Packaging and Packaging Waste

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However, I remember when voluntary organisations generated funds by collecting newspapers and selling them for recycling. I recently inquired why nobody does that any more. The answer is that the large amount of recycled packaging material in the system has so depressed waste paper prices that it is no longer economically attractive to recycle other forms of paper. Clearly, we would score an own goal if we established elaborate systems with high targets to ensure that we recycle ever-more cardboard packaging, only to discover that we have done so at the expense of other forms of reprocessable paper waste, which are no longer

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economic as a result. Some forms of recycling have direct environmental costs. They require additional transport, and energy is used for the transformation process, creating greenhouse gas emissions.

I am pushing at a door which is not ajar, but open, when I urge the Minister to ensure that the proposed recycling targets are set at a level that will create unambiguously positive net environmental benefits. The ratio of the benefits to the economic costs must be clearly positive, and those matters must be crystal clear and beyond doubt. Otherwise, public confidence in the drive to increase recycling and recovery will be shaken.

In that context, I am worried about the disquiet that has been expressed on the methodologies used to assess the costs and benefits. The Commission documents caution a wary approach to the costs and benefits, which is reflected in the Government's publications on the matter. It is clear in all the documents that those figures are extremely difficult to assess. Having said that, the issue between costs and benefits is presented as broadly neutral. Pushing for ever higher targets when the methodology underlying the analysis is clearly suspect and even the person promoting it appears to be claiming only that the costs are broadly in line with the benefits is perhaps a rather unusual direction for the Minister to take.

The test that we ought to apply is how, for a given financial cost, our environment can best be enhanced. The information that has been presented does not convince me that increasing the packaging recycling and recovery targets is the best use of the marginal few hundred million pounds that we are about to spend to protect our environment. Has the Minister conducted any cross-scheme analysis on whether that £400 million—it may be £500 million or £600 million—could be spent on ways of providing measurable benefits and protection of our environment greater than any achieved by the proposed increased targets for the packaging recycling scheme?

Dr. Stephen Ladyman (South Thanet): The hon. Gentleman and I began our parliamentary careers on a European Standing Committee, so it is not the first time that we have exchanged opinions. His speeches are no shorter, but I will forgive him on this occasion, because he is making a good deal of sense. Given the hon. Gentleman's comments about the uncertainty of the costs and the impact on industry, does he agree that it is important to ensure that the directive is enforced throughout the European Union in a way that does not create an unequal competitive impact in this country, compared with others?

Mr. Hammond: I agree entirely with the hon. Gentleman. He has raised a separate issue, which is also important. He may not have been in the Room earlier when hon. Members asked the Minister questions in order to ascertain how certain we in the United Kingdom are that the range of targets set by the Commission is appropriate. The Minister was also asked what mechanisms are in place to ensure

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that the right targets are chosen for each domestic economy and that each carries a similar share of the burden.

A further point that seems important is the extent to which the proposed change takes us over the threshold to a different part of the cost curve so that we have to tap a higher proportion of the household waste stream in order to meet the new target. That is the crux of the matter, and it is not a question that I, or maybe even the Minister, can answer. However, it must be analysed in detail before deciding whether the target range is correct and what the United Kingdom's individual target should be. The general thrust of what I and others have said is that we must not allow ourselves to move into a part of the cost-benefit curve that is neither justifiable nor sustainable to public opinion. I fear that we are moving toward that, and we may find that we are required to set up elaborate household collection and separation systems to reach the marginal few per cent. in order to meet the targets. That would have significant marginal cost implications. I have not seen anything in the published documents to suggest that the matter has been analysed in sufficient detail.

I was stunned by what the hon. Member for South Thanet said about the length of my speeches. Of course, the occasion to which he referred was before routine timetables when Opposition Members on Standing Committees needed to learn to speak at great length from the scantiest of materials. Indeed you, Mr. Atkinson, will remember such delightful times as those spent on the Committee that considered the National Minimum Wage Bill. However, as I was so stunned by what the hon. Gentleman said, I shall draw my remarks to a speedy conclusion.

I ask the Minister to urge his right hon. Friend the Minister for the Environment to press vigorously for the delay that is wanted universally by industry in this country and by many other member states, and to resist the material-specific targets that will be imposed in view of the questionable methodology that the European Commission adduced in support of them. I ask the Minister for the Environment to ensure that the directive allows us to maintain maximum flexibility in interim targets before we reach the targets that are ultimately set for 2006 and 2008, and to maintain the market-based system for the pricing of recycling obligations. Most importantly, I ask the Minister for the Environment to ensure that the UK makes it clear that we insist on retaining the right to exclude permanently small and medium enterprises from the scope of the scheme.

I know that the Minister for Industry and Energy said that that is not included in the current directive and that it is, therefore, a matter for the UK. I accept that there is no immediate likelihood of the UK Government choosing to remove the derogation for small and medium enterprises. However, the next set of draft directives might include moves by the

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European Commission to prevent the exemptions for small and medium enterprises that the Government have put in place. We must resist that strongly.

