 |
 |
| Press releases | ||||
| 14 November 2010 Assembly and Executive Join Support for Quarry Industry
Today the Assembly and Executive Ministers will come together in a show of support for the quarry industry and the wider construction sector in Northern Ireland. The proposed motion put forward by Patsy McGlone and Tommy Gallagher of the SDLP is “That this Assembly, while noting the Treasury's commitment to introduce a replacement for the current Aggregates Levy Credit Scheme from April 2011, expresses its concern over the decision to end Northern Ireland's 80 per cent derogation on 1 December 2010; and calls on the First Minister and deputy First Minister to take all possible steps, including working at Treasury and EU level, to protect the quarry industry, the construction industry and Northern Ireland's wider economy against the implications of this decision and the decision of the EU General Court.
Commenting on the motion QPANI Regional Director, Gordon Best, said “This show of support from the Assembly and our Executive is greatly appreciated by our members and all within the wider construction industry as it stands on the edge of a double dip recession. Since the announcement by the EU General Court on September 9th revoking state aid approval for the Northern Ireland rebate on the environmental tax on stone our MLAs, MPs and in particular our three MEPs have stood shoulder to shoulder with the industry and have opened doors to the Treasury and the European Commission. The support given by officials and the respective Ministers from the Department of Finance and Personnel and the Department of the Environment has been excellent. Make no mistake the suspension of the scheme could not have come at a worse time for the industry and the economy of Northern Ireland. The suspension will see an increase in stone of some 40%, concrete prices will rise by around 10% and road surfacing by some 15% as a result in the rise in aggregates levy from 40p to £2.00 per tonne on quarried stone. If not reinstated soon Government construction costs in Northern Ireland will rise by some £25 million annually and all of it leaving the Northern Ireland finances. It is a bitter blow for the quarrying industry here in that we entered a contract, the Aggregates Levy Credit Scheme, with Government back in 2004 and since then have invested significantly in improving the industries environmental performance to levels that now arguably show the industry here to be one of the most environmental responsible in Europe. The blame for the suspension does not lie with the Northern Ireland industry or indeed the Treasury but on those who took the legal case in the first place and have no vested interest in Northern Ireland.
Despite the gloom however Mr Best indicated there is room for optimism. “The now suspended scheme was due to come to an end on March 31st 2011. Since September 2009 we have been working with the Department of the Environment Northern Ireland and the Treasury to develop a new ALCS scheme that will operate from 2011 to 2021. Since July 2010 the EU Commission have been involved in those discussions and up until the EU General Courts decision significant progress had been made and its was widely expected that the new scheme would be introduced in April of 2011. We must now ensure that the new scheme addresses all the points that the EU General Court raised. Following recent meetings that QPANI have had with the Treasury and the European Commissioner we believe there is a real commitment on all sides to work quickly and effectively to have a new levy scheme introduced in Northern Ireland by the 1st April 2011 if not sooner”. Mr Best added, “It is important that everyone in Northern Ireland understands the importance to the local economy of all of our efforts achieving an early reintroduction of the levy scheme. If not we will see job losses, failure to achieve increased environmental enhancement and increased construction and building costs for everyone”. ENDS
Notes for editor:
Read the Protection of Quarry and Construction Industries motion supported by the Assembly here. The Quarry Products Association NI represents approximately 95% of companies involved in the supply of quarry products to the Construction Industry in Northern Ireland. Our Association draws its membership from companies engaged in providing primary aggregates, the processing of recycled and secondary materials, the production of downstream products such as asphalt, lime mortar, ready-mixed concrete, precast concrete and road surfacing contracting. The Quarry Products Sector employs over 3800 people across Northern Ireland and has a turnover of some £600 million.
When the aggregates levy was originally introduced it was soon clear to Government that the industry in N Ireland was suffering badly because of the sale of untaxed aggregates from the Republic in N Ireland. Due to the location of potential aggregates suppliers in the Republic and the ability of these suppliers to penetrate into a large geographical proportion of N Ireland given the original tax advantage of £1.60 per tonne, the N Ireland industry suffered particularly as a result of the levy introduction. In theory aggregates imports into N Ireland should be taxed but in practice it was apparent much were not. (Value added products manufactured in the Republic can of course be delivered into N Ireland without any aggregates levy liability, providing suppliers in the Republic with a significant market advantage.)
HM Revenue and Customs (HMRC) clearly cannot charge the levy at the site of origin of aggregates suppliers in the Republic, and therefore the tax point switches to the concrete/mortar/asphalt plant to which the aggregates are supplied in the North or to the construction site in the North to which the imported aggregates are delivered. Not surprisingly it has proved difficult to identify and collect levy revenues from these potential revenue points in N Ireland with the issue being compounded by the significant cross border smuggling of other higher value products into N Ireland, making the monitoring of aggregates imports very difficult for HMRC.
As a result QPANI, the Government of N Ireland and HMRC designed the relief scheme whereby aggregates businesses in N Ireland could claim an 80% levy relief if they entered into and complied with negotiated agreements with Government committing them to a programme of environmental improvements for the duration of the relief. The fact that companies in N Ireland participating in the relief scheme would incur environmental costs associated with the scheme which would not be incurred by companies in the Republic exporting into the North was a contributing factor in the original EC approval for the relief scheme. In effect the existence of unfair untaxed competition from the Republic and the environmental incentives and benefits associated with the relief scheme were regarded by the Commission as sufficient reason to allow N Ireland companies pay a lower rate of levy than the full rate which should be charged on imported aggregates.
Our three MEPs recently facilitated a meeting with the EU Commissioner in Strasbourg to highlight the need for a speedy introduction of the new Aggregates Levy Credit Scheme.
Readers can learn more about the ALCS here. |
Printable
page