Draft Restriction of Hazardous Substances in Electrical and Electronic Equipment (Exemptions) (Fees) Regulations 2022
(1 year, 11 months ago)
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The Committee divided: - Ayes: 9 / Noes: 1 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rebecca Pow)
I beg to move,
That the Committee has considered the draft Restriction of Hazardous Substances in Electrical and Electronic Equipment (Exemptions) (Fees) Regulations 2022.
It is, as ever, a pleasure to serve under your chairmanship, Mr Hosie. We will endeavour to get on with this statutory instrument at full speed.
The Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment Regulations 2012, also known as the RoHS regulations, restrict the use of 10 substances that were commonly used in the manufacture of electrical and electronic equipment, but which have now been proven to cause harm to the environment and to animal and human health. This is particularly the case when products become waste, with the potential for those harmful substances to be released into the environment or in the workplace of those working in the waste treatment sector.
Businesses can apply for exemptions from the RoHS regulations if they need to use any of the restricted substances above the permitted threshold limits in order for products to function safely and reliably, and any such exemptions apply to the product, rather than to the specific organisation that applied for the exemption. The exemptions largely fall into three categories: lighting, medical devices—for example, the use of lead in emergency defibrillators—and control instruments, such as those used in explosive devices in mining.
When the UK was a member of the European Union, applications for exemptions and for the renewal of exemptions were submitted to and considered by the European Commission using derogated powers in the RoHS directive. On leaving the EU, that function was transferred to the Secretary of State by the Hazardous Substances and Packaging (Legislative Functions and Amendment) (EU Exit) Regulations 2020, bringing with it new freedoms to determine the outcome of applications as they apply to Great Britain.
The draft SI before the Committee makes provision to transfer the costs of undertaking the necessary technical appraisal and public consultations associated with that appraisal from the taxpayer to business. This approach is entirely in keeping with the requirements of the Government’s “Managing Public Money” principles, and the charge is set on a cost recovery basis. Such an approach is common practice in circumstances in which industry is required to apply for registrations, authorisations and licensing in order to comply with the regulatory requirements.
The fee will be £39,721 per application—very specific, but carefully calculated—and it will be payable on exemption applications received from 6 April 2023. Most of the cost reflects the cost to the Government of contracting technical specialists to undertake a technical appraisal for each application, because, as Members can imagine, they are very specific uses and require a lot of technical expertise, depending on the use. It is important that a full technical assessment is made when assessing applications to use restricted substances above the permitted levels, because of the risk of significant harm to human health and the environment. Crucially, the technical assessment will include an in-depth analysis of any potentially less harmful substitutes that could be used, to enable the sector to make an objective determination on an application.
Applications for exemptions are typically submitted by industry rather than by individual businesses, because exemptions are granted to products rather than to the organisation that submits the application. Historically, most applications for exemptions are made by trade bodies on behalf of a sector, and we anticipate that this collaborative approach will continue, with associated costs being spread across the relevant sector.
I stress that the fee is being charged strictly on a cost recovery basis that reflects the appraisal work undertaken. The amount payable will be regularly reviewed to ensure that it is correct. I hope that the introduction of an application fee will encourage industry to fully explore the use of less hazardous alternative substances, which we are constantly driving for, before submitting future exemption applications.
Hon. Members do not need me to remind them of the potentially harmful effects of lead and mercury on human health and the environment. We need to minimise their use. In line with published guidance, there is no need to conduct an impact assessment for the draft regulations, because any direct impact from them is judged to fall under £5 million a year. Because they alter existing policy, the draft regulations were subject to consultation, and unsurprisingly those likely to be subject to an application fee in the future did not support the proposals. Our proposals are entirely consistent with managing public money principles, but in response to those who raised concerns, we have committed to considering the merits of recognising exemption decisions taken by other jurisdictions that have similar RoHS legislation to the UK. Any such recognition would be subject to consultation.
The territorial extent of the draft regulations is Great Britain. They are considered a reserved policy. The devolved Administrations were engaged in the development of the policy and are content. The RoHS regulations fall within the Northern Ireland protocol, and businesses placing products on the Northern Ireland market are therefore bound by EU exemption decisions, and under unfettered access provisions can subsequently supply those goods freely to the GB market. That does not represent a loophole, as the Secondary Legislation Scrutiny Committee suggests. It is about ensuring that businesses in Northern Ireland can freely trade within the UK. I commend the draft regulations to the Committee.
