure that, each time something is weighed, it is a relevant substance in the normal layman's sense and that it is not a relevant substance under the terms of clause 18(3). If any of the relevant substances in that subsection have been admixed with anything that is to be weighed, the substance will not be an aggregate under the terms of the Bill and should not be subject to the levy. The weighing system will have to ensure that anhydride, ball clay, barytes, calcite, china

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clay and so on are not weighed by mistake. Some fancy footwork may therefore be required to ensure that they are not.

It will be interesting to discover whether the Financial Secretary knows the answer to these questions, but I speculate that he does not. More importantly, I speculate that, when the regulations are made, it will turn out that those who have framed them do not quite know the answers. Only later, by a process of error, will people discover what should have been in them in the first place. That illustrates the general point that this is a hugely intrusive tax.

Mr. Timms: This is a very conventional clause that does not contain any surprises. The aggregates levy is calculated by reference to weight rather than selling price, because the levy is designed to address the external environmental costs of the extraction of the aggregate and that can be done fairly only by reference to a more constant and uniform factor. Weight is such a factor.

As the hon. Member for West Dorset (Mr. Letwin) said, the clause will enable Customs to draft regulations that cover the details of how and when the aggregate is to be weighed. It is important that there be clarity on that because the levy will be £1.60 per tonne, so weighing correctly will be important. The clause will give Customs the power to make different rules to cover different circumstances; and where possible, there will be clear and widely applicable regulations for determining weight.

The practicalities of the task and the differences in methods and equipment within the industry make it unlikely, however, that a universally applicable method can be set out in the regulations. The clause therefore provides that regulations may permit agreements to be drawn up between Customs and individual businesses regarding methods of recording by weight.

The hon. Gentleman has referred to the alleged complexity of the measure, but in point after point, what is being introduced for the aggregates levy follows precisely the approach taken over the landfill tax which was introduced by the previous Government. Of course, the landfill tax is also based on weight, so regulations had to be made on how landfill material is weighed. The wording used in that instance is precisely the wording used in this clause. No doubt I shall have the opportunity to repeat that point later in the debate, because many of the clauses that the hon. Gentleman criticises for their complexity follow word for word the provisions enacted for the landfill tax, which was enacted by the previous Government whom he and his hon. Friends supported.

By attacking the character of an environmental tax measure that mirrors and is based on the principal environmental tax measure that the previous Government introduced, the hon. Gentleman raises an interesting question as to whether Conservative Members have changed their minds about whether it is right to take steps, as the previous Government did, to safeguard the environment. I shall certainly listen with interest to what he says on that point.

Mr. Letwin: I apologise to the Minister for asking him a detailed question rather than allowing him to dilate further on the general principles, but will the system for

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weighing be so designed that clause 18(1)(b) will be applied in such a way as to mean that the dust that results when aggregates have been produced as part of a process that is exempt will be weighed as part of the aggregate?

Mr. Timms: The hon. Gentleman needs to wait until the detailed regulations are consulted upon, and then he will see the answer for himself. However, I reassure him that Customs will consult widely with industry at every stage in the run-up to the introduction, and in the finalisation, of the regulations. The central point is that the clause does exactly what was done for the landfill tax. That is what needs to be done to ensure the successful introduction of the levy. I have no doubt that that will be the consequence.

Mr. Letwin: I am grateful to the Financial Secretary for giving way again with his typical courtesy, but he has restated the thesis that the levy somehow draws on the landfill tax. Where in the landfill tax legislation is there any mention of the discounting of constituent parts such as water?

Mr. Timms: The point is that there are already regulations about weighing. The form of words used to give Customs the power to issue those regulations is the form of words that has been used in this clause.

Question put and agreed to.

Clause 23 ordered to stand part of the Bill.

Clause 24

The Register


Question proposed, That the clause stand part of the Bill.

Mr. Ottaway: The clause relates to registration and is one of those clauses that appear under the heading "Administration and enforcement".

Subsection (1) will impose a duty on the commissioners of Customs and Excise


The clause then lists the people who are required to be registered and they include those who carry out "taxable activities". It would help if the Financial Secretary explained how Customs and Excise will organise itself to do that; I imagine that it will recruit people who are experts in minerals. People whom one would not normally expect to work for Customs and Excise will specialise in this subject; but will he explain how such expertise will be provided?

In particular, the clause goes on to say:


What does "commercial exploitation" mean? I am sure the Minister is aware that many people in the industry are concerned about the ability to identify and register everyone involved. Does he expect people to come forward to register for a voluntary code? What happens when someone does not expect to be in the aggregates business, but a by-product pops up which the Minister would describe as aggregate? I know that ignorance of the law is no excuse, but how would that business man know that he has to declare that he is producing aggregate?

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I hope the Minister appreciates that many people have doubts about the register. Their concern is justified. Many non-mainstream and fringe operators might evade the aggregates tax and disadvantage responsible operators. How will he police the register and ensure that it is an accurate document that reflects the activities of the entire industry?

We know that the Treasury is discussing the implementation of the register with the industry, and phrases such as commercial exploitation and construction use of aggregates have been clarified. However, is there a minimum level? I am not alluding to thresholds before the levy is imposed, which I raised when we discussed the previous amendment, but if a person produces a de minimis quantity, is he expected to register? Will the regulations--of which the Minister may or may not be aware--address that problem?

I understand that secondary legislation will be introduced later this year to make the measure workable, but perhaps the Minister can give an idea of his approach, because we need the matter clarified. Although the clause heading is simply "The register", the clause itself goes to the heart of what is workable. If there is any doubt about that, will the Minister recognise the industry's concerns and consider delaying the introduction of the levy until the serious concerns on the register are addressed?


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