| Previous Section | Index | Home Page |
4.41 pm
Mr. Michael Meacher (Oldham, West): I wish to make it clear immediately that the Opposition--soon, no doubt, to be the Government, if Wirral, South is anything to go by--strongly support the principle of increased
recovery and recycling of packaging waste. However, the issue has been handled by the Secretary of State in a manner that can only be described as shambolic.
At the outset, the right hon. Gentleman failed to take control of the issue and tried to hive off all responsibility to the industry. Given the diversity of business interests involved, that led, not surprisingly, to protracted wrangling and uncertainty. Then the right hon. Gentleman tried to reconcile the differences at the notorious meeting of 15 December 1995. If the Minister thinks that agreement was reached then, I have to tell him that there is still a great deal of disagreement about what is supposed to have been agreed on that occasion. Even after that, the calculation and assignment of legal obligation remains extremely complex and an unnecessary burden on business. Contrary to what the Minister said just now, we cannot even be sure that the terms of the European directive can be met.
The regulations that are now finally being introduced are more than eight months late, beyond the European Union deadline, following repeated delays. The statutory guidance that is so essential to the technical implementation of the scheme has still not been produced. The whole handling of the regulations has been a masterpiece of muddle, mismanagement and market excesses.
The fundamental flaw, as many in the industry have said, is that the principle of shared responsibility, which the Government purport to endorse, is incompatible with the free operation of market forces, which the Minister ended his speech by praising and which the Government certainly encourage.
At the 15 December meeting, it was clearly accepted and laid down that the share of the legal obligation attributed to each sector would correspond roughly to the share of the overall cost of recovery and recycling that each sector would bear. That key principle breaks down if those who have substantial obligations for packaging supplied to domestic consumers--that is, the retailers--can discharge a large part of their obligation by recovering and recycling commercial and industrial waste supplied to them by UK packers and fillers for which they have no producer responsibility obligations.
It would be wrong to say--I am not saying it, contrary to the Minister's assertion--that retailers can evade all their obligations in this way. I readily accept that retailers have the largest obligation, at 47 per cent., but it is a reasonable estimate--confirmed to me by the industry--that retailers can discharge as much as two thirds of their obligation by this means. Thus, they will be able to limit their share in the cost of the obligation to recover and recycle used packaging from the household waste stream to about 15 per cent. of the total. It is difficult to see how that can be a fair allocation of "shared" responsibility. It is in clear defiance of the third principle of the 15 December agreement, which is:
For the same reasons, the regulations will make it less likely that packaging chain members with large quantities of non-obligated transit packaging will join in a collective or shared approach. That will undermine the viability of Valpak. Some major retailers, Tesco for one, have already made it clear that they will not participate. That will burden multi-material collective schemes, which are supposed to be the Government's preferred approach, with more difficult-to-recover materials and thus increase the cost of achieving compliance for their members. That in turn will generate a large cross-material subsidy between paper and other materials; some have estimated that it could amount to as much as £45 million a year. That will seriously disadvantage the paper industry.
It is surely evident that what is wrong with the regulations is the fact that the Secretary of State wanted to have his cake and eat it. He wanted, for reasons of party dogma, to leave it all to industry to decide and to wash his hands of any direct involvement or display of leadership.
Mr. Robert B. Jones:
We have made it abundantly clear that we want to work with industry to ensure that it evolves a scheme of which it feels it has ownership. We do not want to go down the German road. I know that the hon. Gentleman is about the only person left on the Labour Front Bench who openly believes in a command and control economy, but that is not how we want to proceed. That is why we have worked with industry to come up with a decent set of regulations, for which it has a sense of ownership. I know that the hon. Gentleman is an enthusiast for the German system, but it has been disastrous.
Mr. Meacher:
The hon. Gentleman has such a taste for projecting his prejudices and insults that he simply does not listen to the facts. He should not say what I have already clearly refuted. I repeat that I have never supported the German scheme.
Mr. Jones:
Will the hon. Gentleman give way?
Mr. Meacher:
No, I shall not give way. I have never supported the German scheme. Germany's level of recovery and recycling is better than ours, but I have never supported the German green spot scheme. If the Minister suggests that I have, I shall give way to him.
