Legal base	(a) — (b) Article 175EC; co-decision; QMV
Department	Environment, Food and Rural Affairs
Basis of consideration	Minister's letter of 14 July 2009
Previous Committee Reports	HC 16-x (2007-08), chapter 1 (30 January 2008) and HC 19-xix (2008-09), chapter 3 (10 June 2009)
Discussed in Council	25 June 2009
Committee's assessment	Politically important
Committee's decision	Cleared

Background

9.1 According to the Commission, the largest industrial installations account for a considerable share of total emissions of key atmospheric pollutants, and have other important environmental impacts. Emissions from such installations have therefore been subject to Community-wide legislation for some time, notably Directive 96/61/EC[23] concerning integrated pollution, prevention and control (IPPC). However, because the Commission considered that insufficient progress had been made, it put forward in December 2007 these two documents, which we described at some length in our Report of 30 January 2008, together with an account of the Government's initial reactions. That Report also noted that the Government would be carrying out an Impact Assessment, and we therefore said that we would reserve judgement until we had seen that.

9.2 As we subsequently reported on 10 June 2009, we received from the then Minister for Sustainable Development, Climate Change Adaptation and Air Quality at the Department for Environment, Food and Rural Affairs (Lord Hunt) a supplementary Explanatory Memorandum of 2 May 2009, summarising the progress to date, and indicating that the Presidency would be seeking political agreement at the Environment Council on 25 June. This was followed at our request by a letter of 5 June from the Minister indicating in more detail the state of play on individual aspects of the proposal, and providing an Impact Assessment, based on certain assumptions as to the outcome of the Council.

9.3 In the light of this information, we commented that this was evidently an extremely complex proposal, dealing with a range of activities with significant health, environmental and cost implications, and which sought to cover in a single instrument a number of existing measures. We added that it had proved difficult for us to obtain a clear view of its implications, but we noted that many of the detailed aspects of the proposal would not give rise to increased costs in the UK. We also noted that, as a result of the discussions which had taken place in Brussels, the Government was hopeful that the Council would agree to amendments which would for the most part maintain the current position for the time being, and that the Government now estimated that the annual costs of the proposal to the UK would be reduced to some £214 million, with benefits of some £178 million.

9.4 Given that the Council had yet to confirm the changes which the Government foresaw, and that the UK was still pressing for further flexibilities in certain areas, we said that we did not feel able at that stage to clear the document. However, we recognised that the Government might well be anxious to sign up to a political agreement at the Environment Council on 25 June, in order to consolidate the gains it had secured to date (or indeed any further improvements it managed to secure). Consequently, we said that, if such a deal were to be on offer, we would be willing in this instance to exercise our discretion under paragraph 3(b) of the Scrutiny Resolution to enable the UK to agree to it, notwithstanding the absence of scrutiny clearance: but we added that this was on the understanding that, if it did so, we would expect to consider the matter further on the basis of a report from Minister on the outcome.

Minister's letter of 14 July 2009

9.5 We have now received from the Minister of State at the Department for Environment, Food and Rural Affairs (Jim Fitzpatrick) a letter of 14 July 2009, confirming that political agreement was reached by the Council on 25 June very much along the lines previously indicated, though he adds that the costs and benefits would now be re-assessed on the basis of the agreed text.

Conclusion

9.6 We are grateful to the Minister for this confirmation of the basis on which the Council has reached political agreement on the proposed recast of Directive 96/61/EC, and, although we note that the Government will now be re-assessing the costs and benefits of this measure, we understand that these are not expected to differ significantly from those we reported on 10 June (and that, insofar as they do differ, the balance between the two is expected to be more favourable). In view of this, we are now clearing these two documents.