Clause 18
Finance Bill
2:15 pm
Kitty Ussher (Economic Secretary, HM Treasury; Burnley, Labour)
The clause increases the rate of aggregates levy from £1.95 per tonne to £2 per tonne. The new rate will apply to any aggregate commercially exploited on or after 1 April 2009. We have always said that we would make sure that the levy kept pace with inflation over time. That is broadly what we are doing today. There is strong evidence that the levy is achieving its environmental objectives. Between 2001 and 2005 sales of virgin aggregate in the UK fell by 8 per cent., while there was an increase of nearly 6 million tonnes of recycled aggregate.
I shall now deal with the types of material as it follows on from that point. Exemptions are granted to certain materials such as slate waste and china clay waste to promote their use as alternatives to so-called virgin aggregate. That policy stems from our broad minerals planning policy, which seeks to encourage the use of these materials as alternatives to virgin aggregate. I do not know whether either are available from John Lewis, and whether that will help the hon. Member for Taunton to decide how to redo his house. In terms of the fund, he is entirely right. The levy raises around £300 million a year. The budget for the sustainability fund is £35 million a year. The difference is used to fund roughly a 0.1 per cent. employers national insurance contributions cut, which was made when the levy was introduced. Even if one includes what we discussed on the previous clause, it still does not fund all the mixed concessions. Therefore, there were no stealth taxes involved in this.
The hon. Member for South-West Hertfordshire wanted to know a bit more about the sustainability fund. It is administered by the Department for Environment, Food and Rural Affairs and it aims to minimise demand for primary aggregates, to promote environmentally friendly extraction and to reduce the effect of local aggregate extraction. Outside England it is up to the devolved Administrations to decide how to spend their allocation. However, in the spirit of co-operation, the Government have helpfully suggested that it should be used in six areas: overcoming market barriers; promoting increased use of alternative materials as aggregates; funding and research into more sustainable construction and demolition; promoting conservation and increased biodiversity; restoring the natural landscape and promoting environmentally friendly quarrying practices; and supporting local community projects.
The value of the sustainability fund was set at its introduction and continues to offer value for money. Our internal estimates suggest that 10 per cent. of the total amount raised is the maximum scope for such spending. I hope that that is sufficient to encourage the Committee to agree to the clause.