Jobs fear over quarry tax

The levy has become something of a thorny issue

The UK Government is putting 2,500 jobs in rural Scotland under threat, according to the British Aggregates Association.

It says the introduction of a new levy on quarry products will also threaten the future of construction companies which have entered fixed price contracts.

From Monday, a levy of £1.60 a tonne will apply to all materials like crushed stone or gravel leaving British quarries.

The government says this is an environmental measure and that the money raised will be recycled to businesses and communities affected by quarrying.

Alex Salmond: Raised taxing questions

But the association says the levy will greatly increase costs, and hit rural Scotland particularly hard.

It predicts that 2,500 jobs will be lost, mainly in the Borders and west Highlands.

The association says many small and medium sized construction companies face going to the wall because they have entered fixed price contracts.

Many companies will not be able to pass the cost of the levy on to their clients, it added.

Coastal defence

Last month, the Scottish National Party said it had concerns over the tax plans.

Alex Salmond, the party's Westminster group leader, said the levy could threaten the future of a coastal defence scheme in Peterhead.

The Banff and Buchan MP warned that the Breakhead public works project hung in the balance.

At the time, he called for a delay in the introduction of the tax.

The tax would have to be fair to rural communities north of the border, Mr Salmond said.

But Treasury Financial Secretary Paul Boateng said the tax incorporated the cost of environmental damage into the price of aggregates.