The Treasury has published the framework for its review of the Aggregates Levy.
The levy is an ‘environmental tax’ that aims to reduce the extraction of fresh aggregate (rock, sand and gravel used as bulk fill in construction) and encourage recycling and use of by-products from other industrial processes.
The Highland Council's Sconser Quarry on the Isle of Skye
It was introduced in 2002, and the current rate of £2 per tonne has been charged since 2009. It has historically brought in between £240m and £410m of annual revenue, officials said.
A discussion paper sets out the review’s rationale, terms of reference and scope, and how stakeholders can engage. The review will be led by the Treasury and report to the chancellor and could lead to reforms.
The Government will consider all aspects of the levy, considering new and existing evidence on the impact of the levy (including its environmental impact) and the nature of the wider industry.
Treasury officials added that the review will look at ‘the objectives and the impact of the levy, how effective the current design of the levy is, and the environmental and business context of the production and supply of all kinds of aggregate and the extraction of other construction materials’.
There will be an expert working group made up of representatives of industry and other organisations but its findings will not be binding.
‘All executive decisions concerning the review will be the responsibility of HM Treasury,’ officials said.
