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Christopher Booker's Notebook
(Filed: 24/08/2003)

How to scupper a 34bn-a-year industry
Defra dumps the onus on us
Royal Mail will subsidise rivals
Mr Prescott is moving Hampshire

How to scupper a 34bn-a-year industry

Britain's most successful manufacturing industry is threatened with a 6 billion a year bill by a European Union directive which would more than wipe out its 5.5 billion a year export earnings. It could also close thousands of smaller firms who rely in any way on using chemicals. The CBI this month sent a letter to the environment secretary, Margaret Beckett, pleading for a radical rethink of the proposed EU legislation known as the "Reach" directive (Registration, Evaluation and Assessment of Chemicals), and warning that it could mean disaster for Britain's 34-billion a year chemicals industry. But the UK is unlikely to protest too strongly, since it was the UK that suggested the directive in the first place.

Like many such proposals, the Reach directive, first put forward by Michael Meacher in 1998, might sound like a good idea. Its claimed purpose is to protect human health and the environment. What makes it unworkable, however, is the astonishingly cumbersome way it has been drafted - the proposals alone involved a record 12,000 pages of documents - and that it will achieve no useful purpose, since its relevant elements are already covered by existing legislation.

The essence of the Reach system, to be co-ordinated by a new European Chemicals Agency in Italy, is that anyone using chemicals for any industrial purpose must first register each chemical and its properties; then, if necessary, submit it for costly testing; and finally, if it is ruled to be dangerous, pay for authorisation to use it, unless this is forbidden. The scale of what is involved can be seen from the fact that this will apply not just to 30,000 separate chemicals, along with 70,000 polymers and 70,000 more "intermediates" - compounds relevant to working with chemicals - but also to any new chemical formulation used in a manufacturing process. To complete this assessment of EU chemical use, it is estimated, will take 100 years, yet without any requirement that obviously toxic products, such as organo-phosphates, should be tested first.

The consequences can be see from how the directive would impact on Gabriel-Chemie, an Austrian-owned firm independently run by Greg Hammond in Paddock Wood, Kent, with 50 employees. Mr Hammond's expertise is producing new colours for plastics, for customers such as Marks and Spencer, Sainsbury's, Tesco and Boots. Each week he may be asked to come up with 50 new colour compounds, often used in small quantities for just one specific purpose. His competitive edge lies in his chemical formulations, which remain commercially secret. Under REACH he would not only have to register each of 250-odd chemicals he uses, but also publicly disclose each formulation, so they would be instantly accessible to potential competitors, such as those from China already active in his market.

Like thousands of others, the more Mr Hammond assesses the implications of Reach the more alarmed he becomes. Not only will he have to hire extra staff to cope with the paperwork. His greatest fear is that, by laying bare his trade secrets, his business could soon vanish overseas, closing him down, because not the least absurd feature of Reach is that it will not apply to products imported into the EU. By imposing such colossal costs one of the chief centres of the world's chemical industry, the EU could thus be writing its suicide note.

No country has more to lose than Britain, whose chemical business has in recent years been growing at six times the rate of Germany's, its nearest European competitor. But the fact that this directive stems from a UK initiative means there is little our Government can now do to prevent the slow destruction of our last world-beating manufacturing industry. How those Chinese must be laughing.

Defra dumps the onus on us

Mrs Beckett's environment department, it was reported last week, is to impose on farmers and landowners full responsibility for disposing of any rubbish fly-tipped on their land, backed by criminal sanctions. In recent years fly-tipping has exploded across Britain's countryside, But what The Telegraph failed to report was why. Since the power to regulate waste management was handed over by Westminster to Brussels, the EU has issued an avalanche of directives making it ever harder to dispose legally of a whole range of waste, from vehicle batteries, tyres and vehicles themselves to builders' rubble and old fridges, In the past five years this has predictably resulted in a plague of fly-tipping which will only be made worse by the EU's WEEE directive, making it harder to dispose of any electrical or electronic equipment, from spin dryers to computers.

Simultaneously the EU is forcing a move away from rubbish disposal by landfill. This may be fine for the small states which initiated the policy, where land is at a premium. But for Britain, which relies on landfill more than any other EU country, it presents a massive problem. By 2016, under the landfill directive, Britain will be forced to close all but 14 of its current 182 landfill sites (incidentally leaving none at all in the South-East, where Mr Prescott plans another 300,000 homes).

According to the European Environment Agency, the UK will thus have to divert 27 million tonnes a year of biodegradable waste alone from landfill to other means of disposal. According to the Commons environmental select committee, this means the UK will have to instal one large new disposal plant every week for the next 14 years, which is not going to happen. The government plans to meet part of the problem by building 165 giant new incinerators. But these are so unpopular that it will have to override planning rules to impose them by diktat on resentful local communities.

Meanwhile, having created the fly-tipping problem themselves, the officials now propose to dump responsibility for it on the farmers, which is contemptible. But the real crisis is one ministers themselves will eventually be unable to walk away from.

Royal Mail will subsidise rivals

To promote "liberalisation" of postal services, the European Commission has produced two directives, 97/96 and 2002/39, to break up postal monopolies. One company set to benefit from this is UK Mail, now licensed to collect mail from business customers. It cannot actually deliver the mail. Its job is simply to transport it to a post office, from where Royal Mail does the rest. But in May the post regulator Postcomm, also set up under the EU rules, proposed that Royal Mail should only be allowed to charge up to 13p for delivering each item, which means at a substantial loss.

Last week, as "consultation" ended, Royal Mail said this loss will amount to 650 million a year, which it will have to make up by raising the price of a first-class stamp by 4p and a second-class stamp by 7p. Otherwise it will not be able to maintain its "universal service". At best we may thus have to pay more for our stamps. At worst we may lose that right to have our letters delivered anywhere in the country for which the Royal Mail was set up in the first place. All thanks to "liberalisation".

Mr Prescott is moving Hampshire

Lawyers have recently been protesting in The Times about the proposed move of Hampshire's courts to the "South-East". Their objection is that this will break up the centuries-old Western Circuit court system. What their letters did not reveal, however, was the background to this proposal, outlined in July in a letter from the Lord Chancellor, Mr Blair's friend Lord Falconer, to Rachel Lipscomb, chairman of the Magistrates Association.

Falconer explains that the administration of local justice across England and Wales is to be taken away from the Court Service and magistrates courts committees, traditionally run on a county basis, and transferred to a new executive agency, responsible for running "all courts below the House of Lords". These will run the courts on a regional basis, which will eventually, after a transitional phase, be aligned with the system of regional governments for England and Wales now being constructed by John Prescott as part of the "Europe of the Regions". The reason Hampshire is to be moved out of the South-West and into the South-East is that this is where, according to Prescott's blueprint, it belongs. Lawyers or magistrates wishing to protest will eventually find they are up against a brick wall with Mr Prescott and his friends in Brussels sitting firmly on top of it.