MPA Scotland, which represents the majority of Scotland’s aggregates producers, has kicked off research into the economic contribution of the industry to the Scottish economy, ahead of the introduction of the Scottish Aggregates Tax.
Working with Biggar Economics, the study will set out the contribution made by the industry, including the jobs it supports, its contribution to GDP and public finances. The study will also consider the future potential of the industry to support key growth areas of the Scottish economy in the future.
This comes ahead of the introduction next year of the Scottish Aggregates Tax, a new tax devolved from the UK Aggregates Levy. MPA Scotland has been engaged with the Scottish Government, but some issues are not yet settled, most notably the rate of the tax. The research will help benchmark the impact of the tax.
It will also complement research commissioned by the Scottish Government into the availability and suitability of secondary and recycled aggregates, which was a feature of debates around implementing the tax, and on which there is little quality data.
All of these issues can be considered at a Scottish Minerals Forum, which MPA Scotland have been advocating for. Indeed, the Minister for Public Finance has kindly agreed to establish a forum that allows us to consider the direction of travel on taxation, innovation, skills and wider issues that impact this important sector.
Alan Doak, Director of MPA Scotland, said:
“Regardless of the level of tax imposed on primary aggregates, recycled aggregates will only be a cost-effective option on sites within a reasonable distance of the recycling facility, with haulage costs quickly outweighing any tax savings the further delivery vehicles have to travel.
“There was lots of discussion during the debates on the Bill on the roles played in the Scottish economy by recycled and virgin aggregates. There is a suggestion from some involved in the recycling sector that the best way to encourage the increased use of recycled aggregates is to increase the rate of aggregates tax levied on primary aggregates. But the main issue limiting the current use of recycled aggregates is the reluctance of clients and engineers to specify recycled aggregates for use on construction projects, as well as other factors relating to availability of material and location. Our members, who are involved in recycled and virgin aggregates, are understandably concerned regarding the impact on the construction sector a tax increase in Scotland could have.
“Scottish Government’s own figures suggest the recycling rate of relevant construction and demolition waste is around 87%”
“The research we have commissioned will help everyone approach these issues on the basis of fact rather than emotion. We also look forward to establishing the Scottish Minerals Forum, to monitor the implementation of the Tax, consider this research programme and ensure that our industry, which is a hugely important part of the Scottish economy that underpins many critical areas including infrastructure, housing, transport, energy and other sectors, is delivering for Scotland.”
ENDS
About the Mineral Products Association:
The Mineral Products Association (MPA) is the trade association for the aggregates, asphalt, cement, concrete, dimension stone, lime, mortar and industrial sand industries. MPA is the sectoral voice for mineral products, covering 100% of UK cement and lime production, 90% of GB aggregates production, 95% of asphalt and over 60% of ready-mixed concrete and precast concrete production. In 2021, the industry supplied £22 billion worth of materials and services to the Economy. It is also the largest supplier to the construction industry, which had annual output valued at £178 billion. Industry production represents the largest flow of materials in the UK economy and is also one of the largest manufacturing sectors.
For further information:
Contact Robert McIlveen: [email protected]