The Chair
Order. I will suspend the sitting for the duration of the votes. We are expecting three Divisions, so let us be back here at approximately 6.45 pm.
The sitting suspended for Divisions in the House.
Ruth Jones
It is still a pleasure to serve under your chairmanship, Mr Hosie, and it is very good to be with colleagues on this cold winter’s evening as another piece of delegated legislation—on this occasion, the draft Restriction of Hazardous Substances in Electrical and Electronic Equipment (Exemptions) (Fees) Regulations 2022—is brought to the House. Week in, week out, we gather to debate legislation that Ministers bring to a delegated legislation Committee of Members of Parliament. This reflects a growing trend in the approach taken by Ministers to introducing policy and making things happen.
You will be pleased to hear, Mr Hosie, that I do not plan to speak for long, because this is a technical change. We will not oppose the regulations, but when we were part of the EU, applications relating to hazardous substances were dealt with in Brussels and so did not attract an application fee. Therefore this measure will be very new for our businesses to deal with, and they will be doing so in the most difficult of economic climates at this time.
The regulations make provision for the charging of fees in connection with the exercise of a function conferred on the Secretary of State by the Hazardous Substances and Packaging (Legislative Functions and Amendment) (EU Exit) Regulations 2020. It is worth spending a moment on the application fee of £39,721 because, as the Secondary Legislation Scrutiny Committee’s report says, it is a “surprisingly precise” figure. I would be grateful if the Minister could provide us with some clarity on where this surprisingly precise figure comes from, what the breakdown of the figure looks like and what steps were taken to lessen the burden on businesses. Does she see that figure coming down in the years ahead? On the payment of charges, I hope she will be able to explain what support businesses will be provided with. Will there be a payment plan to mitigate the impact of one large payment in one go? What does the payment process look like, and will officials be working actively and proactively with businesses?
There is a clear mention of partial refunds in regulation 5 of the SI and the SLSC’s report, so will the Minister set out how any refund process will work? What does the phrase “reasonable costs” mean, and what could its definition be? Like all the businesses that will be affected by these proposals, the Opposition want to know what considered the “reasonable costs” are that the Secretary of State may take into account.
It is important to note that here we are again addressing the impact of our departure from the European Union, and I urge Ministers to think carefully about the issues that need to be addressed across a number of important areas. I gently suggest to the Minister, with the season of good will in mind, that Ministers should perhaps look at introducing a detailed Department for Environment, Food and Rural Affairs-specific Bill so that we do not have to do government by delegated legislation. That would ensure that we could give all DEFRA-related business a chance to be scrutinised on the Floor of the House and, importantly, to give it the focus that it deserves. I recognise that some legislation will be very detailed and specific, but the draft SI before us almost makes the point for us.
Scrutiny takes many forms in many different rooms in this place but for a Department such as DEFRA we need big and bold legislation that reflects the Department’s importance and its responsibilities. We all know that consultation forms a key part of scrutiny, so I would be grateful if the Minister could set out why the consultation period was only a short six weeks. That is surely unusual for DEFRA, and I would be grateful if she could explain why the consultation period was so short.
It is clear that action on hazardous substances and the wider issues associated with packaging have to be part of a wider, clearer and genuinely ambitious plan to save our country. We have the technical legislation before us tonight, but we need a real plan and a real programme if we are to show the global leadership that so many people expect from us as a nation. As we discuss the draft regulations, we can only conclude that that programme needs to be one that does not see its targets move further and further down the line.
There are a few final points to pick up, and I hope the Minister will be able to address them in her winding-up speech. First, can we have an example of an exemption in the context of the draft SI and of whether it is possible for a business to move away from the use of hazardous materials? What support will be provided to businesses to do that, and is it something that certain businesses could do if the Minister commits to support them with the help of her excellent officials?
Secondly, the draft SI would not be a Brexit-related piece of legislation if we did not speak about Northern Ireland, so will the Minister set out what it means for the protocol discussions? How, if at all, will this proposal affect the internal integrity of and settlement in our United Kingdom? We cannot afford to do one thing with one hand and then do something else with the other. If the Minister was on the streets of Belfast and was asked what the proposal will mean for Northern Ireland, I wonder what the answer would be.
