GOVERNMENT PLANS for an aggregate tax on quarry products and building materials must be abandoned in Northern Ireland, a cross-party committee of MPs has recommended.
The conclusion follows bitter opposition to the tax, due to be introduced in April, by Northern Ireland's building materials industry. It fears that cheaper tax-free products and materials imported from the Republic of Ireland would decimate the market.
'What does the government expect to happen to an industry which is taxed in the presence of one which is not?' asked quarry owner Matthew Murphy who gave evidence to the committee hearings on behalf of the NI Quarry Products Association (NIQPA).
In a scathing report, part of which is entitled The border the government forgot, the NI Affairs Committee says the tax, 'will fail on almost every count'.
It also discovered that the government's consultant advisers failed to 'look specifically at the situation in Northern Ireland'.
The stance of the committee - which has a majority of English MPs - goes much further than the compromise announced in November. This suggested a 20% a year incremental introduction of the tax over five years in Northern Ireland.
'This is death by a thousand cuts rather than one single blow, ' said Murphy.
The tax - which aims to encourage the use of recycled rather that new materials - puts £1.60/t on rock, crushed stone and sand quarried or imported into the UK, along with aggregate products like tarmac made in the UK But imported aggregate products are exempt because the Treasury says it could not enforce a tax on non-UK firms.
NIQPA studies show this will make imported products from the Republic cheaper across most of NI, even after taking account of transport costs.
'The Government's rationale in introducing this tax into Northern Ireland is compromised, ' the report says. 'Its research does not stand scrutiny either as discouraging aggregates extraction and encouraging recycling or within the wider Northern Ireland context which was somehow totally overlooked It recommends the government 'postpone any introduction of the levy into Northern Ireland, until a fully-informed decision has been reached as to its effects'.
Treasury secretary Paul Boateng is expected to reply to the report within the next few weeks. New legislation or special measures would be required to repeal the tax in Northern Ireland.