Examination of Witnesses (Questions 260-296)
15 DECEMBER 2003
MR NEIL
MARSHALL, MR
STUART COTTAM
AND MR
SHANE MELLOR
Q280 Joan Ruddock: What could be done
to streamline the process? We have heard from others that there
are lots of difficulties.
Mr Marshall: Which process?
Q281 Joan Ruddock: The process of planning
applications, of licensing, in relation to new directives. Have
you any thoughts? You may not have but it is an issue that has
been raised by others.
Mr Marshall: Clearly, you can
have a model and if the planning authorities referenced against
that model, unless it was unusual, I think there might be some
assumption that planning would be granted. That would certainly
help enormously. I know that government generally is looking to
see whether the planning system as a whole can be stepped up.
It is a major issue and we are constantly being faced with regional
differences, right down to grass roots level. Again, I think this
is unfair if the interpretation of regulation varies enormously
from one part of the country to another.
Mr Mellor: My consultant engineers
were told by the Environment Agency that I would not gain planning
permission before I had even submitted my plans.
Q282 Joan Ruddock: Before you had submitted
your plans to change what you have?
Mr Mellor: We have been told I
will not get it by the Environment Agency. They say they will
object and we are the major handler of ELV within my council area.
Joan Ruddock: Maybe we can try to pursue
that. Thank you.
Q283 Mr Mitchell: You said only one firm
had made the investment. I can see that you are being messed about
and that the authorities do not have a view of how the market
works and what need to be done to give it clarity, but surely
only one is a comment on the commercial acuity and initiative
of your members, is it not? It is pathetic.
Mr Marshall: Absolutely not. We
still have responsibilities and therefore funding mechanisms are
in the ether so you cannot make plans. One negative aspect of
DEFRA and the Agency is they do not have any idea of commercial
drivers. On ELV in particular there has not been a recent assessment
of where we are. As the regulations have been topped up, bolted
on, added to in recent months, no one has said, "What does
this mean? Is it affordable?" It seems to me that should
be basic, good practice. If you are a business, this is what you
do. You say, "What commitment have I made? What will it cost
to meet that commitment? Should I then be in that game?"
If government is a partner in this, it should also be doing precisely
this. At the end of the day, it is driving those costs by defining
the system, by defining the routes to the system, and it simply
is not happening.
Q284 Mr Mitchell: You are quite right
but I can also see that here is a market, however it is defined
by government, however incompetently it is clarified by government,
however much is bolted on. There is a market there and a prospect
and anybody with any sense is going to rush to invest, to move
towards it, rather than just hanging back in terror. The fact
that only one has done so is rather frightening.
Mr Marshall: I do not think we
are hanging back in terror. We are waiting to see what the elements
are. Many of these players are the same players who are facing
the uncertainty of ELV. My members have to sign up by 31 January
for a system which still is not yet defined. The final consultation
will come out in the middle of January. We still do not know what
the costs or obligations are. We still do not know some of the
regulatory requirements for something which was imposed on 3 November.
This is an outrageous situation.
Q285 Joan Ruddock: Is it not a fact that
if you do not invest your members are just going to go out of
business because the proportion of your businesses that deal with
these matters is so large.
Mr Mellor: Maybe that would be
the preferred option.
Q286 Mr Mitchell: Oh, come on.
Mr Mellor: No; seriously. I go
to my bank manager. How can I say to him, "Can you lend me
£100,000 against this?"? He will say to me, "Okay.
How are you going to get a return on that?" I do not know.
I do not have the information.
Mr Cottam: For us to know what
future we have in ELVs post-2007, we have to see the next stage
of the legislation. We know that the DTI have yet to define what
an adequate infrastructure for authorised treatment facilities
is. We also know that the vehicle manufacturers are agitating
for somewhere between 50 and 500. A figure of a 10 mile radius
for the public to get to an authorised treatment facility has
been bandied about. That would give 300 contracted ATFs throughout
the UK from the current 2,700 operators. 2,700 operators can go
out there and invest and think they have a business opportunity.
Post-2007, 2,400 of them have not. That is why Shane cannot go
to his bank manager and justify his investment.
Q287 Mr Mitchell: With the fridges situation,
the problem was that it not only required investment like this
but the equipment they were asked to invest in was imported from
Germany and there were delays in getting it and ordering it. What
is the case here with the kind of equipment you will be needing
to invest in to fulfil these directives, eventually?
Mr Marshall: Some of it does come
from Germany in this instance and there will be log jams because
the ELV requirement is common across other European land masses.
There again, we will have companies who will be told by the Agency
that they will have to stop business because they will not be
able to implement their plan, because there will be delays in
supplying the equipment. I have every sympathy for these people.
They do not know whether they have an economic future because
elements of this system have not yet been defined.
Q288 Mr Mitchell: On the fridges, the
Germans and Scandinavians sat back virtuously and said, "Goody
two shoes. We have already invested in this equipment and we have
it." Is that going to be the case anywhere in respect of
the equipment used for these two directives?
Mr Cottam: Yes. Waste electronic
equipment recycling is happening in Scandinavia, Benelux and Germany
now, so those people have designed pieces of kit that will process
this equipment.
