Examination of Witnesses (Questions 180
TUESDAY 23 OCTOBER 2001
180. Can I take you back to your concrete, you
mentioned concrete; presumably, that means where the operation
goes. Surely, that ought to have been done under local planning
regulations in the establishment of dismantling yards anyhow;
I thought that would have just been good practice?
(Mr Wemyss) It may be good practice. I would just
refer you to many car parks, where you may park your car, that
have not yet the benefit of concrete.
181. Of course, the danger is that you will
have contamination costs if you have not got concrete down; so,
in effect, you could be saving the industry money?
(Mr Wemyss) If you have priced concrete lately, I
do not think you would come to that view.
182. You only put it down once, not every week,
(Mr Wemyss) No, sure; but, nevertheless, it is in
a working environment that is pretty harsh, and there is depreciation.
(Mr Hesketh) And be sure to take the point that not
everybody owns their site; and if you are renting a large site
it is an awful big cost to put down for your landlord.
(Mrs Allen) I think some of the larger dismantlers
and the responsible ones are working on this and have been for
some time and have got some routes ready; but, it is like we have
said, we have been waiting really for someone to decide which
way. If the manufacturers have their way, the dismantlers will
disappear, then where are we; we have spent thousands of pounds
on doing all this, just to be told that we are out of the stream.
So there has been that element, to a certain extent, with people,
such as my firm, who only deal with the End of Life yards; and
so there has been that hesitation over which way to jump. Having
said that, my firm is one that has got some money tucked away
to do it with, when we know when, how and in which direction we
want it to go.
183. In the DTI consultation paper, the estimate
from the DVLA is that the average cost to an ATF of investing
in an electronic system to issue Certificates of Destruction would
be around £2,000, which is apparently a lower running cost
than a paper system. Have your members put electronic systems
in place yet; does £2,000 sound right to you?
(Mrs Allen) It is not going to be too bad, because
we are finding that the system is replacing the paper system,
so you have got one against the other there. The only problem
we are having is the time it is taking to actually put the throughput
to the DVLA, that is slower than we would have hoped it to be;
but that is the thing the DVLA are working on. But, yes, I would
have thought that £2,000 was right.
184. Is it their fault that it is slow?
(Mrs Allen) At the moment, we think so, and so do
they, but they do not quite know why; so we have got a meeting
next week to try to come to some thoughts as to what is causing
185. Because they are trialing these electronic
(Mrs Allen) Yes; we are on the trial, and I think
part of the problem with my specific firm, in fact, is because
of the high volume, we are putting a high volume through at a
time, we are not perhaps doing 20 or 30, we are doing 80, or something
like that, at once. But it is working very well.
186. Thank you. And one dismantler estimates
that the administrative cost for an ATF would be around £12
per LVA, and I think there is a motor manufacturer who has estimated
about £8. Does that sound right to you, for each vehicle?
(Mr Wemyss) Is that for the processing of the data
187. It is just administrative cost, is how
it is worded in the consultation document, between £8 and
(Mr Wemyss) I think that would probably be fair.
(Mr Hesketh) Somewhere in that area sounds reasonable.
188. So there would be a cost of about £14
million to £22 million a year?
(Mr Wemyss) Yes.
189. And how do you see the Certificates of
Destruction process working; would you expect there to be two
stages, or would you liaise with the shredders over the CoDs?
(Mrs Allen) I feel that their issue point should be
when the vehicle starts to be depolluted, because then it goes
into the dismantling system. And, yes, probably, I had not thought
of a two-stage, but, thinking about it, from this morning's evidence,
that would be ideal, we would issue the last owner with a purchase
certificate which proved he had passed it on to a registered site,
and then when we commenced the process of dismantling it we would
register the CoD.
190. So you think that this system would work,
(Mrs Allen) That would work, yes. It would take out
of the loop the cars that possibly would resell again. Abandoned
cars, again, they can come in but they may be reclaimed by their
owners, and they could go out again without having that certificate
attached to them; and I think that would save some problems in
that direction too.
191. You were talking about meeting the DVLA
over the new system; are you confident that the electronic system
would be in place in time for the CoDs?
(Mrs Allen) That I could not say. It is going to have
to deal with a lot more cars than we are at the moment, obviously;
but that is their mandate, to get it up and running by whenever
the Government needs it to be.
Linda Perham: Thank you. Thank you, Chairman.
Sir Robert Smith
192. In your submission to us you have considered
the arguments for the introduction of an Automotive Recycling
Credit Scheme, and ARCS, I think, you have abbreviated it to,
under which, on the purchase of a new car, a sum would be paid
into a fund, and when the last owner received a Certificate of
Destruction they could apply for a refund of the recycling credit;
you are sort of arguing it as an incentive for people to dispose
of cars properly. Do you envisage the amount added on to a new
car under the proposed scheme would cover all the processing and
administrative costs of the End of Life Vehicles Directive?
