Select Committee on Trade and Industry Minutes of Evidence


Examination of Witnesses (Questions 40 - 56)

TUESDAY 23 OCTOBER 2001

MR DAVID EVANS, MR JOHN BOND-SMITH AND MR BOB HOOD

  40. Do you see this speeding up the process?
  (Mr Evans) Yes. It would if the local authorities had the ability to deal with abandoned vehicles which may fall into the category of ELV promptly and in a systematic way. Apparently, they are unable to do it now.

  Chairman: Maybe you should encourage people to abandon vehicles on double yellow lines.

Richard Burden

  41. Could I ask what your definition is of when free take-back starts? Does free take-back start at the point at which the end user of the vehicle gets rid of it or does it start at the point at which the dismantler or the dealer or the shredder takes it? In other words, who would be responsible for getting that old car from the front lawn of the person who has it to the dealer, the dismantler or the shredder?
  (Mr Evans) It is a very interesting question and I imagine the answer to it would depend on where you are coming from, which sector of this you belong to. If the idea behind it all is that the consumer should be saved from harm and should not have to contribute to it, presumably it means that, at the moment someone declares that a vehicle is an ELV, the cost of it has to be borne by a responsible person—i.e., the manufacturer. That is as I understand what is being proposed. I am not suggesting that the manufacturers are comfortable with that.

Linda Perham

  42. I think at the beginning of your evidence you touched on recovery operators' costs such as storage, depollution and transportation of the vehicle. Do you know if there are any other adverse consequences in the Directive that could fall on recovery operators and what might be done about them?
  (Mr Evans) Bearing in mind that they carry out functions on behalf of a variety of people—police, local authorities, individual owners or whatever—often, if it is a police matter where there is an accident, the responsibility of the police to clear the road is the imperative put on the recovery operator: get this thing out of the way. Normally, they cannot just tow it to a layby and leave it there. They normally take it to their premises pending instructions as to disposal. There are road safety hazards attached to this. It is not unknown for people to be killed whilst carrying out recovery operations. It is a skilled affair. There is a statistic here that says it is at least seven a year who are killed in recovery vehicles. They have to clear the road, to take the vehicle to premises. They then have to wait for instructions as to disposal. They have to store whatever it is they have taken back until somebody—it may be an insurance company; it may unfortunately be an executor of somebody's estate who is dealing with the matter now that the accident has taken away someone who was driving—gives instructions and problems of that sort. The recovery operator will have to depollute the vehicle whilst storing it, so that is a cost, and have skilled people. Then somebody or other is going to decide what is to happen to it. Is it going to be transported somewhere? If so, that has to be properly regulated. The recovery operator may have no more to do with it or the recovery operator may be part of a business which is a repairer, in which case maybe they carry out a repair; or, no, this is now an ELV that has to be disposed of. It is of no value, negative value or positive value. What is to happen?

  43. What about the certificates of destruction? Would you see the directive putting the onus on recovery operators to have to deal with certificates of destruction? Would they want to issue them?
  (Mr Evans) For the same reasons mentioned before, it is probably unlikely that a recovery operator would want to enter into that by becoming an authorised facility. Maybe they would. Maybe it depends on what their commercial view of it is, but I think they would have to think very hard about it because it is quite expensive. All the audit arrangements and reporting are quite onerous.

  44. In short, you are saying that there will be more problems for people undertaking recovery operations under the directive than there are now?
  (Mr Evans) Yes.

  45. You have talked about the hazards they face now but it would make life more complicated for recovery operators?
  (Mr Evans) Yes.

Mr Berry

  46. Could we turn to the options outlined in the detailed consultation paper? In your written submission you say that you have not yet been able to formulate your response to that consultation paper. I wonder if now you are in a position to tell us which of the options, if any, in the consultation paper you prefer?
  (Mr Evans) I do not think we have an option not to decide on an option, do we? There are three options. It seems to me that the membership is tending towards option three but I am not in a position to give you a final answer on that because the membership has not yet and I know time is running on.

