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Patricia Hewitt, the e-commerce minister, has slammed claims in Sunday Business that retail prices for electronics and IT goods could rise by up to 20 per cent following new EU recycling laws.

In a letter to the paper, she said the allegation is "unfounded and simply incredible".

Hewitt attacks a number of assumptions in contained in the Sunday Business article, "Dixons counts the cost of EU levy". Retailers will not be forced to fund recycling waste, as the article suggests; no-one knows how much the recycling takeback requirement retailers will cost; the timetable for the enactment of the directive was wrong (many more legislative hurdles to jump).

She then makes her political pitch with the assurance that the "UK implementation of the directive will seek to keep all costs as low as possible without compromising our environmental objectives". Truly, one can square the circle.

In a final flourish, she says that the government is 'actively looking at exemptions for the smallest retailers'. Which won't be popular with the big players, we guess.

According to the Sunday Business article, the WEEE (Waste from Electrical and Electronic Equipment) Directive would land Dixons with extra costs of £17m a year, and UK electronic retailers collectively £500m extra.

We know that Dixons was surprised by the article - we were told that no-one from Sunday Business had contacted the company, and that it had not calculated the costs of complying with the WEEE directive yet. Besides, the logistics headache, rather than cost, was the company's main concern.

So from where did Sunday Business get this information if not from Dixon's official channels? The answer will lie either in a Dixons manager going freelance, or with a Dixons supplier.

Whatever the true costs, the WEEE Directive is going to become law in the next year or so: the EU, led by environmental hawks such as Germany and Sweden are simply not going to back down over the millions of tonnes of IT waste material (often toxic) which are dumped in Europe each year. And the UK is going to follow willingly. Recycling is enormously popular with the public, especially when it costs them nothing.

Retailers and manufacturers have already lost the war against its burdensome provisions. Now they can quibble only over the details. ®

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EU recycling law to cost Dixons £17m a year

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