European Standing Committee C
Wednesday 28 March 2001
[Mr. Amess in the Chair]
Waste Electrical and Electronic Equipment
10.30 am
The Chairman: I remind the Committee that the quorum for Standing Committee C is three.
The Minister for Small Business and E-Commerce (Ms Patricia Hewitt): I am grateful to the Scrutiny Committee for seeking this debate. We welcome the opportunity to describe our approach on the directives and to answer any questions that members of the Committee may have. We shall certainly take the Committee's views into account during future discussions and negotiations, but I hope that at the end of the debate it will feel able to agree to the motion that seeks support for the Government's approach.
We fully support the environmental objectives of the two directives, which I hope will be uncontentious. The proposal on waste from electrical and electronic equipment aims to protect the environment through the prevention of waste by increasing the recycling and recovery of WEEE and improving the environmental performance of all operators. The proposal on the restriction of the use of certain hazardous substances in electrical and electronic equipment aims to ensure the harmonisation of legislation controlling hazardous substances in such equipment. The second aim is to limit the environmental impact of electrical and electronic equipment when it reaches the end of its life, through the minimisation of the use of hazardous substances.
We recognise that a growing number of European Union member states are taking unilateral action in these areas making it increasingly important for a level playing field to be created by taking action through European legislation. It is important that the aims of the proposals are in line with the United Kingdom's own policies and goals set out in the national waste strategies.
Despite our support for the directives' objectives, we have many concerns about the texts. As the Scrutiny Committee noted, a great deal of uncertainty surrounds the proposals, which we may discuss later in the debate. Our concerns centre on what is practical for the UK and what we can do to maximise the environmental benefits without compromising our competitiveness or damaging small businesses. As the Minister with responsibility for small businesses, I stress that point.
As far as is practical, we want a WEEE directive that is clear about what it is setting out to do and how it intends to do it. Lack of clarity will make the proposals difficult to implement and enforce. We fully support the environmental goals of the proposals, but it is essential that any targets proposed are achievable within the time constraints set out and, furthermore, are easily measurable. The latest council working text is helpful in that respect. A switch to basing the recovery and recycling targets on the average weight of appliances, rather than on each appliance, would allow under-achievement on one product to be compensated for by over-achievement on different class of products.
We also seek maximum flexibility for some provisions such as the producer responsibility financing requirements in the WEEE directive, so that member states can implement them in the most suitable manner. For the restriction of the use of certain hazardous substances directive, we want to ensure that all applications in which a substitute is not available or substitution is not practical are accounted for and granted appropriate derogations. On competitiveness issues, we are particularly concerned about the potential impact of the WEEE directive on small businesses, and we have been working with the Small Business Service and in working groups to seek to minimise those effects. We have established a small business panel to help us get a better handle on the impact of the proposals on small producers and retailers.
I cannot guarantee that all our concerns will be dealt with in the final versions of the two proposals, but we are making progress in working group negotiations and have secured support for derogations that will be helpful to small retailers. The implementation timetable is approaching something that we think is achievable. If we can secure support for complete exemptions for the smallest businesses, the overall cost and regulatory burden would fall considerably without undermining the environmental advantages to be gained from the directives.
The Scrutiny Committee suggested that a proposal on hazardous waste diminished the need for the WEEE directive. I want to make it clear that that is not the case; we see the two directives as complementary, and it will take many years for the volumes of hazardous substances now entering the waste stream to be reduced. Many of the products have 15-year lifespans, and the hazardous substances directive bans will not begin until 2008. Therefore, many years—in some cases, a couple of decades—will pass before the hazardous substances directive has a real impact at the end of the life of those products. It is clear that we also need the treatment requirements of the WEEE directive. That will be the major route to reducing the environmental impact of hazardous waste in existing electrical and electronic equipment for at least the next 10 years.
I hope that my opening remarks will be helpful to the Committee. I look forward to questions and to our debate.
The Chairman: We have until 11.30 for questions to the Minister. I remind hon. Members that their questions should be brief and should be asked one at a time. There should be plenty of opportunities to put questions to the Minister.
Mr. Nick Gibb (Bognor Regis and Littlehampton): It is a pleasure to see you in the Chair, Mr. Amess. This is the first time that I have served under your chairmanship.
Given the uncertainties and the huge cost implications arising from the two directives—the costs amount to between £1 billion and £1.5 billion a year, according to some estimates—why did the Minister in her letter of 7 December seek parliamentary clearance before the Environment Council meeting of 18 and 19 December?
Ms Hewitt: My right hon. Friend the Minister for the Environment, who represents the Government at the Environment Council where the directives are negotiated, believed, on advice from our ambassador at the European Commission, that it would be helpful to the debate that was likely to occur at the Environment Council if the directives had already received parliamentary scrutiny. My right hon. Friend understood, as did I, that the Committee would be happy with that. We believed at the time that considerable pressure would be exerted by the presidency to agree a common position at the Environment Council meeting. In the event, that did not happen; the Committee felt that it would be inappropriate to give scrutiny before it had had a chance properly to go through the papers in detail and hold the debate. The issue was not of any importance, but that was the context in which we made that request.
Miss Anne McIntosh (Vale of York): I add my welcome to you in the Chair, Mr. Amess. The Minister said that in the long term, the overall cost of regulation would fall. I presume that that is what she meant. What is her Department's prediction of the initial cost of implementing the directive?
Ms Hewitt: We have prepared initial regulatory impact assessments on both proposed directives, of which the Committee has copies. We shall revise those regulatory impact assessments as we get more information from industry about the likely costs and as the directives change.
The preliminary estimate is that the total costs resulting from the WEEE directive could be as high as £560 million a year, plus £6 million to £7 million in one-off costs for information provision. We estimate that the hazardous substances directive will cost about £290 million a year before 2008, when the ban comes into effect. Obviously, however, we shall try to implement the directives in a manner that will cause as little financial burden to fall on industry as possible. As I said, we are requesting an exemption for the smallest producers and retailers, which would substantially reduce those costs.
Considerable uncertainty surrounds the existing cost estimates. A substantial part of the £560 million is an estimate provided by retailers, through the British Retail Consortium, relating to the impact on retailers of the retail take-back provisions. Some key members of the British Retail Consortium have said that they are building a cost model to allow them and their fellow members to get a much better handle on the precise costs. At the moment we have rather broad brush estimates that are based, for example, on the square footage believed to be required to store the material and how much it will cost to rent. They are trying—we support them in that effort—to get a much better fix on the costs, but we are also trying through negotiation, and especially through the small firms exemption, to reduce whatever the costs turn out to be.
Mr. Keith Darvill (Upminster): I, too, welcome you, Mr. Amess. My question relates to articles 4 and 7 and separate collection and financing. In some areas, local and waste authorities might cover some of that collection, but in the longer term article 7 places the burden on the producer. If public sector collection is to continue, that might indirectly subsidise particular manufacturers in some countries. The directive has a competitive element that does not seem to have been worked through.
Ms Hewitt: I am grateful to my hon. Friend for making that important point. The notion of producer responsibility has wide support, and it is clearly right that producers, not necessarily individually but perhaps collectively, should pay for the treatment of such waste collected from private households. We are trying to provide as much flexibility in the directive as possible, so that in considering the costs of collection, which involves the local authority point, as we approach implementation we shall be able to establish the fairest allocation and sharing of the costs involved.
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