Lastly, no equality impact assessment has been carried out for the draft SI. I appreciate that the Minister explained why in her opening remarks, but this is a wider point. Will she set out why there is not a consistent approach to equality impact assessments? It should be a rule, and I look forward to hearing more from the Minister on this point.
We will not oppose the draft regulations tonight. However, as I wish all Members and the Minister a very happy Christmas, I look forward to getting back to business after the festive season, in the long battle to save our planet and protect our environment.
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP)
It is a pleasure to see you in the Chair, Mr Hosie. I thank the Minister for setting out the Government’s position on this required SI, which is further Brexit red tape and puts new costs on businesses at a financially difficult time. That is not something that we in the Scottish National party will support.
The delays are further evidence that claims of an oven-ready deal and Brexit ease were simply not true. Continued transitions and uncertainty could have been avoided had we not left the single market, and it is important that we point that out. Brexit is not working: it is bad for Scotland, bad for business and bad for the rest of the UK. For the reasons I have set out, we will oppose the draft SI.
Rebecca Pow
I thank the shadow Minister, the hon. Member for Newport West, for saying that she and her team will support the draft regulations. As ever, she asked some pertinent questions.
Quickly, the fee is, yes, very particular, because it has been specifically worked out. The majority of the cost relates to the technical appraisal I mentioned, which is undertaken by a specialist consultancy following a competitive tender. Obviously, the public procurement rules will be followed. That assessment is extremely important.
The hon. Lady mentioned the fact that, if the costs fell below expectations, a refund would be made. That might happen if, for example, this did not take long—a quick decision might be one reason for thinking about refunding money. However, all that is for consideration when the process arises.
On the consultation, six weeks is completely appropriate, given the simplicity of the policy. Officials have done a great deal of engagement with stakeholders. I think workshops met more than 250 businesses at more than 100 events, so a huge amount of engagement has gone on.
The Northern Ireland protocol was mentioned. We do not believe that the draft SI will have any impact on Northern Ireland business or on trade with Northern Ireland, because those businesses will continue to be bound by the EU RoHS legislation. They have unfettered access to Great Britain.
I am looking for a bit of inspiration, in case I left anything out on the issue of refunding costs, but I believe I have pretty much covered it. Guidance will be out in the new year.
The hon. Member for Newport West raised an equality issue. No equality impact assessment was necessary, because we judged that the provisions would not adversely impact on the disadvantaged groups covered by the equality legislation.
Ruth Jones
The Minister laid out what will happen in future. How will she communicate that to businesses, which are anxious about having to pay thousands of pounds without knowing what the money is going on? How will she communicate with people in a clear and timely manner?
Rebecca Pow
It is important to keep our businesses on board and to engage with them, as has been done all the way along. Guidance will be issued in the new year, so all should become clear.
The hon. Lady asked about exemptions. It is interesting that I asked many of the same questions myself. In terms of the products that the substances covered would be used in, there might be teeny-weeny amounts of mercury, for example, but above the amount that might normally be used. However, these products are considered so important that exemptions are granted. Previously, that happened under the EU gold standard system; now it will happen under our replica system—it is a replica, but it also gives us flexibility, so there might be other opportunities.
Mercury, to give two small examples, is used in insect traps and in forensic testing to check for counterfeit money. It is also used for lots of functions in healthcare, such as in intravascular ultrasound imaging systems. Lead and hexavalent chromium are used in civil explosives—in mining and quarrying—as I mentioned. Obviously, we always push for substitutes to replace them that are not harmful—that is always a top criterion.
To the point about keeping in contact with industry—inspiration has appeared in the form of a note—I stress that officials are in constant contact. It is so important to bring the industry on board. Officials have had two meetings with the trade bodies just today, before this Committee, so I think we can be sure that that will continue. As the shadow Minister said, that is important.
The draft regulations remove a cost from the taxpayer and place it on the businesses that are set to benefit from the exemptions to the substance restrictions set out in the RoHS regulations. As I mentioned, almost everything would be done through trade bodies, so lots of businesses will be supported by one trade body. Our proposals are based strictly on a cost-recovery model and reflect the principles of managing public money. I commend the draft regulations to the Committee.
Question put.