Motorists To Be Liable For Vehicle Disposal

Motorists in England will be forced to pay for the recycling of their old cars, under a significant concession to the motor industry which ministers are poised to announce.

The move will see carmakers spared the annual costs of scrapping old vehicles over the next four years as Britain complies with a European directive on recycling.

It will also delay the obligation on manufacturers to pay for taking back and dismantling "end of life" vehicles - ELVs - until at least 2007.

The decision is likely to prompt an outcry from environmental groups and local authorities, which fear a sharp increase in the number of abandoned cars if motorists face the costs of recycling.

At present, 2 million cars a year are scrapped or deemed to be end-of-life vehicles in Britain. A parliamentary debate was told last month that almost 20 percent or 350,000 of those vehicles were dumped on the streets, with a growing number burnt out.

In April, Britain and other European Union member states were due to have introduced the ELV directive, forcing carmakers to meet all or a significant part of the recycling costs of all new vehicles from 2002-07, and all vehicles on the road from 2007 onwards.

The government, however, is expected to tell MPs this week that it will introduce a "last owner pays" system up until 2007, while continuing to discuss different financing options beyond that.

Industry groups representing the scrapping industry yesterday predicted that rising recycling costs would lead to a mountain of abandoned cars, particularly if ordinary motorists faced the clean-up costs.

David Hulse, director-general of the British Metals Recycling Association, said: "If the last owner has to meet this cost they are more likely to dump their car rather than have it properly recycled."

Hulse also warned that the decision could lead to a proliferation of unlicensed scrap yards.

It is understood, however, that the government is planning to strengthen licensing controls and computer records to trace owners of dumped cars.

Motorists who abandon vehicles rather than pay the recycling and dismantling costs could face hefty fines.

The French and German governments, faced by fierce lobbying from carmakers, have vowed to impose the directive from 2007 while also considering tax breaks for companies faced with large liabilities.

Several carmakers warned that a stricter regime in Britain could force manufacturers to set aside large balance sheet provisions for vehicle recycling, threatening some smaller groups such as MG Rover with insolvency.

The move requiring a vehicle's last owner to pay for the recycling costs until 2007 will be greeted as a victory for carmakers such as Ford, Vauxhall and MG Rover.

They are still campaigning to reduce their liabilities from 2007, arguing that motorists and dismantlers should bear some of the costs. Financial Times