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Session 2005 - 06
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Standing Committee Debates

Draft Producer Responsibility Obligations (Packaging Waste) Regulations 2005




 
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Second Standing Committee on Delegated Legislation

The Committee consisted of the following Members:

Chairman:

Sir John Butterfill

†Atkinson, Mr. Peter (Hexham) (Con)
Baker, Norman (Lewes) (LD)
†Bradshaw, Mr. Ben (Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs)
†Clarke, Mr. Tom (Coatbridge, Chryston and Bellshill) (Lab)
Connarty, Michael (Linlithgow and East Falkirk) (Lab)
†Cunningham, Tony (Workington) (Lab)
†Duddridge, James (Rochford and Southend, East) (Con)
†Foster, Michael Jabez (Hastings and Rye) (Lab)
†Jack, Mr. Michael (Fylde) (Con)
†Kidney, Mr. David (Stafford) (Lab)
Mundell, David (Dumfriesshire, Clydesdale and Tweeddale) (Con)
†Rogerson, Mr. Dan (North Cornwall) (LD)
†Ruddock, Joan (Lewisham, Deptford) (Lab)
Salter, Martin (Reading, West) (Lab)
†Stoate, Dr. Howard (Dartford) (Lab)
†Walley, Joan (Stoke-on-Trent, North) (Lab)
†Wiggin, Bill (Leominster) (Con)
Sîan Jones, Mark Oxborough, Committee Clerks
† attended the Committee


 
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Monday 12 December 2005

[Sir John Butterfill in the Chair]

Draft Producer Responsibility Obligations (Packaging Waste) Regulations 2005

4.30 pm

The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw): I beg to move,

    That the Committee has considered the draft Producer Responsibility Obligations (Packaging Waste) Regulations 2005.

The regulations set business recovery and recycling targets for packaging waste for 2006–10. The targets are intended to enable the United Kingdom to meet its obligations under the EC directive on packaging and packaging waste by the end of 2008. The regulations consolidate the original 1997 regulations with the amendments made in subsequent years, in order to make the regulations easier to understand and more accessible to businesses affected by them. They also make other changes to the existing legislation, which are designed to increase the amount of packaging that is subject to obligations. That will allow the recovery and recycling targets to be lower than they might otherwise have been, and keep the compliance costs of businesses as low as possible.

In addition to the consolidation of the original regulations and subsequent amendments, the regulations contain provisions intended to reduce the burden on smaller businesses by giving them the option of having their recycling obligation allocated to them, rather than having to collate data, complete a data form, and calculate their own recovery and recycling obligations. That allocation option is expected to reduce not only the administrative burden on smaller businesses, but their costs.

The Government have also changed the basis for requiring an operational plan to be submitted by individually-registering businesses. That means that only businesses handling 500 tonnes or more per year will need to comply with the requirement. That will still allow the regulators and the Government to scrutinise the most relevant business plans, and to ensure that those with the most significant obligations are planning ahead for compliance. Subject to the approval of the Committee and of the other place, the regulations are intended to come into effect on 1 January 2006.

Since the producer responsibility regulations came into force in 1997, the UK’s packaging waste recovery rate has risen by 25 percentage points—from 30 to 55 per cent. by the end of 2004. The recycling rate has also risen significantly, to 50 per cent. from about 27 per cent. in 1997. That is an excellent achievement by the businesses concerned.


 
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However, recycling of packaging waste must increase further if the UK is to meet its directive targets in 2008 of 60 per cent. recovery, including 55 per cent. recycling, and minimum recycling levels for each material. Increased packaging waste recycling will also help us to achieve the challenging recycling objectives set out in the Government’s wider waste strategy.

Increased recycling is also beneficial from the broader resource efficiency perspective. For example, glass recycling achieves more than just the reuse of the materials. The energy saved by recycling one glass bottle will power a computer for 25 minutes—or a television for 20 minutes, or a washing machine for 10 minutes—thus contributing to our climate change objectives.

Before finalising these proposals, the Government undertook two major consultation exercises and sought views on their proposals. Those include placing obligations on businesses that lease out packaging such as pallets, and on those that have franchise and similar licensing business arrangements.

The targets we are proposing for 2006–10, together with the other changes to the system, will allow the Government to be more confident that the UK can meet the next directive targets in 2008, and do so without placing undue burdens on business. We also believe that the resulting increases in packaging waste recovery and recycling will make an important contribution to the achievement of the UK waste strategy and the sustainable development of our economy. I commend the regulations to the Committee.