Mr. Jones:
I shall quote the hon. Gentleman verbatim from his speech to the Environmental Services Association. He said:
When the shared responsibility approach was finally decided on--it is unique to the UK and has resulted in a complex and previously untried set of legal arrangements and obligations--the Secretary of State went along with it. When that approach was then distorted by the exercise of market powers by certain sections of the industry, he tamely assented to it. That is why this whole exercise is now in such a mess. It is all due to the right hon. Gentleman's abdication of responsibility and chronic lack of leadership.
In two months' time, the Government will be swept away. They may be swept away by a landslide, but they will certainly be swept away. In view of the mess created by the regulations, I want to make it clear that things cannot simply be left as they are or merely referred to the Advisory Committee on Packaging for consideration during the two-year review. That would not be sufficient. If we were to do that, we would entrench cherry-picking, undermine Valpak and other multi-sector schemes, and weaken the shared approach. It would also make it almost impossible for many obligated companies to use the individual compliance route. The Government have insisted that that route be kept open so that the field is not tilted in favour of exemption schemes, but unless something is done, individual compliers will find it almost impossible to obtain the necessary reprocessing certificates, except at prohibitive prices.
Another difficulty if things are allowed to remain as they are under the regulations is that there is no plan to ensure that the necessary collection, storing and reprocessing capacity is available to meet higher targets in future years. That problem has now been made more acute by the standstill over the past year while industry waited to see exactly what obligations the Secretary of State would impose and by his recent increase in exemptions to the £5 million turnover threshold. The effect will be a huge increase in the need for reprocessing capacity in a few years' time, which will not be met in advance by market forces.
Basically, we now need a mechanism to ensure that obligated companies, whether individual compliers or companies in exemption schemes, are matched with reprocessers producing recycling certificates. We need a requirement that only such certificates are acceptable evidence of compliance, and that such certificates will be issued only for a company's obligation tonnage in each material for which it has an obligation. The objective of the proposals would be to prevent expensive cross-material subsidy and to prevent small and medium companies being put at a competitive disadvantage by restricting access to their own waste products. The purpose would simply be to restore the pre-eminence of the shared approach principle, in which the Government claim to believe but which they have done nothing to prevent being undermined. It would also strengthen the position of Valpak as a multi-sector scheme, which we should like to consolidate.
I therefore give notice that an incoming Labour Government will seek an early review of the regulations to find the best means of securing those objectives.
That is very much in line with the proposals set out in early-day motion 299, which has now been signed by more than 95 hon. Members from both sides of the House.
I appreciate that that is only an interim solution and that longer-term solutions must await a more thorough review by the advisory committee or an equivalent body. Several such longer-term questions need to be asked. First, is waste minimisation being sufficiently encouraged? That is not directly addressed in the regulations, except in the sense that less packaging means less obligation. Secondly, would it be sensible to have a split target--one that maximises recovery of commercial and industrial waste, which is relatively clean and easy to collect--and then add to that a separate domestic stream target? Thirdly, do the regulations sufficiently encourage re-use or positively discourage it?
There are other concerns, too. Hon. Members will know that local authorities have made forceful complaints. They are disturbed that they will be placed in a subordinate position to the private sector, especially where retailers set up rival schemes. The local authority recycling advisory committee has let it be known that retailers will threaten existing recycling infrastructures if they take control of car park schemes and reduce the viability of local collection rounds.
"Each sector must play an equitable part in relation to the domestic waste stream".
Moreover, that produces a series of other distortions elsewhere in the packaging chain. It will put many companies, particularly small and medium ones, at a serious competitive disadvantage--to answer an earlier Conservative intervention. They produce or supply the
transit packaging, but because they are prevented from gaining access to it, they will have to discharge their obligations by recovering other, more expensive, material. Figures shown to me suggest that the wholesaler could face a cost of compliance of up to two and a half times as much as his retailer with an equivalent turnover.
"We accept that a sensible regulatory regime, as in Germany or Japan, will be the best contribution to a thriving sector."
Mr. Meacher:
That in no way suggests that we accept the German scheme. The scheme that the Secretary of State has introduced is to be repudiated because it leaves the problem entirely to industry to resolve, with companies quarrelling among themselves endlessly,
| Next Section
| Index | Home Page |