The Aggregate Levy due to be introduced on 1 April 2002 will have a huge impact on the construction industry and our clients.
The levy will be introduced at a flat rate of £1.60 per tonne applicable to any sands, gravels or crushed rock extracted in the UK.
When this is applied directly across the board to dry stone quarry products it could generate an increase in the ex-quarry prices of between 32% and 60%.
When this is applied to coated stone materials the increases generated are about 3.5% to 6.75%.
Every quarry has by-products which are not generally popular but still need to be sold to maintain the space required to allow quarry production. These products will now have to compete with other low value materials which will be exempt from this tax. These low value quarry products will be unable to carry the full tax value and the inevitable result will be that, for the quarry to return the £1.60 tax on all tonnage, a premium apportionment of tax will need to be applied to the popular quarry materials.
The reapportionment of taxation could therefore mean the potential application of a rate of £3.20 per tonne to the premium products.
I am further concerned that while the intent of the levy is to encourage the use of recycled materials, the market for these is very limited by the emphasis on high levels of materials specification.
J Donald McKerracher (F), 22 Colenhaugh, Stormontfield, Perth PH2 6DQ