4.34 pm

Bill Wiggin (Leominster) (Con): It is a pleasure to serve under your chairmanship, Sir John.

In principle, I acknowledge and agree with the “polluter pays” principle, and I acknowledge that these regulations will continue to encourage Britain’s producers with turnovers exceeding £2 million and that handle packaging exceeding 50 tonnes to recycle their waste.

My understanding is that about 50,000 companies in England and Wales are affected by the regulations. How much waste has been diverted as a result of the existing regulations, and how will that change under the new ones? Having read through the 1997 version of the regulations, I notice that there has been a change in the percentages prescribed for the various producer classes, as laid down in schedule 2 for the calculation of recovery and recycling obligations. Under the 1997 version, the percentages for the class of producer were as follows: 6 per cent. for manufacturers; 11 per cent. for convertors; 36 per cent. for packers and fillers; 47 per cent for sellers and wholesalers; and 83 per cent. for secondary providers.

Under the 2005 regulations, the percentages have changed to 6 per cent. for manufacturers; 9 per cent. for convertors; 37 per cent. for packers and fillers; 48 per cent. for sellers; and 85 per cent. for secondary providers and service providers. I am curious to know why the changes have taken place and why the percentage for convertors has fallen from
 
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11 to 9 per cent. Moreover, after eight years, has the Minister considered pushing the percentages up higher, to ensure that, given the tide of technological developments, more packaging waste is recycled?

I accept that recycling targets are regularly changed, but I am nevertheless concerned that the changes prescribed in paragraphs 5 and 6 of schedule 2 are lower than those made just two years ago in statutory instrument No. 3294, the Producer Responsibility Obligations (Packaging Waste) (Amendment) (England) Regulations 2003.

The recovery target, known for calculation purposes as X, has been downgraded for 2006, 2007 and 2008 from 67, 69 and 70 per cent. to, in these regulations, 66, 67 and 68 per cent. I would be grateful if the Minister explained why the 2008 recovery target is 2 per cent. lower in these regulations than in the 2003 ones.

I am delighted that the recycling target for glass has increased for 2006, 2007 and 2008 on those prescribed in the 2003 regulations. The Minister should explain to the Committee why the targets for aluminium, steel, paper/board, plastic and wood have all been downgraded. For example, the recycling target for steel was 61.5 per cent. by 2008 under the 2003 amendments to the original 1997 regulations, but it has fallen to 58.5 per cent.

One purpose of these regulations is to update our domestic targets to conform with changes to the targets in the packaging waste directive. Although I am pleased that the planned recycling targets outlined in schedule 2 exceed the minimum specified in the directive, does the Minister share my concern that our targets for aluminium will be below the minimum 55 per cent. for metals? I am also disappointed that the projected rate of increase—from 29 per cent. in 2006 to 33.5 per cent. in 2010—does not put us on track to achieve our directive target.

On producer registrations, will the Minister inform us of the safeguards that are in place to prevent possible costly bureaucratic errors? He will be aware that regulation 7(3)(e) provides that if an application to register has been refused, a producer has 28 days to reapply. Given the bureaucratic difficulties that people sometimes get into, will he cast a glance over what bureaucratic safeguards need to be provided?

I would also be grateful if the Minister told us how the fees compare with those charged for similar registrations in other EU member states. Are they harmonised across the EU or determined by individual member states?

Further aspects relating to fees require some clarification. Regulation 16(5) provides that when applications for schemes need to be resubmitted for failing to meet the necessary requirements, an additional fee of £220 is chargeable for each scheme member. I presume—I am sure the Minister will correct me if I am wrong—that there would be further administration costs for handling a resubmitted form. Producers would like to be reassured that no excess revenue will be raised through the fees from resubmission.


 
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Furthermore, I notice that the formula for calculating the additional fee for changes in scheme membership has changed from the original 1997 version. As I am sure the Minister is aware, regulation 15(2) of the 1997 regulations provides that such a fee is calculated by the formula A multiplied by B to get the additional fee known as AF. Hon. Members will all be familiar with this. However, under regulation 16(6), the formula for the additional fee calculation is different. There are also additional sums of money added. I am sure he wants to explain why that is the case. Will he tell us what extra revenue the changes will bring in?

Regulation 7 is clear that producers must register with the appropriate agency by 7 April in a relevant year. Although the application forms are provided free, given the complexities associated with compiling the necessary information—especially for those registering for the first time—will the Minister detail the practical measures, if any, that an appropriate agency offers to help with that registration?

