Registration, Evaluation and Authorisation of Chemicals (Reach)

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Alun Michael: The UK recently published a partial regulatory impact assessment. That is only the first stage of assessing the costs and the benefits. Further work is due to be undertaken to consider the indirect costs and the impact on downstream users; so this is work in progress. Our partial regulatory impact assessment estimates the direct cost to UK industry of the REACH proposals to in the order of £515 million over 11 years. That is in line with the Commission estimates published in October 2003, with a maximum overall cost of the revised proposal to be £7.5 billion. It is worth noting that that is significantly lower than the £18 billion to £32 billion estimates that the Commission gave at an earlier stage.

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We also understand that several other member states, including Ireland and Sweden, intend to produce impact assessments. All of that will help to bottom out the costs in a practical way. The Commission has also indicated that it will perform further work on three key areas: the withdrawal of substances, the impact on accession states and the impact on innovation. That work will play into our consideration of the impact.

As the hon. Lady suggests, the benefits also need to be considered. It is often the case, as we have debated in Committees previously, that it is more difficult to quantify, especially in cost terms, the benefits to human health and the environment. The estimated reduction of non-asbestos occupational cancer deaths for REACH to break even was 18 to 30 per cent. That was the rule of thumb. The cost and benefits assessments are subject to uncertainties and assumptions. The estimates must be considered in that context. The Commission estimated, however, potential public health benefits of £50 billion over 30 years.

Such matters are not insignificant, but the approach is valuable, in terms of greater knowledge and safety, and the ability to deal with chemicals of concern. The difference between the Commission's original figure and its latest figure is significant and helpful. I confirm that Treasury officials are members of the Whitehall steering group that considers all aspects of REACH. The Treasury has also been engaged as a party to the UK's impact assessment.

Richard Ottaway: May I press the Minister further about the operation of one substance, one registration, under his approach? The central thrust is for a consortium to be formed to register a single substance. However, the proposal will not work without the second pillar of the one substance, one registration approach, which is to give a monopoly to all those involved in the initial consortium. If not, people will piggyback in. The consultation document rightly says:

    ''in the interests of fair and open competition, companies must be able to join consortia''.

There will obviously be difficulties to do with commercial sensitivity and small companies that lack the capital resources needed to join a consortium under terms that it might establish. The Minister said that it is for those in industry to make proposals. He shakes his head, so perhaps he has come up with them. Either way, will he say where we are on new entrants to the market joining established consortiums and how he will deal with small businesses?

Alun Michael: As I said, there are a number of alternative ways of achieving the outcome. The advantage of one substance, one registration, and a requirement on all organisations to join a consortium, is that the scheme will thereby be made universal and people will not be left out.

There would have to be provision for those coming in later to piggyback, but to do so on the basis of a fair arrangement. If that arrangement can be negotiated

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with the industry, fine, but a back-up facility will be necessary for somebody to take decisions if there are difficulties in reaching an agreement or, for instance, if smaller companies feel that larger companies are squeezing them out. That is part of the role that we envisage for the agency—or ombudsman-type arrangement—which must have the strength to adjudicate in disputes. The alternative is a free-for-all, where individual companies or groups of companies can apply.

Our starting point was to advocate compulsory consortiums, which would require all the companies involved to come together and share the cost of putting in the evidence about a substance. That would reduce the cost, but make the requirements more exhaustive. We have said that we are willing to look at other options—I mentioned the industry leader, for instance. An organisation, company or association in a country may have the capacity and be willing both to take the task on and to accept contributions to the cost from others, on an equitable or agreed basis. That would lead to the same outcome and it is the outcome that matters. We must be certain that the system is fair, balanced and practical.

It is also important to note that the idea of one substance, one registration is being developed further specifically to accommodate the interests of small and medium-sized enterprises which industry representatives have raised with me. It would, for instance, accommodate organisations that joined later, and not just larger companies that supplied the chemical at higher tonnages. We recognise that there are commercial sensitivities about the uses and development of particular chemicals, and our revised proposal will protect such information.

I accept that the issue is not easy. If it were, I would be have been able to give the hon. Gentleman a one-sentence answer. None the less, the principle of one substance, one registration is worth pursuing, and the development of alternative ways of implementing it, from which the industry can choose—provided that a mechanism is in place to deal with contributions by later joiners and to resolve disputes so that those who happen to be first in the marketplace cannot exploit the situation—is an important part of ensuring that the proposal is practical.

Mr. Robert Key (Salisbury) (Con): Let me start by saying what a pleasure it is to serve under your chairmanship, Mrs. Adams. As you know, I am not a member of the Committee, but I want to ask the Minister about his thinking on the increased number of animals used in testing. I also want to ask him what assessments have been made and whether alternatives might be better.

I speak as a member of the Science and Technology Committee, which produced a report on REACH only last month. Most other members of the Committee took off for Malawi last night, but I, like other hon. Members in the Room, happen to be stuck serving on the Energy Bill, so I had to accept my colleagues' kind invitation to represent their views today.

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Our report concludes that the European Commission has broadly got things right, and we were generous enough to say that not everything that comes out of Brussels is bad. The Committee's reservations are enumerated in my amendment.

The Chairman: You must ask a question, Mr. Key.

Mr. Key: Of course. Has the Minister made estimates of the number of animals that will be needed for testing if the full 30,000 chemicals are to be dealt with? Would producing a smaller number of chemicals at a lesser volume make a substantial difference?

Alun Michael: I welcome the Select Committee report, to which the Government will respond formally. Clearly, the Committee saw advantages in the proposals and sought ways of improving them. To that extent, we take a similar approach, and I hope that my comments so far have made that clear.

The Commission has estimated that the draft regulation will require data to be gathered on approximately 30,000 chemicals. Of those, 20,000 are thought to be produced or imported in quantities of less than 10 tonnes. At that tonnage, the current Commission proposal requires 25 animals per chemical. It should be remembered that the tests are expected to demonstrate that most of the chemicals concerned are safe and therefore involve no threat to humans or animals. Nevertheless, those are the raw numbers with which we must deal.

The Commission proposal would require further data as the tonnage increased, to reflect the greater potential for human and environmental exposure. In the worst-case scenario—I must stress that it is the worst-case scenario, because there is a tendency to bandy large figures around on this issue—more than 1,500 animals may be needed per chemical where chemicals are produced in amounts over 1,000 tonnes. The chemicals industry already has some of the data, and there are other sources of information, such as the modelling of data and the grouping of chemicals, which allow data to be read across from one chemical to another. All of that could reduce the amount of new testing that will be required.

Minimising animal testing will be a significant element in moving towards one of our key objectives in the negotiations to which I referred earlier. One substance, one registration will clearly have an enormous impact straightaway, because there will be no duplication and, therefore, no duplication of the animal testing.

We are also considering issues such as mathematical modelling and computational methods for data generation, which should be developed and implemented wherever possible to assist in the prioritisation or consideration of chemicals and to reduce the requirement for testing. I have had correspondence from individuals. A fortnight ago, I received a letter from a scientist who referred to her research work. My reaction was to discuss it with officials and invite further representations. We are very happy to consider work that is being done in the field to minimise testing. As I said, we are currently dealing with raw estimates. Our objective is to reduce the

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numbers of animals tested partly through the promotion of the one substance, one registration proposal and by examining the alternatives.

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