The Budget: Tax on sand and gravel 'will raise cost of building projects'

Environment

The announcement of the long-awaited aggregates tax, setting a levy of £1.60 a ton on new sand, gravel and crushed rock produced by quarry operators, was the most important new green feature of a Budget in which the environment featured very little.

The announcement of the long-awaited aggregates tax, setting a levy of £1.60 a ton on new sand, gravel and crushed rock produced by quarry operators, was the most important new green feature of a Budget in which the environment featured very little.

The tax is designed to encourage quarry firms to recycle more of their material - recycled aggregates will be exempt - and so reduce the amount of countryside quarry operations take up.

Quarrying has been a source of controversy because some of the most valuable materials, such as limestone, have been extracted from protected landscapes, including National Parks. (Britain has more than 1,500 quarries). But in recent years the industry has tried to restrict damaging operations in cherished countryside and has contended strongly there is no need to bring a levy in.

Gordon Brown disagrees, and it will now be introduced in April next year. The Quarry Products Association immediately warned the tax would add an estimated £385m annually to the cost of construction projects in Britain.

"Everything from a garden patio to improvements to local schools and hospitals will cost more," said Simon van der Byl, the association's director general. "It adds up to a particularly heavy burden for projects which are paid for from the public purse and where value for money is vital."

Another trade body, the British Aggregates Association, said it was considering a court challenge to the introduction of the tax under various aspects of EU law, "including the European Convention on Human Rights".

Two other new Budget measures designed to benefit the environment were the 150 per cent tax relief for cleaning up contaminated land - which in theory would let a developer make a profit just from the clean-up - and the announcement of the Green Technology Challenge consultation, in which the Government is seeking views on which new environmental technologies could be given big capital allowances.

Mr Brown presented as green measures several of his cuts in motor vehicle and petrol tax but their true relevance was political and economic rather than environmental.