Regulation 8 stipulates that, under the conditions of registration, packaging waste producers must provide to the appropriate agency a revised version of the operational plan by 31 January. I am sure the Minister wants to reassure the Committee about the practical assistance on the drafting of those plans offered by his Department or the appropriate agencies. I note that, in England, 21 schemes are registered with the Environment Agency national waste registration unit, and I am curious to know whether he expects those revised regulations to lead to an increase or decrease in the number of schemes.

In addition, given the benefits offered for joining such schemes, especially for small producers, I would like to know whether the Minister has considered measures to promote smaller voluntary schemes at local level.

Part V deals with the accreditation of reprocessors and exporters. Considering the findings of the BBC investigation televised last week, will the Minister let us know what his Department is doing to ensure that packaging waste exported for recycling is recycled and not sent to landfill in Indonesia?

The final aspect to which I would like to draw the Committee’s attention relates to the penalties for contravening the requirements of the regulations. When a scheme operator has been found guilty of an offence, it has an obligation to make a further application for approval. Regulation 13(3) states that the operator has 28 days to do that. However, it is unclear whether the operator needs to meet that requirement if it appeals against the summary conviction. In addition, despite there being provisions to cancel and suspend schemes and producers, there are none to ban producers or those running schemes if they have acted in contravention of the regulations. Should there be a measure to deter persistent offenders? Perhaps incorporating banning provisions into the regulations would improve them.

I hope that the Minister can answer my questions. Those apart, I think this is a helpful statutory instrument.


 
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4.42 pm

Mr. Dan Rogerson (North Cornwall) (LD): I, too, am delighted to serve under your chairmanship for the first time, Sir John.

Obviously, my party welcomes any action to tighten up regulations and increase moves to ensure greater reuse of materials or, when that is impossible, greater recycling. However, we are always keen on regulations that not only demonstrate the link between waste and producer action, but increase the pressure to redesign materials to minimise the need to reuse and recycle.

I have a few questions for the Minister about the regulations. First, will any extra responsibilities be placed on the appropriate agencies by them? Given the operation of the scheme until now, how do the appropriate agencies perform against targets for dealing with applications for registration? Does he expect many schemes to be discontinued? Provision is made for that in the regulations. What provision is there for assisting producers that are members of such a scheme? If a scheme fails, is there any advice to be offered in its absence?

Is the administration of the scheme by appropriate agencies to be self-financing, given the charges that schemes and producers will have to pay? If that is the intention, I should say that under other statutory instruments the Government have had to come back and ask for charges to be increased, because the relevant schemes have proved not to be self-financing. I seek reassurances that robust predictions have been made.

What was the basis for the formula for determining how small a company or producer needs to be to take advantage of the allocation, as opposed to being part of the scheme for bigger producers?

I, too, share the worries of hon. Members that we must ensure that better monitoring takes place, so that examples such as that cited by the hon. Member for Leominster (Bill Wiggin) of waste being exported for landfill do not happen. I hope that the Minister will take measures to ensure that the appropriate agencies can cope with such a responsibility. I regret that I do not have great experience of the Scottish Environment Protection Agency, but the Environment Agency has a huge brief on flood protection and other issues. I hope that provision will be made for the agency’s funding programme so that it can carry out that vital work.

I look forward to hearing the Minister’s response to the hon. Member for Leominster, and hope that he deals with my concerns, too.

4.46 pm

Michael Jabez Foster (Hastings and Rye) (Lab): Clearly, the Minister’s comments about the impressive recycling are to be welcomed. As with all such matters, prevention is better than cure. Can he explain what measures are in place—either within the statutory instrument or otherwise—to do more to prevent the unnecessary use of items or materials?


 
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Wandering around Toys R Us and other such establishments, shopping for grandchildren at Christmastime, the enormous waste and cost that are added to goods by unnecessary packaging have come to my notice. Clearly, as the Minister properly said, we must not add unnecessary costs to producers, but producers are adding unnecessary cost to themselves, and in turn to the consumer, by creating monstrosities of packaging for what are often small items. I would be grateful if said whether the regulations have any role to play there.

The Minister also said that he wants to ensure that the penalties for breach of any proposals in respect of producers are fair and reasonable, not overbearing. I agree, but would it not be better to look at the other end and consider tax incentives, or tax obligations, for producers who add wasteful and unnecessary cost to their products by overburdening us all with such packaging?

I am not clear on how the regulations will impact on importers. Do they cover producers who import goods with massive packaging? Are those people under an obligation? I am conscious, in particular, of China. Many toys—especially at this time of year—come from that country and involve massive packaging. I do not know how much it costs to bring all that stuff across, unless the items are packaged here—as a result of which a producer would presumably be responsible. I would be interested to know whether goods imported from outside the EU are covered by the regulations in respect of a producer. If not, what is to be done about that position?

