Draft Restriction of Hazardous Substances in Electrical and Electronic Equipment (Exemptions) (Fees) Regulations 2022
(Limited Text - Ministerial Extracts only)
Read Full debateThe 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.
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.