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29 Sep 2020

Comprehensive Spending Review - MPA Calls for Focus on Delivery and Fairer Tax Treatment

The Mineral Products Association (MPA) has called on the Chancellor of the Exchequer to focus on delivery of infrastructure and fairer tax treatment of the industry in its submission to the Comprehensive Spending Review, which sets out Government’s planned expenditure for the coming years.  It also opposed the removal of the red diesel rebate, made the case for the next steps on the Aggregates Levy and set out some of the long-term decisions needed now to support the industry achieve net zero.

On infrastructure, the submission highlights the disappointing delivery of recent programmes, such as the Road Investment Strategy 1 (2015-20) in which 37 out of 112 projects were delayed or cancelled.

The Chancellor’s plan to remove the red diesel rebate in 2022 is a key issue facing the industry. MPA is calling for a delay to removing the rebate, because there is no available alternative technology and the sector will still be in post-pandemic recovery mode. MPA estimate this will cost the industry around £100 million per annum. Removing the rebate will simply raise the cost of materials for customers including housing and infrastructure projects such as HS2.

On the Aggregates Levy, MPA recommended that a small proportion of the Aggregates Levy revenue be spent on a Community Fund focused on local projects and nature conservation as well as supporting the management and operation of the mineral planning system. These relatively small spending decisions would have significant benefits and help support the long-term supply of the essential mineral products needed to deliver the Government’s housing and infrastructure ambitions.

The industry is committed to playing its part in achieving net zero but it is honest about needing Government support and a framework to encourage innovation and delivery. The submission includes a number of key policy and spending decisions that need to be taken urgently.

Nigel Jackson, Chief Executive of MPA said:

“We have always called for a laser-like focus on delivery of infrastructure projects. Increased ambition from Government is always welcome, but the important thing is to realize that ambition. Delivery must be as planned or even sooner, given the pressing need to strengthen the recovery.

“On red diesel there won’t be any environmental benefit from removing the rebate because there is no alternative kit – our members will simply face higher taxes at a challenging time. This would be a big hit to confidence, and therefore investment.
Our proposals for the aggregates levy, and the essential steps for net zero, will help our industry deliver the materials the economy needs now and in the long term.

“As a recognized essential industry upon which construction relies together with manufacturing and so many other key sectors the industry is keen to continue to play its part in the recovery and its submission is intended to help and support Government focus on the measures that will boost confidence to invest.”


Note to Editors:

Download the ‘MPA Comprehensive Spending Review Submission’ .