Solutions to Regulations
January 2002

New Thermal Regulations
January 2002

Press Releases

Building, Trade & Industry - Concrete Supplement

Concrete Block Association (CBA) Chairman, Chris Hudson, explains what effect the introduction of the Aggregate Levy is having on the industry.

Background
The Government stated in the March 2000 budget that it intended to introduce a separate levy on the sale of aggregates, which came into effect during April 2002, at the flat rate of £1.60 per tonne.

The principle behind the aggregate levy (as stated in the 2000 Pre-Budget Report) is that polluters should face the true costs that their actions have upon society. Last year’s Pre-Budget Report provided further explanation of the Government's thinking:-

"The levy will be implemented in April 2002 and will ensure that the environmental impacts of quarrying aggregate, such as damage to biodiversity and visual intrusion, are more fully reflected in aggregate prices. It will encourage the use of alternative materials, such as wastes from construction, demolition and clay and coal extraction that would otherwise be disposed of to landfill. It will also promote greater development of new recycling processes, such as using waste tyres and glass.

“Revenues from the levy will be recycled to business and communities affected by the aggregate extraction……… through a new £35 million a year Sustainability Fund. This Fund will be introduced alongside the Aggregate Levy, to reduce the need for virgin materials and limit the environmental effects of extraction where this takes place.'"

Processes affected by the Aggregate Levy
The UK quarrying industry is responsible for administering the levy, taking into account that there are a large number of prescribed processes that are exempt.

In general terms, those processes using aggregate for its chemical properties are levy exempt. These include cement manufacture, paper manufacture, iron and steel manufacture and refractory processes. However, the levy will apply to processes utilising aggregates for their physical properties - building block manufacturing and other precast concrete processes are therefore subject to increased aggregate costs.

The Finance Bill states that all aggregates derived from quarrying and sea dredging activities are subject to the levy, together with imported aggregate. The levy is due at the point of sale of the aggregate. However, because the levy is chargeable to the aggregate, imported precast concrete materials are not subject to any levy charge.

So what does this mean for the customer?
“We understand that the new levy will be passed on in full to concrete block producers from aggregate suppliers,” says Concrete Block Association Chairman, Chris Hudson. “A recent straw poll of manufacturers suggests that our industry can ill afford to absorb these extra costs – it is therefore inevitable that our customers will be paying higher prices for blocks and other precast concrete materials.

“This also reflects the spirit of the Government’s thinking, which is that ‘polluters should face the true costs which their actions have upon society’. This suggests that the impact of quarrying should be felt by the ultimate end user - not passing on the levy would render it ineffective in this regard,” argues Chris.

“We are particularly concerned about the real and long-term impact of punitive taxes such as this on UK manufacturing and on the jobs and livelihood of employees,” says Chris. “Imported precast concrete materials are unaffected by the Aggregate Levy – subsequent Budgets could see severe increases in the charge being imposed, which could make imports more attractive in years to come, profoundly damaging the UK concrete industry.”

A typical price increase will be around 30 pence per square metre for solid dense concrete blocks. However, the block industry offers a number of products that will help to reduce the impact of the levy on the customer, such as cellular and lightweight blocks.

The British Aggregates Association's (BAA) legal challenge
Having recently failed in the High Court to stop the levy, the BAA is now poised to mount a new challenge with the European Court of Justice after it emerged that the European Commission had been investigating the levy, without consulting the industry or its representatives, and approved it in a decision passed privately to the UK government. If successful, the BAA may force the government to suspend the levy.

Visit www.cba-blocks.org.uk for further details or email
enquiries@cba-blocks.org.uk.
Alternatively, telephone the CBA helpline on 0116 253 6161.

Press enquiries:
Ron Willers, Concrete Block Association Press Office
Tel: 01285 862094, Fax: 01285 862094, E-mail: ron@willers1.freeserve.co.uk
Chris Hudson, Concrete Block Association Chairman, Tel: 01285 646800

Reader enquiries: David Zanker, Concrete Block Association, 60 Charles Street, Leicester LE1 1FB

Editor's note: The Concrete Block Association (CBA) is the trade body representing an industry of some 50 manufacturers producing around 60 million m2 of aggregate concrete building blocks per year from over 100 block plants nationwide. The humble aggregate block continues to dominate sales of building blocks, accounting for 7 of every 10 blocks sold.

August 2002

download PDF