4.48 pm

Mr. Peter Atkinson (Hexham) (Con): In general, I also welcome the regulations. As the result of my detailed reading the explanatory memorandum, I know that it refers to the inclusion of fast-food outlets and tenanted pub chains. Will the Minister explain more about that? I accept that big fast-food outlets will be the main six operators in this country, but what about tenanted pubs? Will there be a de minimis level for companies that own one or two pubs? Will tenanted pubs be responsible for recycling all glass and packaging? There is some doubt about that under the regulations, which refer to products that bear a trade mark. Can he enlighten us on that? Clearly, fast-food outlets are one of the major sources of pollution in many town centres.

4.50 pm

Mr. Michael Jack (Fylde) (Con): It is a pleasure to be under your chairmanship today, Sir John.

I congratulate my hon. Friend the Member for Leominster on his incisive and detailed probing of the Minister on the many points raised by the regulations. I would like to ask the Minister—as much for the purposes of education as anything else—about the new recycling targets referred to in annex 2 of the explanatory memorandum. In particular, I would like him to focus on plastics and wood.


 
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The import of the regulations is that those seeking to recycle those substances must obtain the necessary paperwork to show that they have recycled. The implication is that the use of plastics, and particularly wood, in the incineration processes associated with energy generation do not appear to count as far as the regulations are concerned.

The Minister will be aware that there is enormous energy potential locked up in wood. Will he say a word or two about whether the regulations will assist in liberating the energy potential in wood and plastics in a safe and environmentally acceptable way that will improve markedly the recyclability of those substances? If someone had wooden substances that could be used in the production of bioethanol, would such a use of surplus meet the requirements of the regulations?

4.51 pm

Mr. Bradshaw: Quite a lot of questions have been asked. I apologise to hon. Members in advance if I forget some of them; I promise to write to Members about any that I miss out.

The hon. Member for Leominster, who speaks for the official Opposition, asked about the figures. He wants an absolute figure; in my opening remarks, I included the percentages by which recovery and recycling rates have improved—they have gone up from 30 per cent. in 1997 to 55 per cent. in 2004. The absolute figures that I can give him measure the period from 1998 to last year, when there was an increase of 2.3 million tonnes diverted from landfill. That is quite some achievement. As I said earlier, we expect that trend to continue.

One reason why the targets have been altered for some materials is that, as time goes on, we get better information on what is in the waste stream. To take account of that, the targets for different materials have had to be adjusted to a realistic but challenging level. That is one reason why the targets for glass and plastics have gone up. We discovered that there are a lot more glass and plastics in the waste stream than we previously thought—there has been an increase, anyway—but the levels of all the other materials have stayed the same or gone down.

As to why changes were made to some types of business to which the regulations apply, the changes were made in earlier statutory instruments. They are not being made this year. The change was made for convertors because they expressed concern about bearing too great a burden. Other producers agreed that their percentages should increase—the percentage increased for both sellers and fillers by one point—and that is why we felt it legitimate to reduce the burden on convertors to 9 per cent.

The hon. Gentleman also asked about fees. I am advised that fees are not harmonised across member states, but our fees are among the lowest, if not the lowest, in the EU. They are about cost recovery; that is what fee-setting aims to achieve.

The hon. Gentleman raised the concern, expressed recently in the media and elsewhere, about illegal exports of waste, mainly to developing countries. That
 
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applies much more to the domestic waste stream than to commercial packaging waste, but we are reviewing it. He will be aware that if an exporter wishes to export packaging waste and issue a packaging waste export recovery note, it must first be accredited by the Environment Agency.

We are satisfied that the situation is well policed, but as the hon. Gentleman will know, the Environment Agency is investigating the matter more intensely because of the concerns that have been raised. There is a legitimate market, across the world, for waste, as long as things are done according to the rules. There is huge demand among some rapidly growing economies—India and China, in particular—for some waste materials that we produce.

Some targets have been changed because we have extended the groups to which these regulations apply to include licensees, franchisers and so forth. That expansion has meant that it has been possible to reduce somewhat the overall targets for everybody else, thereby easing the burden on most people but putting a new burden on some. We hope that the targets, which seem to command cross-party support, will be seen as easing bureaucracy. We have tried to make the system a lot simpler.

