Clause 127 - Aggregates levy: amendments to provisions exempting spoil etc

Part of Finance Bill – in a Public Bill Committee at 11:00 am on 25th June 2002.

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Photo of Christopher Chope Christopher Chope Shadow Spokesperson (Transport) 11:00 am, 25th June 2002

Dealing with amendment No. 255 first, the Economic Secretary explained how naturally occurring water in aggregate is part of the system, and how aggregate is weighed and sold by the tonne with as much water as there happens to be in it. He went on to explain the fiendishly complicated calculation that Customs and Excise had brought in to work out how much water has been put into aggregate in order to reduce the incidence of dust. He said that there was an environmental benefit in the reduction of dust, which we would endorse absolutely. What he did not address were cases when aggregate is washed and sold wet, having been washed to make it more saleable. It may be sea-dredged aggregate that has been washed. Why should there be a special allowance for aggregate in that washed state when there is no allowance for aggregate from beneath the water table? I am not convinced by the Economic Secretary's explanation on that.

On amendment No. 256, the hon. Gentleman says that the aggregates industry has been consulted. Perhaps I could tell the Committee of something that I was informed about this morning by the British Aggregates Association. It says that there was a court case in front of the European Commission when the application for state aid approval in relation to Northern Ireland was considered by the Commission. The Commission's judgment reached the conclusion that it would be reasonable to allow state aid approval for Northern Ireland, but it also—more interestingly—reached the conclusion that the whole United Kingdom regime was state aid because of the differential impact that it has on different parts of the industry. As one can see from the examples that we have talked about, that is particularly true of the slate industry.

The Government have introduced a fiscal regime that will give an incentive for virgin slate to be quarried and to be used in place of aggregate waste. It will be transported hundreds of miles across the country to enable that to happen. How can that be sensible? It is surely a distortion of the market. How can the Government assert that it is a good thing to have a slate quarry operating, but not a limestone quarry, or that it is a bad thing to quarry virgin limestone but acceptable to quarry virgin slate? That does not make sense.

The European Commission produced its findings on the matter in April. The Government were given 14 days in which they were allowed to indicate whether they felt that the draft judgment should be made publicly available. They did not say anything, and it is only in the previous 48 hours or so that Customs and Excise has agreed with the British Aggregates Association that the draft judgment should be published. The draft judgment shows that the European Commission's view is that the whole regime and structure involves state aid. It has given approval to that, but the Government have hitherto argued that the only element of state aid was in so far as it affected Northern Ireland. Needless to say, that will be the subject of further litigation in the courts, but I think that it drives a coach and horses through the Economic Secretary's suggestion that he is actively consulting the aggregates industry. The industry urged Customs and Excise to give permission to publish the judgment at the end of April but it is only now, towards the end of this Committee, that that permission has been granted. It is significant and exemplifies the responsibility of the British Aggregates Association that it did nothing that it was not authorised to do and sought approval from Customs and Excise first.

Opposition Members feel that we should not countenance legislation that will encourage the mining and crushing of virgin slate while at the same time encouraging the dumping and accumulation of waste aggregate. That encapsulates our arguments in support of amendment No. 256.