A NEW tax on quarries which was originally suggested to provide funds for local projects could instead end up in a central pot and cost jobs, West Devon and East Cornwall quarry owners fear.

Mike Aves, commercial manager for Aggregates Industries who own Meldon Quarry near Okehampton, said he did not know how customers were going to react.

'The tax is going to mean a national average increase of 20-25 per cent on aggregates, 5-6 per cent on asphalt and 7-8 per cent on ready-mix concrete products.

'It will obviously have an impact on whether customers are willing to pay more: the cost of a hospital or community centre will increase. It will depend on their budget and not our ability to supply,' he said.

Mr Aves stressed they were not seeking to make people redundant and were hoping not to, but would have to look at the position if 'demand falls through the floor'.

He also said a lot depended on whether the Government was willing to compensate local authorities for the additional cost of maintenance work.

'It's a case of wait and see,' he said.

The £1.60-per-tonne aggregates tax is due to be implemented in April, and will include provision for a £29.3 million sustainability fund 'to deliver local environmental improvements'.

The idea of a sustainability fund was a good idea, Mr Aves said, but as an industry their fears were it might get diluted if done nationally.

'The Government is currently suggesting that it is administered through existing programmes and bodies by DEFRA. Devon and Cornwall are high producers of aggregates, but if it is managed nationally the money could be spent in London — where little is produced — instead of locally.

'We need to make sure it benefits those who are environmentally penalised.'

Hingston Down Quarry near Gunnislake is owned by Hanson Aggregates — the largest quarrying company in the UK. Spokesman David Weeks said the quarry supplied a range of products and an increase in cost could result in undesirable consequences.

'Our job is to get stone out of the ground efficiently. If there is a £1.60-a-tonne aggregates tax more people will be exploiting sensitive and less environmentally-friendly sites to provide stone — such as digging up old china clay works for a lower-grade product.

'There are arguments for allowing Hingston Down to be dug up rather than allowing this to happen,' he said.

Mr Weeks said they believed that any money from a 'sustainability fund' should go back into the community within a 2-3 mile radius of a quarry — those who have to put up with the inconveniences — rather than going into a central pot.

The Quarry Products Association, whose members account for 90 per cent of the UK supply of aggregates in both private and public companies, said it supported the principle of the fund — which it had proposed several years ago.

But director general Simon van der Byl said the QPA had proposed it should be managed independently, with at least 50 per cent of the fund being allocated to local projects within a three-mile radius of aggregates operations. Local involvement should be maximised through councils and organisations.

'This could be a real triple whammy. First there is the tax itself, which will threaten jobs in Devon and Cornwall and increase the cost of local construction projects.

'Now we have the threat of funds that should be used in the counties disappearing into a central Government pot,' he said.