We share an objective of wanting to ensure that all environmental policy is soundly based and proportionate in terms of costs imposed and benefits delivered. We want to ensure that the policy genuinely produces significant environmental benefits rather than being merely based on gesture politics that respond to specific agendas from environmental pressure groups in the European Union. I believe that if we approach the measures in a proportionate and measured way, we will slowly build public support for recycling and recovery as a reasonable cost approach to a real problem. There is a degree of fragility to the consensus of public opinion—the American example is a good one. We will lose public support if we appear to impose unnecessary or disproportionate costs to achieve marginal, unquantified or unmeasurable environmental benefits.

5.55 pm

Richard Younger-Ross: I shall try to be brief. The debate has been useful, but it is a shame, because this is a cross-departmental debate and we cannot get answers to some of the questions that we would have liked to ask. It is the implementation that is crucial to so many of the issues debated by the Committee and which has the greatest impact on British industry, not the targets. The targets may be laudable, but their implementation and the civil service's interpretation of them will determine whether we are put at a disadvantage compared with our competitors.

The hon. Member for Runnymede and Weybridge is right to say that there are difficulties in relation to public perception and a possible public resistance to some of the targets. I hope that the Minister will agree that there is a need for Government investment in an education programme about the need for recycling. It is important that people understand that the planet has only finite resources. We cannot keep digging holes to get stuff out of the ground and then dig more holes to put stuff in.

A large landfill site in my constituency has recently become a local problem. Unpleasant smells were generated after heavy rains and many people in neighbouring villages were very upset. We must get away from such a method of disposal. I hope that the directive will help us to reduce the amount of landfill and get us back to more productive means of waste disposal. In that sense, it should be welcomed. We should see the directive not in the context of those who favour or are opposed to Europe, but as part of the international agreements such as Kyoto that try to limit environmental damage.

A delegation from the European Parliament recently visited the landfill site at Heathfield to examine the environmental impact of foot and mouth, because some culled sheep were disposed of at the site. The Danish delegate was horrified that the

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site was so large—over so many acres—and to see so much waste being put into the ground. His comments clearly suggested, "We would not do this in our country." It is a great shame that Britain has lagged behind in recycling for so many years. It is an indictment on previous Governments that they did not take recycling or environmental policies sufficiently seriously.

The fact that we lag so far behind and that we are catching up with our main competitors means that most of what we discuss will have little competitive impact on British industry. However, it is important that the costs to UK businesses are not disproportionate to those faced in other countries. I appreciate that the Minister said that he would write to me about the comparative costs. I hope that he will tell his Department and DEFRA—when it comes to implementation—that costs must not be greater for UK businesses than for our competitors and the methodology must not be more complicated. The civil service should consider a red tape audit when implementing European legislation and compare the bureaucracy of our competitors.

Mr. Hammond: The hon. Gentleman makes a good point, but would he acknowledge that our competitors are not only European Union countries, but include countries outside the EU, which do not have to comply with this type of regulation?

Richard Younger-Ross: I take the hon. Gentleman's point, but that is all the more reason for international agreements such as Kyoto. The majority of our trade in that sort of packaging is with Europe, and the competitive edge for most of our businesses is in Europe, too.

If the proposals are to work, there must be cultural change and education on the subject, as I have said. We cannot make changes unless our local authorities are given the assistance and motivation to do so. It is no good for the Government to set targets and send them down to our county councils, saying "You must meet this target," when county councillors are struggling to ensure that they have bed places for elderly people, homes and support for children and enough social workers. Those matters have a high impact on counties, which consider environmental issues to be on the margins. The Departments should ensure that county councils have the cash and incentives to comply. If that means setting specific budgets for capital projects, I hope that the Departments will do that.

6.1 pm

Mr. Jack: May I first put on record my thanks to the Minister's parliamentary clerk, who made available in good time a comprehensive and well laid-out briefing for the debate? That is much appreciated, because in the past we have not always had briefing in sufficient time to read and understand it, let alone to receive other valuable opinions about the proposals to which it refers. Secondly, I apologise

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to the Committee and to you, Mr. Atkinson, for my enthusiasm for fridges. Having consulted and re-examined annex 1 of the regulation, I find that refrigerators are certainly not in the packaging items listed to help us to define what is covered and what is not.

It is intriguing to look at the detail in annex 1 and find out how tricky the issue is. Obvious things such as paper and packaging on a retail product are included, but chip forks are not. I foresee great practical difficulties in implementing the proposals if we are to go into the nitty-gritty of what is included and what is not. That perhaps illustrates the complexity of the matter. I am glad that the Minister has taken a practical and pragmatic approach. Hon. Members have outlined important points on matters on which the Minister will be involved in negotiations.

I have had consultations with the trade, particularly Valpak, which makes it clear that an early resolution of the targets would be helpful, and that attention should be paid to local authority waste schemes. Valpak kindly provided me with some information that illustrates the variation across the United Kingdom in the effectiveness of the methods of dealing with waste that will play an ever-increasing role in meeting more exacting targets.

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Prepared Wednesday 15 May 2002