Waste Electrical and Electronic Equipment

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Mr. Gibb: I was flummoxed by the Minister's response to my earlier question. Given the huge uncertainties that remain about the directives, it is astonishing that she should try to bypass parliamentary scrutiny of the directives at this stage. I hope that the civil service will not advise Ministers to do so in future. I find it extremely reprehensible. We are dealing with a significant set of directives that will add hugely to business costs, and the Committee is one of only two opportunities that the House will have to debate the issues involved in any detail.

Why is the hon. Lady appearing before the Committee today when it is the Minister for the Environment who is negotiating the directive for the Government? Parliament needs to be able to question the Minister who did the deed, not another Minister. That is important, because the suspicion is that one Minister faces Europe to negotiate the matter in Europe, and another Minister, with a friendly, pro-business face in Britain, debates the issue in Committee. Why can we not question the Minister who is involved in the negotiations?

Ms Hewitt: The answer is simple. I am the Minister, and the Department of Trade and Industry is the Department, with policy responsibility in the United Kingdom Government for such matters.

Mr. Gibb: Who says?

Ms Hewitt: That is the position in the Government. We decide for the United Kingdom who has policy responsibility on different issues, and policy responsibility for such matters lies with the Department of Trade and Industry. As I am the DTI Minister responsible for the environment, I have that responsibility. At the European level, it is for the Council to decide which Council of Ministers deals with which directive. In this case, it is the Environment Council, which my right hon. Friend the Minister for the Environment attends. The hon. Gentleman's suggestion that there is a difference of opinion between my right hon. Friend and myself, or that we say different things to different audiences, is simply rubbish. We take exactly the same view on the directives.

The Government support the goals of the directives, although we have worries about the details. My right hon. Friend the Minister for the Environment and I had a helpful discussion about the directives with the regulatory impact panel, which was chaired by my right hon. Friend the Minister for the Cabinet Office. There was no disagreement between the Minister for the Environment and me, or between the regulatory impact panel and us. We agreed the negotiating position that the UK Government should adopt and, especially, the desirability of securing an exemption for small retailers and producers, which would greatly reduce the costs to business of implementing the directives. That was supported equally by the Minister for the Environment and me.

Mr. Darvill: I agree with the concept that the producer should pay for the cost of damage, but I am concerned about the impact of historic waste. A burden could be imposed on producers and retailers that would arise from historic factors. In some cases, the historic factors could be such a burden that they could put businesses in severe difficulty. Would it be a way forward to treat historic waste differently?

Ms Hewitt: I agree that one must adopt a different approach to historic waste. We are examining the matter, which was also raised in the context of the vehicle life directive. In the context of this directive, most people will agree that historic electrical and electronic equipment waste can be sensibly covered only by a collective approach. Some companies that produced such products up to 15 years ago no longer exist. Other companies have experienced such a dramatic change in market share that basing an individual financing approach on current market share could be devastating for individual producers. In other cases, it may be the other way round—if one took the original market share and imposed it now, it would be devastating for the company. It is easier to say that there must be a collective producer responsibility for historic waste.

The matter is less clear-cut for new products. An individual producer responsibility for new products would strengthen the incentive for producers of new products to ensure that they build the reduction—and ideally elimination—of waste at the end of products' life cycle into the design and manufacturing process.

Miss McIntosh: In the light of the Minister's answer to my initial question, will she accept that the disadvantages and cost to producers and manufacturers outweigh any advantages that may flow from the directives?

Ms Hewitt: No, I do not accept that point. Following an initial assessment of the directives, it is clear to the Government that there are real gains to be made from sensibly drafted and implemented directives about such a matter. To a large extent, this is a matter of common sense. All consumers can see the extraordinary build up of electronic and electrical gadgetry in our homes and lives, particularly if we have children. We all acquire more televisions, video recorders, mobile telephones and other such items. There is a real issue in relation to personal computers, the product life cycle of which is shrinking and the replacement cycle of which is speeding up quickly.

