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4.58 pm
Sir Roger Moate (Faversham): That was a rather muddled speech from the hon. Member for Oldham, West (Mr. Meacher). He was on strong ground when he expressed the valid concerns widely held outside the House about the possible advantages to the retail sector, but he spoilt his speech with his extraordinary and excessive abuse of the Secretary of State, and his failure to understand that the scheme has the great advantage--there are disadvantages, which I shall deal with--of having been developed in co-operation between Government and industry.
By expressing criticism, the hon. Gentleman was criticising those many people to whom he also paid tribute. He went on to promise a review, which we all
welcome, but the Minister said that there would be a continuous process of review, even before the implementation of the regulations. There are strong points to be made, but the hon. Gentleman was rather muddled, and spoilt the strength of his case.
I am sorry that the debate is to be so short, as it is of enormous importance. I shall try to be brief. The paper mills in my constituency recycle about 1 million tonnes of paper a year, and there is a steel mill that recycles 1 million tonnes of scrap metal every year, so I can claim that we are in the forefront of UK recycling.
Years ago, as many hon. Members who had paper mills in their constituency knew, the paper industry was in decline. In recent years it has become a growth industry. That is because, previously, the industry was entirely dependent on imported raw materials--pulp. Now there has been massive new investment. More than £500 million has been invested in north Kent alone, protecting thousands of jobs and worth billions of pounds to UK Ltd. in terms of import saving. All that has happened because now we have our own indigenous raw material--recycled paper. There has been an industrial revolution, and it is quite an exciting story. It is estimated that the paper industry wants another 2 million tonnes a year to support further investment.
As well as that strong constituency interest, I must declare my interest as parliamentary adviser to the Paper Federation of Great Britain. I am also one of those who believe passionately in the need for the UK to achieve maximum recycling of waste materials--paper and board, glass, metal and plastics--as raw materials for further industrial production. By that I do not mean incineration in large-scale, expensive, subsidised waste-to-energy power stations.
With that belief I, like almost everyone else, warmly welcome the aim of the measure. It might therefore sound churlish to use this occasion to express serious concerns about the regulations. We have been told that we currently recover just over 2 million tonnes out of 8 million tonnes of packaging waste. The target is to raise that to almost 4 million tonnes in about three years. That is an ambitious target. We must find a way of using an additional 2 million tonnes of recycled waste materials. I agree entirely with my hon. Friend the Minister and with the hon. Member for Oldham, West that we had to avoid the system adopted by the Germans and the massive disruption caused to the market by the green point system. We had to avoid such a radical and sudden change in the system.
It was right to welcome the principles on which the Government embarked--to work with industry to develop a scheme for shared responsibility among all parts of the packaging chain. There should be no cross-subsidy between different packaging materials. The scheme was to be worked up co-operatively with industry. I pay tribute to the work done by the Secretary of State, and to many leaders of industry, who worked extremely hard over a period of years, giving up a massive amount of management time to produce the scheme.
However, I wonder whether all those who worked so hard envisaged the outcome--38 pages of mind-boggling regulations. I do not believe that that is what they had in mind. The Minister told us that 4,000 businesses must
comply this year. In 2000, 9,000 businesses will have to comply. A recent survey showed that two out of three businesses are not even aware that the new regulations will come into force. When those business men try to read the regulations, their eyes will not only glaze over, but be double-glazed over, because the regulations are extremely difficult.
Mr. Piers Merchant (Beckenham):
Schedule 4 charts the great amount of detailed data required from companies, including the type of packaging. Does my hon. Friend agree that that will put a heavy burden on many companies, and that, in many cases, the cost and complexity of gathering all that information will be greater than that of complying with the VAT regulations?
Sir Roger Moate:
I congratulate my hon. Friend on having got as far as schedule 4. As he said, not only are the regulations complex; they are costly. My hon. Friend the Minister referred to a cost of £270 million to £280 million. That is the lowest estimate that I have heard, and it does not surprise me that he should give us the lowest. We have heard other figures, between £300 million and £600 million, and up to £1 billion, as the compliance costs on British industry. Those costs will have to be met by British industry in a relatively short time, so we should not underestimate their seriousness. The scheme might be good value, and better value than other schemes, but we must understand that it will be introduced at great cost to British industry.
There was a meeting at the House in January with representatives of the British Fibreboard Packaging Association. Like me and everyone else, they support the aims of the measure. I quote their summary of the worries expressed by much of industry. They state:
We also had representations, again expressing widespread concern, from the Association of Convenience Stores, which represents the owners and managers of 11,000 retail shops around the country. They, too, are worried that the cost of the proposals will fall disproportionately on small grocery businesses. People will ask how small shops can handle 50 tonnes of packaging material, which will be the requirement in the year 2000, but it takes only a small volume of glass to reach that level, so a group of shops might well fall in that category. We must take care to tailor the regulations correctly.
Why have all those concerns suddenly arisen, when we have had years to work up the regulations? I think that it is because of the sheer difficulty of translating into reality the splendid idea of shared responsibility. It is easy for a superstore, with masses of cardboard boxes at the back door and bottle banks at the front door, to meet its 47 per cent. obligation. However, a producer of cardboard boxes, who has no waste left on his premises, can discharge his obligation only by paying out hard cash.
I think that I am right in saying that about half of the 8 million tonnes of packaging waste ends up with the retailer. That gives the retailer a disproportionate amount of power. It is therefore all the more important that retailers should play a part in the co-operative arrangements.
Part of the problem is that the costs arise because we do not have outlets for all the waste materials. They currently have no market value. We must ensure that industrial demand is created for those raw materials as soon as possible, which would place a higher price on the materials, reduce compliance costs and might then make the regulations unnecessary. In the meantime, we must ensure that they operate as intended. Bureaucracy should be kept to a minimum and everyone in the chain, including the major retailers, should co-operate to ensure that the system works. One estimate is that, under the present arrangements, the paper packaging industry alone would subsidise other packaging materials to the tune of £45 million a year. That cannot be fair.
"Our main ares of concern are the burdensome complexity of the Regulations; their high cost; the risk that they will distort historical trade patterns and put UK industry at a competitive disadvantage to its EU counterparts; and, most importantly, that they may even reduce rates of recovery and recycling rather than increase them . . . Specifically, the draft regulations now allow any business with packaging waste on its own premises to use that waste to meet its recovery obligation at a much reduced cost compared to those businesses which have no waste arising."
It is understandable that such organisations should be concerned, as 75 per cent. of the product that their members manufacture is already recycled.
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