The hon. Gentleman raised the question of penalties, in particular if a scheme is prosecuted, and the system for reapproval. Reapproval is required by the Secretary of State. If the Secretary of State decides not to approve, that particular company is not allowed to take part in the scheme. There have been between 100 and 200 prosecutions since the scheme was introduced. Admittedly, the penalties are not always as high as we would like, although they are a matter for the courts. However, it is important that the message goes out that it is not acceptable for companies simply to ignore their obligations and assume that it will be cheaper to break the law and just pay a fine.

We are not aware of any difficulties that the agency has noted on the performance of the registration scheme. If a scheme fails, the regulations it make clear that the producer must comply on his own or join another scheme. The Department or the Environment Agency are happy to issue any advice that may be helpful to producers in the first place.

My hon. Friend the Member for Hastings and Rye (Mr. Foster) raised the issue of waste minimisation. It is an important issue that is dear to all our hearts, and these regulations are an import element in minimising waste. Companies to which they apply have a huge incentive to reduce the amount of waste that they produce, because that costs them less. They are not the only regulations that exist to help minimise waste; the 2003 regulations drive minimisation. They require packaging to be the minimum and they are enforced by trading standards officers.

I recommend to hon. Members that, if they get letters, as I do, from constituents complaining about unnecessary packaging, they write back, or they can write to me and I can outline what regulations are already in place. A lot of people do not realise what
 
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regulations are in place and that they can complain to their local trading standards officer if they find something in a shop that is overpackaged.

As my hon. Friend said, this is a particular issue in the run-up to Christmas. He will be pleased to know that DEFRA will launch a campaign to minimise the waste produced at Christmas, in terms of packaging and food that gets thrown away. There is an enormous amount of waste and a lot can be done by consumers, who can use existing powers to send the message back to retailers and others that such levels of packaging are not acceptable.

My hon. Friend asked whether importers are covered by these regulations, and I can tell him that they are.

James Duddridge (Rochford and Southend, East) (Con): Is the Minister including plastic bags in the legislation? In particular, internet suppliers of groceries often use plastic bags as a secondary method of packaging products.

Mr. Bradshaw: All materials are included within this legislation. The hon. Gentleman may be aware that we are reviewing the experience of the Republic of Ireland, which recently introduced a plastic bag tax, to see whether that makes sense environmentally. The jury is still out on that matter. The Scottish Executive have recently looked at the same issue. I am straying from the statutory instrument, but the Scots have decided to delay or push the issue back, because the evidence is not conclusive that that is a sensible thing to do environmentally.

Joan Walley (Stoke-on-Trent, North) (Lab): On that point, will my hon. Friend tell the Committee whether the review that he just referred to is being done by DEFRA, jointly by DEFRA and the Treasury, or wholly by the Treasury, as I believe it was the last time such a thing was discussed?

Mr. Bradshaw: The review has not yet reached the Treasury, but taxation matters are always eventually for the Treasury. The Department’s job is to try to make an honest and scientifically-based assessment of
 
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whether such a measure is a good idea. I simply add a line about the balance of opinion. There are plenty of advocates for a plastic bag tax, but those who are slightly more sceptical argue that it would result in a diversion to other types of bag, particularly paper bags, which are heavier and more expensive to produce, and which would not make much difference in terms of the overall environmental benefit. The debate is like the one we had on nappies.

The Chairman: Order. We are beginning to get a little wide of the subject under discussion.

Mr. Bradshaw: I am grateful to you, Sir John. I am always keen on having an early cup of tea on these occasions.

I believe that I have dealt with the issues raised by my hon. Friend the Member for Hastings and Rye. On the question from the hon. Member for Hexham (Mr. Atkinson), a significant change in the regulations is that they will be extended to franchisers and licensees. The businesses to which he referred will be included. Such companies will be responsible if their turnover is above the required limit and if they produce the required tonnage of rubbish.

Finally, the right hon. Member for Fylde (Mr. Jack) asked about the potential for energy generation. He may have noticed in the figures that the difference between the recycling and recovery targets is 5 per cent. That is because we recognise the potential for energy recovery from some of the materials. I hope that energy recovery will form a major part of the waste review that the Department is undertaking. I shall write to him with a specific answer to his question.

Mr. Rogerson: I am grateful to the Minister for his responses and wish him well with his cup of tea. I should have mentioned earlier that I am a member of the all-party group on the packaging manufacturing industry.

Question put and agreed to.

Resolved,

    That the Committee has considered the draft Producer Responsibility Obligations (Packaging Waste) Regulations 2005.

Committee rose at three minutes past Five o’clock.

 
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