UK Chancellor of the Exchequer Rishi Sunak's decision to continue the freeze in the Aggregates Levy for 2021/22 has been welcomed by the Mineral Products Association (MPA). But the association says future indexation will increase costs for the sector.
The confirmation of the extraction of red diesel from the mineral products industry, and almost all other industrial sectors, from 2022 is said by the MPA to be “disappointing”, will raise the cost of mineral products and the homes and infrastructure they go into, and equates to a “£100 million tax raid” on an industry that is still recovering from the economic impact of the coronavirus pandemic.
The MPA states that the Review of the Aggregates Levy in 2019 clearly showed the industry’s positive environmental credentials, which have been acknowledged by Government.
Nigel Jackson, MPA chief executive, said: “The announcement on the Levy is good news in the short term, but the intention to return to annual indexation from next year is not. There is still unfinished business on the review, such as the Community Fund that we proposed, and several further consultations are expected.
“On red diesel, it is a disappointing decision that is really just a soft target tax raid. Our sector pays its fair share of environmental taxes already and has a great track record on reducing carbon and contributing to biodiversity net gain. We will shift away from diesel when the suppliers bring their alternatives to the market, but that’s not going to happen for some years.
“It is very disappointing that the Chancellor has decided to press ahead with these tax increases from next year. There are other sectors whose environmental footprints are far greater than ours who consistently escape environmental taxation, and some who even receive subsidies. Government needs to create greater parity across all business to ensure there is a logical basis for the imposition of green taxes.”
