My Lords, the regulations were laid before the House on 18 October. 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/or human health. This is particularly the case when products become waste, with the potential for these harmful substances to be released into the environment or 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. Any such exemptions apply to the product rather than to the specific organisation that applied for the exemption. When the United Kingdom was a member of the European Union, applications for exemptions and the renewal of exemptions were submitted to and considered by the European Commission using delegated powers and the ROHS directive. On leaving the EU, this 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 instrument makes provisions to transfer the costs of undertaking the necessary technical appraisal and public consultations associated with it from the taxpayer to business. This approach is entirely in keeping with the requirements of the Government’s Managing Public Money principles. 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 regulations, authorisation and licensing to comply with regulatory requirements.
The fee will be £39,721 per application and will be payable on exemption applications received from 6 April 2023. Most of those costs reflect the cost to the Government in contracting with technical specialists to undertake the technical appraisal of each application. It is important that a full technical assessment is made when assessing applications to use restricted substances above the permitted level that could cause significant harm to human health and the environment. That technical assessment will, crucially, include an in-depth analysis of any potential less harmful substitutes that could be used to enable the Secretary of State to make an objective determination on each application received. Applications for exemptions are typically submitted by industry rather than individual businesses, because exemptions are granted to products rather than the organisation that submits the application. Historically, most applications for exemptions are made by trade bodies on behalf of a sector, and we anticipate this collaborative approach to continue, with associated costs being spread across the relevant sector.
I stress that the fee is being charged strictly on a cost-recovery basis, reflecting the appraisal work undertaken. The amount payable will be reviewed regularly. I hope the introduction of an application fee will encourage industry to fully explore the use of less hazardous alternative substances before submitting full exemption applications. Noble Lords do not need me to remind them of the potential harmful effects of lead and mercury on human health and the environment, so we seek to minimise their use.
In line with published guidance, there is no need to conduct an impact assessment as any direct impacts from this instrument are judged to fall under £5 million per year. In any event, the only costs on business arising from this instrument relate to Defra’s appraisal of exemption applications. Costs on public bodies such as these fall within the statutory exemptions for which impact assessments are required.
This instrument was subject to consultation, as it alters existing policy. Unsurprisingly, those likely to be subjected to an application fee in future did not support these proposals. Our proposals are consistent with Managing Public Money principles, but in response to those concerns we have committed to consider the merits of recognising exemption decisions taken by other jurisdictions that have similar ROHS regulations to those in the UK.
The territorial extent of this instrument is Great Britain. This is considered a reserved policy, but the devolved Administrations were engaged in the development of the policy and are content. The ROHS regulations fall within the Northern Ireland protocol; as such, businesses placing product on the Northern Ireland market are bound by EU exemption decisions and, under unfettered access provisions, can subsequently freely supply those goods to the GB market. This does not represent a loophole, as suggested by the Secondary Legislation Scrutiny Committee, but is about ensuring that businesses in Northern Ireland can trade freely in the UK. I commend this instrument to the Committee.