Memorandum from the British Aggregates
1. The British Aggregates Association represents
small and medium-sized, independent quarry companies throughout
mainland Britain and Northern Ireland. It is entirely separate
from the Quarry Products Association (QPA) and represents a different
section of the market, often with different concerns and interests.
2. Announced in Budget 2000 for imposition
in 2002, the aggregates tax will be enormously harmful to the
quarrying industry, and especially to small quarries. My concerns
relate to three key aspects of the tax: the lack of clear environmental
objectives of the tax, the blind faith in the intrinsic good of
recycling and the economic impact.
3. The rationale for the introduction of
the aggregates tax is based upon the unscientific form of analysis
called contingent valuation. It is a method of estimating the
non-marketed benefit of reduced environmental damage based on
direct estimate of the cost to be projected from that damage.
Contingent valuation is seen as a flawed device by many. The results
of a similar contingent valuation exercise regarding the Pevensey
Levels in Sussex showed that it was doubtful whether people could
fragment their experiences in the way required or in the way that
was assumed by the response analysts. It was also questionable
whether participants felt that their responses had sufficient
validity to be used as the basis for decision-making, and whether
they all felt that they were valuing the same thing. Upon realising
the use to which their responses could be used, some participants
felt angry and wished they had not filled out their forms. Participants
found valuing nature an alien concept.
4. Secondly, this costing technique is practically
challenging. Unavailability of information, pricing and accounting
problems inherent in the analysis have discouraged researchers
from widely using this technique. The problems are even more considerable
when applying this technique to the valuation of aesthetic environmental
improvement, since the cost of aesthetic damage is not explicitly
reflected in the market.
5. Thirdly, the research is leading the
respondents to notice a quarry and then place a monetary value
on the negative aspects of quarrying, without asking them to make
any consideration of the beneficial aspects of that particular
siting of the quarry, either economically or environmentally.
A more pertinent investigation would take a more holistic approach,
looking at the numerous factors involved in the particular location
of a quarry. Even establishing the number of people who actively
indicate opposition to a quarry by complaining, and compare this
to all the other complaints about, for example, airports, power
stations, factories, and even domestic complaints (which have
consistently received three times the number of complaints as
industrial complaints in the last five years for which statistics
are available), would be a more rounded indicator than the present
6. Fourthly, the control and regulation
of the environmental aspects of the aggregates industry are adequately
covered in the Environmental Act, 1995. This provides for the
planning permissions for minerals extraction, including aggregates,
to be reviewed and updated on a regular basis by the mineral planning
authorities. The minerals planning guidance notes MPG 6 and 11
are currently being updated to ensure that all mineral operators
provide local benefits that clearly outweigh the likely impacts
of mineral extraction. The imposition of the aggregates tax as
well appears to be redundant.
7. Fifthly, the treatment of the quarrying
industry with a one-size-fits-all weight based tax makes neither
economic nor environmental sense. Our members are small, predominantly
family owned quarries, sited close to their customers. They are
not the enormous holes in the ground in the Tarmac or Hanson mould,
and the distances their lorries travel are considerably less.
Yet, while the environmental cost is much less, the overhead cost
to the small quarries is disproportionately large, due to the
costs of compliance.
8. The aim of recycling the maximum possible
amount of aggregates is not a position we oppose. However, again
the Government's plans lack, clear quantifiable environmental
objectives and proven environmental benefits of the tax to offset
the proven cost of implementing it. It appears that the Government's
justification of the tax lies in their belief in the intrinsic
good of recycling. This itself can prove to be false, as the distances
that recycled materials have to be transported are often considerably
further than quarried aggregates, with the resulting economic
and polluting effects, as well as inflicting the noise and dust
pollution more widely. Moreover, common sense informs that in
order to recycle quarry products, the lorries must make twice
the amount of journeys with their cargoto and from the
recycling plantas they do from a quarry.
9. The Government's Sustainable Development
Strategy states that: "Our economy must continue to grow.
We need increased prosperity, so that everyone can share in higher
living standards and job opportunities in a fairer society. We
must close the gap between productivity and incomes in the UK
and those in North America and much of Western Europe. Abandoning
economic growth is not a sustainable development option: to do
so would close off opportunities to improve quality of life through
better healthcare, education, and housing; to combat social exclusion;
to revitalise our cities, towns and rural areas; and to protect
and enhance our environment."
10. Employment in the quarrying industry
has fallen by 10,000 jobsa quarter of the workforcein
the last 10 years. The aggregates tax places more quarrying jobs
at risk, many of which are in areas with few other employment
opportunities. Furthermore, the closure of a small rural quarry
often heaps hardship on areas that have both been hit by the shrinkage
of the British agriculture sector and are bearing the brunt of
high fuel costs. The aggregates tax represents a further blow
to these communities, and far from enabling higher living standards
and revitalising our rural areas will augment to rural-urban divide.
11. Research prepared for the British Aggregates
Association by Wardell Armstrong, Mining, Minerals, Engineering
and Environmental Consultants, found that 2,000 direct jobs are
at risk if the Government proceeds with the tax, with many more
indirect job losses in associated industries. Smaller, independent
operators will be disproportionately affected, given compliance
costs. The tax is projected to take £550 million per year
out of the construction budget by 2004. Funds that are currently
put into environmental programmes, research and development by
the quarry operators, which have historically produced improvements
that protect the environment, will be diverted into payment of
the aggregates tax.
12. One of the industry's largest concerns
about the aggregates tax is that the costings of the potential
environmental impacts as used in the research are extremely vague.
The aim to recycle the revenues from the tax back into the industry,
and more specifically into environmental protection in and around
quarries, via cuts in the National Insurance Contributions (NICs)
of quarries, although well intentioned are both unrealistic and
mired in bureaucracy. No figures have been produced to show that
revenues from the tax will even exceed the cost of reducing NICs.
If this were to be the case, the tax would become a costly mechanism
for the Government to give with one hand only to take back with
the other with no net profit to be spent on the environment. Further
to this, as you stated in your report on the Budget 2000, it appears
that the Government have made a firm commitment to resource the
fund even if the revenues from the aggregates tax do not significantly
exceed the cost of the cut in NICson this point we urge
you to press the Government for a concrete assurance.
13. The Environmental Audit Committee has
described the aggregates tax as "a very blunt instrument"
for dealing with a "very inelastic" market sector. The
BAA believes that greater consideration must be given to the aims
and consequences of its implementation. I would be pleased to
discuss the issues raised in this letter at greater length if
that would be helpful.