What impact it estimates an aggregates tax of #2 per tonne will have in Scotland on (a) the economic viability of small and medium si'ed qu…

No decision has been taken on whether to proceed with a tax on aggregates. The effect on the competitive position of small and medium sized quarries from such a tax is likely to be limited. Although the regulatory burden on smaller and medium sized quarries could be proportionately greater, this would be offset by the higher transport costs of replacing their output from more distant larger quarries. The economic viability of small and medium sized quarries is therefore unlikely to be adversely affected by any aggregates tax in the short to medium term.As demand for aggregates is typically unresponsive to changes in price, an aggregates tax is unlikely to have short-term adverse implications for jobs, either directly in the quarrying industry or in indirect employment supported by the industry. Most of the tax can be passed on to buyers of aggregates where it will represent a small proportion of overall costs. Research by the Department of the Environment, Transport and the Regions indicates that while demand for aggregates may fall over time, leading to less employment in the industry as a whole, this will be offset by greater demand for recycled aggregates with attendant increases in employment in plant.The introduction of a possible aggregates tax would be a matter for the UK Government. Consequently the Scottish Executive has no plans to carry out any separate Environmental Impact Assessment or consultation exercise to determine the impact of such a tax. HM Customs and Excise have already consulted on draft legislation to implement the tax.The Scottish Executive is currently considering detailed proposals submitted by the Quarry Products Association. While the Executive is aware of the report prepared by the Association's Scottish Branch, the UK Government are looking to the industry to produce a package for the country as a whole to reflect the fact that any aggregates tax would apply throughout the UK.