Q289 Mr Drew: On the issue of DEFRA and
their relative under-powered state of inability to deal with the
complexities of these issues, what did you need from DEFRA in
terms of the type of skills that you have not seen from officials?
Is this in any way repairable at this stage?
Mr Marshall: There are two areas.
One is the capability to justify actions, pretty basic from my
point of view. Constant change is happening and I think that is
something that we deserve. Secondly, there appear to be no lawyers
within DEFRA or the Agency, so issues can be held up for months
and months because no one can translate the desire into the words
for the words to be tested by the lawyers.
Mr Cottam: What we need is the
three pillars on which we can make sound business investments.
One, what exactly do we have to do? Two, how can this be justified
and sustained? In other words, who is going to pay us to do it?
Three, there is going to have to be effective regulation to ensure
a level playing field. On ELV, we are faced with a situation where
we have to make speculative investment because the government
is two years late in implementing the legislation.
Mr Mellor: As part of the DTI
consultation group, I have to say that DEFRA were not always represented
at the meetings that we had, which I found bizarre. They are two
minutes' walk down the road. I have travelled all the way from
Norwich and they cannot be bothered to turn up for a meeting or
they do not have the resources to.
Mr Marshall: I would like to add
basic project management skills. This is complex. This is not
the only thing that DEFRA is dealing with. They look in many directions
and I think that is a fairly clear requirement: that you define
your objectives early on and you plot your way through it.
Q290 Mr Drew: Would it have helped you
if you had had a clear ministerial line of responsibility in the
sense that there should have been either DTI or DEFRA taking the
lead?
Mr Marshall: Absolutely. There
are seven agencies involved in ELV. That is, DTI, DEFRA, DVLA,
the Agency, CIPA, the Northern Ireland Office and HSE. It is something
of a muddle and clearly there is a need for leadership. Also,
I think there is a need for political engagement and there really
has been very little with the recycling sector over this period.
It is unforgivable. It is a major plank of the government's forward
programme on recycling.
Q291 Mr Drew: What was the nature of
the involvement that you had? Were these regular meetings? Were
there many of them? What status did these meetings have? What
happened—obviously, from what you said, not very quickly—as
a result of these meetings? Can you explain the one that was cancelled
today?
Mr Marshall: Today was the final
consultation which defines what structure we will have for ELV.
We still do not know.
Q292 Mr Drew: Why was it cancelled?
Mr Marshall: It was cancelled
by the DTI. We have had formal meetings on the broad structure
which have involved ourselves, the vehicle manufacturers and the
major agencies. Where we have seen particular problems have been
in the sub-meetings involving officials particularly from DEFRA
and the Agency, where you have agreement; you go back and the
position has changed completely. There is lack of justification
for changes. We suddenly hear that HSE wants to get involved and
bolt something on. This is all part of the mystery of the forward
plan.
Mr Cottam: As part of the consultation
process, we were asked if we would agree to investigate the own
marque principle on the basis that all the other options would
remain on the table. When it became apparent that we could not
agree with own marque because we did not think it was sustainable,
we were told that there was not enough time to investigate anything
else.
Mr Mellor: We have never agreed
with the own marque approach. We said from the outset we could
not see it working.
Mr Marshall: All of the independent
studies commissioned by government have suggested something else.
Mr Mellor: If we had a central
fund mechanism that was going to be put into place, you would
see our industry investing in that because they would know they
did not have to count on getting a vehicle manufacturer's contract.
They would know they will be able to handle every end of life
vehicle and be paid for that vehicle. At the moment, all those
things are up in the air.
Q293 Mr Drew: In terms of the lack of
commercial expertise which you have made very clear, surely government
can bring in consultants, those wonderful people? Was there any
evidence of these people who came from the industry or was this
all done in-house?
Mr Cottam: There was notably an
Ernst and Young report which suggested a central fund, which was
based on a visible fee on the cost of a new car. All sectors involved
in the end of life vehicle directive were happy to run with that
one, as was the DTI initially, and government took it away. We
never had an explanation.
Q294 Mr Drew: Can you speculate why it
was taken away? Money?
Mr Cottam: It was a political
decision because the Tories might have cried stealth tax, I would
imagine.
Q295 Mr Drew: Producer pressure?
Mr Cottam: No. The producers were
happy to run with that.
Mr Marshall: These things are
often analysed differently when situations change over the course
of time. I mentioned before that there is a systemic bias towards
the vehicle manufacturers within government in ELV and that is
abundantly clear.
Q296 Mr Mitchell: Your position—I
am glad you have put it so strongly this afternoon—is quite
clear and sharp. If you are told what you have to do, you will
invest to do it, but you need the certainty, the clarity and the
instructions. The problem is that you do not get either. Whose
fault is that? Is it your impression that you have government
departments and agencies being dragged reluctantly behind a European
regulation they are not quite sure about or is it just that they
are keen on the principle but not quite sure how to fit it into
the market because they do not have the market skills, the experience
or the knowledge of the industry? Which is it?
Mr Marshall: I think it is a systemic
bias towards the people who should be paying for it. It is as
simple as that. Producers should be responsible.
Mr Mitchell: Thank you very much. I am
sorry if I have sat there chortling through some of the evidence,
but it is essentially a very sad picture of a muddle that should
never have been allowed to happen. Thank you very much indeed.
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