  47. Are you able to tell us why the membership is coalescing around option three?
  (Mr Evans) It seems to represent a more balanced view than the other two but that is only an interim comment.

  48. Because it is a bit of one and it is a bit of two?
  (Mr Evans) Yes.

  49. What about option four?
  (Mr Evans) What is that? Not to do it?

  50. That is certainly not an option; nor should it be. Are you aware that a fourth option has been put forward by the SMMT?
  (Mr Evans) No.

  51. Really?
  (Mr Evans) You asked me; I told you.

  Mr Berry: The debate about this Directive has been knocking around for quite some time and I am surprised, given that a group of manufacturers is backing a fourth option, that they have not made others in the industry aware of it but thank you. I note that.

Mr Djanogly

  52. Could I ask for your views on the manufacturers' position? In particular, how do you think the manufacturers are likely to want to pass on costs? Do you think that this could be used to entrench the market position of the larger manufacturers and act as a barrier to entry?
  (Mr Evans) Frankly, I do not know what the manufacturers would have in mind. I suppose, since it is going to be a complex and costly exercise, they would want to pass on as much of the cost as they could possibly and reasonably do, so the dealers may have to discuss with their individual manufacturers what part they could play and who would accept responsibility for the payment. I think it is fair to say that the dealers would be reluctant to have to accept any cost over and above what they may already be involved in.

  53. The conversations are not yet happening?
  (Mr Evans) I am not aware of them.

Sir Robert Smith

  54. Do you think, if the manufacturers have to pick up all the costs, there would be an incentive on them to design the cars with an eye to reducing those costs?
  (Mr Evans) It will be for the manufacturers to explain it in greater detail than I can but I believe that they have taken enormous steps to improve the construction and building of vehicles, not least from the point of view of ultimate recycling.

Chairman

  55. You mentioned earlier on the block exemption which is up for reconsideration and which affects at least some of your members but not all of them, as I understand it. Would you think that it would be reasonable for any amended block exemption arrangement to accommodate the end of life provision? Do you think that there would need to be changes, even if we were to carry on, God forbid, with the existing block exemption, to accommodate the End of Life Directive?
  (Mr Evans) It is a very astute question. The purpose of the block exemption regulation is to govern the relationship between manufacturers and dealers with proper provision for technical information for independent repairers and to see to it that the consumer has a fair share of the resultant benefit. Since the block exemption regulation has not hitherto had anything to say about end of life vehicles, I would think it would probably delay its implementation—that is the renewal—from the end of September 2002 if end of life vehicles were to be incorporated in it. There may be some reference to it and I can see that it could very well be something that would say that, in relation to the consumer's vehicle, there has to be some provision if directive so and so end of life vehicles comes into operation. I do not know of anybody who has proposed this so far. It is a new line of thought.

Mr Berry

  56. If under the block exemption dealers are uniquely qualified to provide the after sales service and so on, surely the ultimate after sales service which the Chairman is referring to is that you then deal with the bit at the end as well? It seems to me that, for those who remain convinced that block exemption is a thoroughly good thing, they must presumably be arguing that the dealer should pick up the end of life vehicles as well because of the unique expertise that is there.
  (Mr Evans) I understand but not all vehicles are repaired or serviced by franchised dealers. Not all those who deal in vehicles are embraced by the block exemption regulation. There are a number of entrepreneurs who quite fancy dealing in vehicles but not providing service and repair so you would have a distinction between those who are committed to standards and all sorts of other things including repairs and maybe taking back vehicles and those who would not be. I do not know how that would work out but it would be disadvantageous to those who set out their stalls to provide an all-in service.

  Chairman: This may well be something that we will return to when the End of Life Vehicle Directive is incorporated or up and running and we are still looking at the exemptions. Gentlemen, thank you very much for your time this morning. If we have any other points we would like to get back to you on, perhaps of a statistical nature, we will be in touch.





 
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