asked Her Majesty’s Government:

Why the Aggregates Levy Sustainability Fund has been reduced while the aggregates levy has been increased.

My Lords, Defra plans to spend £24 million on the Aggregates Levy Sustainability Fund in 2008-09. That is more than we spent in 2007-08.

My Lords, does the Minister agree that proposals were put forward to reduce the Aggregates Levy Sustainability Fund and that that would have a massive impact in local communities? Will he assure the House that the Aggregates Levy Sustainability Fund will be increased in line with the fact that the aggregates levy has increased quite dramatically? This is a tax on the extraction of aggregates, but the Aggregates Levy Sustainability Fund has been set up to help local communities deal with the environmental impact of such extraction.

My Lords, we will certainly sustain the Aggregates Levy Sustainability Fund. As I indicated, we are spending more in this coming year than we did last year. However, there is no direct correlation between the levy and the sustainability fund. The levy is not a hypothecated tax, and it goes to many other purposes beyond the sustainability fund. The sustainability fund has a significant role to play and we are increasing expenditure accordingly.

My Lords, where a former gravel pit has been converted into an attractive water feature or amenity for local people, has that been funded by the sustainability levy or by the industry itself?

My Lords, the industry would be quick to point out that it contributes more than the allocation to the sustainability fund, but the sustainability fund is the instrument whereby targets are identified for support. It would be rash of me to say that in every case the sustainability fund has been the decision-taker, but of course the fund produces those benefits in crucial respects, and it is important to the environment. There is a broader issue. We need price signals to be sent out to the industry in order that it goes for the recycling of materials rather than the constant exploitation of natural aggregates.

My Lords, in the parish of Gresford in the 1930s a castle disappeared, together with the hill on which it stood, in order to provide aggregate for the Mersey tunnel. What proportion of the £24 million to which the noble Lord referred goes to archaeological sites for the preservation of our history in a way that did not happen in the past?

My Lords, that is part of the remit of the Aggregates Levy Sustainability Fund, but National Heritage also has a role to play in exactly the area the noble Lord has identified. The question of aggregates covers so many issues with regard to the land and, I might say, with regard to marine resources. One of our major projects is to look at the impact on the seabed and marine life of the withdrawal of aggregates from the sea. All these issues have to be taken into account, which is why there has to be a relationship between National Heritage and the sustainability fund. A great deal of research has been carried out in recent years to enable the fund to target successfully.

My Lords, according to Defra, the aggregates levy raises more than £300 million a year. I am sure the noble Lord would not wish it to be seen as a stealth tax, but £24 million into the sustainability fund does not sound like a particularly robust use of that money in environmentally sensitive ways. To what extent has the pattern of spending changed over the years? The noble Lord told us that the planned spend this year was an increase. Could he give us figures for the previous three or four years, just to give us the pattern of spending?

My Lords, I would not want to exaggerate the issue of spending in percentage terms, but we spent about £19 million the year before last and we have budgeted for £24 million this year. The House will recognise that the levy is not a hypothecated tax. It is there to sustain aspects of the industry as well and to send out a price signal, for which the noble Lord is likely to offer his support, that the aggregates industry has a particular responsibility regarding the environment. That is why the levy is in place to the level it is, although it has been increased this year only as an inflation index.

My Lords, I think that the noble Lord misheard my noble friend’s question. My noble friend asked whether he would give the figures for the past three or four years. Does the noble Lord not have them, or does he not want to give them?

My Lords, I would certainly give as much information as I have to hand. The noble Lord is indicating the Box, which has limited uses on occasions such as this. We have not spent as much as £24 million in the past two years and we are therefore making provision for additional spending. In the year before last, the figure was £17 million; and last year, it was £19 million. Those figures may not be precise. I was not being evasive; but merely indicating that there should be no suspicion that the Government are about cutting expenditure: we are not.