What happens to such equipment when the consumer no longer wants it or when it no longer works? It is essential that we put in place an effective framework that will incentivise producers to design and manufacture those products in such a way that, when they stop working or are no longer wanted, most if not all of the components and material can be recycled, or the entire product can be re-used. If we do not do that, we will build up the most appalling problem for ourselves—more and more material, much of which is bulky and heavy, and some of which contains hazardous substances, will end up going to landfill. We do not want that.

The reason for putting the framework in place at a European level, not simply a national one, is that to which I referred in my opening remarks—the single market aspect. It is undesirable for different member states to impose different requirements. Producers would then have to make products to different standards for different markets. Alternatively, the country that is the most demanding would, effectively, impose its requirements on the rest of the single market. It is much better to ensure, within the framework of the single market, that there is a level playing field for the production and, ultimately, disposal of such products.

Mr. Darvill: Under paragraph 1 of article 4, member states should ensure that the provision is enforced within 18 months. Does my hon. Friend feel that that is too tight a timetable?

Ms Hewitt: Yes, I agree with my hon. Friend. We want the collection requirements to commence at the same time as producer responsibility, but we would prefer that to be 30 months, rather than 18 months, after the adoption of the directive. We are continuing to discuss that with our colleagues in Europe.

Mr. Gibb: Further to the Minister's last-but-one answer, this is only a single market issue if one goes down the absurd route of forcing companies, whether through domestic law in the Netherlands or elsewhere, to take on the responsibility, rather than finding another solution, to which I shall refer later. What is the Minister's assessment, given that she is happy for the directives to be accepted by Parliament now, of the additional cost that will be passed on to the consumer? For example, how much extra will a typical fridge cost as a result of the directives? Will she insist that the extra cost is separately itemised on the invoice?

Ms Hewitt: At this stage, I have not seen any well-founded estimates of the additional costs to consumers. There were suggestions in an article in Sunday Business last weekend of an enormous increase in costs to consumers. I do not know where those suggestions came from, but they seem to have no basis whatever in fact.

I underline the point that I was making about small retailers and producers. About 70 per cent. of the total number of firms producing electrical and electronic equipment employ fewer than 10 people. They, in turn, are responsible for only about 5 per cent. of the total turnover of the sector. Therefore, if we can obtain an exemption for manufacturers employing fewer than 10 people, we can exempt the great majority of firms from the impact of the directive without affecting the achievement of the environmental goals, because those small firms are responsible for such a small amount of the output. There is an equivalent situation in relation to retailers.

The issue is to make sure that the discipline that we have imposed on ourselves in the United Kingdom is introduced into the cost-benefit analysis of proposed regulations at European level. One can only make an effective judgment about costs versus benefits and about whether the proposals should be amended—for example, with the small firms exemption—after a rigorous and disciplined regulatory impact assessment has been undertaken. Having made a judgment about costs versus benefits, one can then consider where the costs will fall.

Mr. Darvill: The Scrutiny Committee's report refers to the Commission having addressed the relative costs of the proposals and estimates the collection costs of re-use and recycling for households at between 500 million and 900 million euro a year. Will my hon. Friend tell the Committee what will be the United Kingdom's share of those estimated costs?

Ms Hewitt: My hon. Friend may have caught me out on that. The figures that I quoted earlier are United Kingdom figures from our own regulatory impact assessment of the costs that would fall on manufacturers, collectors and others in the United Kingdom.

Miss McIntosh: The Minister will be aware that the basis for the directive lies in the fifth framework directive. I had the good fortune to visit Brussels on Monday and Tuesday of this week as part of the annual visit of the European Scrutiny Committee, following the visit last year of the Select Committee on the Environment, Transport and Regional Affairs. We followed up several items under the fifth framework programme and the emphasis that the Commission placed on that programme was deemed not to have been a success. One of the reasons for that is reflected in, for example, the European ground water directive, now coming up for review.

Does the Minister therefore not have some sympathy with the request from the European Scrutiny Committee that there is no urgency for the proposal to go ahead? Would she, or whichever Minister is to negotiate on the Government's behalf, not be minded to argue in the Council of Ministers that the proposal would be better placed within the sixth framework directive, given that the targets will be much tighter and there will be much greater scope for us to reach those targets?

 
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Prepared 28 March 2001