(Mr Hesketh) The scheme we proposed was purely a capture
scheme, to get vehicles into the system. Our view is that a sort
of vacuum cleaner approach, rather than a brush approach, is going
to be a lot more successful, and we have evidenced that by the
fact that when scrap metal was very valuable there were no abandoned
vehicles to speak of, it is a fairly straightforward thing; so,
obviously, an artificial value for the vehicle. That does not,
however, mean that we could not tack on another chunk, as it were,
to deal with the processing.
193. Right; so this is more like the sort of
overseas' view with bottles, the purchaser pays something for
the bottle and anyone who hands the bottle back in gets the refund?
(Mr Hesketh) Yes, very much so.
194. And would you see it as being a flat rate
for all cars, or would you see some kind of environmental incentive
built in, depending on the recyclability of the car, a different
(Mr Hesketh) Again, I think that a recycling rate
would only be important if there were some processing costs built
into it. If it is just in terms of a deposit system, as it were,
then I do not think it would be significant; it should be a set
rate, such that the people introducing the environmental hazard,
as it were, are putting something down for the future for it to
be disposed of.
195. In your conclusions, you say "it will
be essential to ensure that funding is delivered directly to the
ELV processors as they will be faced with the significant extra
costs of operation at the point at which vehicles enter the system".
Can I just clarify what you mean there. First of all, are you
thinking of that as a sum in addition to the sum paid on the ARCS,
or is that the same thing?
(Mr Hesketh) No. The ARCS is purely to attract vehicles
into the system, to avoid the current problem of abandoned vehicles;
that was something we proposed some time back, on the basis that
it will attract the vehicles in, rather than them having to be
pursued, and it would limit the amount of policing requirement,
given the current state of information about vehicle ownership
and the problems with the ownership and transfer to ownership,
etc. With regard to the entry into the system, we see the Treatment
Facilities as a point of entry into the system, and obviously
the point at which people are going to have to carry out extra
work as a result of the implementation of the Directive. The people
accepting the vehicles for treatment are the ones that are going
to actually do the work involved, in the main; for example, the
depollution and removal of various bits and pieces. I think it
is important that that should be the focal point of any funding
that is attracted, where the work takes place.
196. And that is completely separate from the
(Mr Hesketh) The two could be combined, or not, as
the case may be. How funding can take place is dependent upon
who is going to do it.
197. That is what I am trying to work out, who
you are saying would pay into that fund that would go to the ELV
(Mr Hesketh) We would think that that is the manufacturers'
responsibility, more than anything, as set down by the Directive.
198. And could you just perhaps clarify again,
when you are talking of ELV processors, who are you talking about
there, are you talking about dismantlers, shredders?
(Mr Hesketh) No, we are talking about Automotive Treatment
Facilities, because in order to deal with the vehicles under the
Directive you will need to be an Automotive Treatment Facility.
Now providing you meet those criteria it does not matter whether
you are a dismantler or a scrap metal processor, or even somebody
who just takes a shine to the business and thinks they will have
a go; as long as you meet those criteria you can be a Treatment
Facility. But what will be apparent is that we must have a place
for vehicles to go where they are going to be treated properly.
199. What would be your best guess as to who
that will actually be, those Treatment Facilities, in that case,
the balance between what are currently shredders and currently
(Mr Hesketh) I think, scrap metal dealers, dismantlers
and scrap metal dealers feeding into shredders, or maybe their
own sites as well; a combination of everything, I should imagine.
I cannot see that people will choose necessarily not to do it,
but if people have got a current business focused on end of life
vehicles then they are going to choose to do it, and there are
various ways in which end of life vehicles come into the system,
and people will have to choose to be Treatment Facilities or not.
(Mr Wemyss) If I may say, whilst you have heard of
the shredders and this wonderful answer of these shredders that
they are going to be a panacea answer, from somebody else's suggestions,
Option 4, there are only 37 of them, and those are the people
that actually chop up the metal, they chop up the vehicle. They
will still have to depollute, somebody will still have to depollute
that vehicle before it goes through that shredder operation. And
so what we are supporting from our membership is that dismantlers
will, if they wish to play in this game, become AFTs and become
Treatment Centres and will do the depollution and take off parts;
do not let us forget sight of the recovery of certain parts, even
on the older vehicles, which have use, and part of the Directive
encourages us to do that. And if we put that straight to the shredder,
with it bypassing the current dismantling industry, that use would
be lost, because the shredder would not be interested in taking
various bits off, he would stick it through his rather large machine
to chop it into bits.