PACKAGING AND PACKAGING WASTE
Letter from Brian Wilson MP, Minister
of State for Energy and Construction to the Chairman
Thank you for your letter of 6 November.
I apologise that you had only two working days
to consider my proposal to lift the UK Parliamentary Scrutiny
Reserve ahead of Environment Council on 17 October. The letter
should have been issued from my office a week before. You correctly
note that the European Parliament held their first reading on
2/3 September 2002. However, the Council did not consider these
proposals until 25 September 2002. The likely detail of the political
agreement for Common Position was not therefore clear until early
October. My department will be updating its partial Regulatory
Impact Assessment to take account of the political agreement.
I will send this to you under separate cover as soon as it has
Please find enclosed a copy of the Task Force
report referred to in paragraph 13 of the Government response.
This report is concerned with the spending of the revenue gained
from packaging Waste Recovery Notes (PRNs) and Packaging Waste
Export Recovery Notes (PERNs).
Please note, however, that this document is
still in draft and has not yet been finalised.
I will keep you fully informed of future developments
including any conciliation process and will write to you before
any final agreement is reached.
15 November 2002
Letter from the Chairman to Brian Wilson
Thank you for your letter dated 15 October which
Sub-Committee B considered, together with the accompanying Government
response, at its meeting on 4 November.
When we were in Brussels before the Summer Recess,
we were aware that the Presidency was attempting to secure political
agreement before the European Parliament's first reading. The
first reading took place on 2 and 3 September, so we were surprised
not to have heard earlier than your letter of 15 October of the
position you intended to take at the 17 October Environmental
We note that the basis for political agreement
at the 17 October Environment Council meets the important UK requirement
for the deadline to be postponed to 2008. We welcome this as well
as the overall ceiling on recovery and recycling and the fact
that a wider revision will not be incorporated with this document.
We think that the differentiated targets will be a problem, especially
for plastic, but accept that you have probably got as good a deal
as our European partners are likely to allow.
Nevertheless, it does look as though the differences
between the Council and the European Parliament are unlikely to
be resolved quickly and that the proposal will go forward for
conciliation, presumably after the Parliament's second reading.
We should, therefore, like to be kept fully
informed of the conciliation process, and would expect you to
report to us before a final agreement is reached between the Council
and the Parliament. We should also like to see a copy of the Task
Force report referred to in paragraph 13 of the Government response.
In the meantime, will your Department revise its regulatory impact
assessment to take account of the political agreement?
6 November 2002
Letter from Brian Wilson MP to the Chairman
As promised in my letter of 13 November 2002,
my department has now updated its partial Regulatory Impact Assessment
(RIA) to take account of the Council's agreed Common Position,
which we expect to be referred to the European Parliament during
March. I have pleasure in enclosing a copy of the partial RIA.
We now believe that the following broad timetable
will be likely to apply:
|March 2003||The Council will refer the Common Position to the European Parliament
|April/May 2003||Committee discussions
|September 2003||European Parliament 2nd reading vote
|December 2003||Conciliation (if needed) and final agreement under Italian Presidency
|January/February 2004||Publication in the Official Journel
|24 February 2003||
Letter from the Chairman to Brian Wilson MP
Thank you for your letter dated 28 February 2003 enclosing
an updated partial regulatory impact assessment (RIA) to take
account of the Council's agreed common position. This was considered
by Sub-Committee B at its meeting on 10 March.
We have already examined the possible costs for the UK industry
in our report Packaging and Packaging Waste: revised recovery
and recycling targets,
and have now noted the figures produced in the updated RIA.
We note that the original estimates for the overall costs
to industry for the period 2002-2006 have risen from a range of
£884 million-£1.15 billion and £1 billion-£1.2
billion (table 6 of our report) to £1.2 billion-£1.36
billion. The new figures demonstrate a narrowing of the range.
But given the way in which the costs are expected to rise, the
overall figures are not particularly helpful. What matters is
the annual costs to industry for each of the years up to an including
2006. We should like to see these figures on the assumption that
the increased targets will be met by the UK.
We should also be grateful to learn what estimate your Department
has made of the annual benefits expected to be achieved in each
of the years up to 2006.
Against this background, we cannot understand why the Government
has set the same targets for 2003 as those for 2002.
Clearly, what will concern industry would be an outcome that
tended towards the targets currently favoured by the European
Parliament with their much higher costs. We should therefore be
grateful for an updated RIA based on the European Parliament targets,
which gives annual figures for costs and benefits, as well as
the overall figures for the period 2002-2006, after the European
Parliament's Second Reading in September 2003.
12 March 2003
Letter from Brian Wilson MP to the Chairman
Thank you for your letter of 12 March, regarding packaging
and packaging waste.
I have noted your concern about the apparent rise in the
costs to industry from our original RA to the most recent one.
This is because the timeframe covered has been amended to reflect
the latest available information. The last partial RIA covered
the 2002-06 periodthe current estimate is for 2004-08.
The reason for this is the agreement in Council of a "Common
Position" which extends to 2008. The European Parliament
is still pushing for a 2006 date. This is still reflected in the
latest partial RIA.
In addition, data on the PRN market for 2001 and 2002 respectively
has been finalised and the Government has announced targets for
The cost estimates outlined in the new partial RIA show the
sum of costs over the relevant five year period for which the
new targets are proposed. They also show the annual average costs
and the costs in the final year.
The estimated annual costs for each year are not shown because
they depend on the target that will be set for each year and the
estimated PRN prices. Showing the former would imply that the
Government had already decided the targets for future years when
this is not the case.
The Table below presents the DTI's estimates of the annual
costs to industry of the proposed new Directive targets given
our estimates of future prices and targets in each of the years
up to 2008.
The benefits are very difficult to quantify, not only because
it is unclear at present what the future costs of landfill will
be to 2008, but also because the other benefits, such as energy
and virgin raw material savings, litter reduction, the stimulus
to innovation and awareness raising, are, by their nature, very
difficult to value in monetary terms.
The RIA points out that the estimates it presents can only
be seen as indicative. This is a complex area requiring estimates
of both benefits and costs five years out. The benefits themselves
are difficult to quantify because of the reasons outlined above.
The costs are also difficult to quantify, and it should not be
forgotten that a sizable number of PRNs are bought and sold via
individual contracting, the price and quantities of which are
commercially secure. This specific information is not available
to the DTI and we are obliged to make estimates on the basis of
the publicly available PRN prices on the open market.
Table 1: Estimates of annual costs to 2008 (£ million
You asked why the Government had not increased domestic targets
in 2003. The reason for this was that it was far from clear that
there was enough research to show that an increase in targets
was the best option, and it was unclear what the Directive targets
were going to be, or to what deadline they would have to be met.
I would be very happy to supply an updated RIA based on the
European Parliament's targets after their second reading in June
or July 2003.
8 April 2003
Letter from Chairman to Brian Wilson MP
Thank you for your letter dated 8 April 2003 which Sub-Committee
B considered at its meeting on 28 April 2003.
We are grateful for this explanation, though we remain to
be convinced about the true nature of costs involved in the implementation
of the draft Directive.
However, we accept that the critical period will be reached
when the European Parliament's targets are known for certain after
their Second Reading in June or July. We should be grateful to
receive an updated regulatory impact assessment (RIA) on that
occasion so that we can then compare the possible outcomes from
29 April 2003
33rd Report, Session 2001-2002, HL Paper 166. Back