Single Use Carrier Bags Charges (England) Order 2015
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Lord De Mauley
That the Grand Committee do consider the Single Use Carrier Bags Charges (England) Order 2015
Relevant documents: 21st Report from the Joint Committee on Statutory Instruments, 23rd Report from the Secondary Legislation Scrutiny Committee.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)
My Lords, Schedule 6 to the Climate Change Act 2008 enables Ministers to make an order to bring in charges for single-use carrier bags. I shall explain the main elements of the charge but, first, I should like to remind the Committee why the Government are legislating for a modest charge on single-use plastic carrier bags.
We are committed to reducing the number of these bags in distribution. This will in turn reduce the environmental impacts of the production of these oil-based products. It will also reduce the impact of plastic bags at the end of their lives, particularly on the visual environment and wildlife when they are littered. Similar charges in other countries have demonstrated how effective this simple measure can be. Customers are encouraged to reuse their bags, rather than incur the charge. When bags are charged for, we expect the profits to be directed to good causes.
There are currently too many single-use bags being needlessly distributed. Efforts to reduce the number of single-use plastic bags without resorting to legislation have led to a good deal of success in the past. Such voluntary initiatives by retailers saw a reduction in the distribution of single-use plastic bags by 48% between 2006 and 2009. This was significant progress, but the number of single-use plastic bags given out is on the rise. In England between 2010 and 2013, there was an increase of 18%, which is just over 1 billion bags. In 2013 alone, England’s main supermarket chains issued more than 7 billion single-use carrier bags to their customers. As we all know, far too many of these bags made their way on to the streets and into the countryside as unsightly litter. They were also discarded on beaches and in the sea, where they can cause harm to wildlife.
Plastic bags also have a negative impact on the environment through their production and disposal. The oil that is used in their creation and the tonnes of plastic that go to landfill mean that we must take action to reduce the use of plastic bags. Where they are used, these bags should be reused as often as possible and then recycled.
The Environmental Audit Committee’s report on plastic bags last year was carefully studied by the Government. There may be some details of the scheme on which we agree to disagree, but we are all in agreement that reducing bag use has real environmental benefits. It will mean lower carbon emissions, more efficient use of valuable resources and less litter.
The order introduces a requirement to charge for single-use plastic bags. There has been a largely positive response to the announcement of the charge, which is a proven tool. In its first year, the Welsh charge resulted in a decrease of 76% in the number of single-use plastic bags distributed by the seven big supermarkets. We have been able to use the experience from the Welsh charge to help shape our scheme. A similar charge was introduced in Scotland last October. The English charge will commence in October 2015. It will require retailers to charge a minimum of 5p for every new single-use plastic carrier bag—the same as in Wales and Scotland. Bags used for deliveries will incur the charge, as well as those used to carry purchases away from a store.
Small and medium-sized businesses will be exempt from the charge in England. We recognise that some wanted SMEs included but we concluded that we need to avoid administrative burdens on start-up and growing businesses in England at a time when we want to support new growth in our economy. It is also worth bearing in mind that the current UK retail market is dominated by a comparatively small number of large stores with over 500 employees, employing 65% of people working in retail with 69% of all annual turnover of retail businesses. Any retailer that is not covered by the legislation will of course be able to charge for bags voluntarily.
As in Wales and Scotland, we hope—indeed, expect—retailers will give the proceeds of the charge to good causes. The Climate Change Act does not give the Government the powers to determine what retailers do with the proceeds of the charge. However, we will require them to report to the Government the number of bags they give out, the amount raised by the charge and what they do with the proceeds. We will then make this information public and expect that pressure from customers will ensure that the net proceeds—once reasonable costs have been deducted—go to good causes. Many of the large retailers have already stated that they will be giving the proceeds to charities or community groups and will publish details on their websites.
It would, of course, be fitting if some environmental causes were to benefit from the charge in England. In Wales, charities such as the RSPB, Keep Wales Tidy and Save the Children have benefited from the proceeds of the Welsh charge. Keep Wales Tidy has used the funding to support a Routes to School project, which aims to address litter problems on school routes by engaging and educating children and their families. It is not only charities that stand to gain from the charge. When littered, carrier bags cost taxpayers in England about £10 million every year in clean-up costs.
Of course, there will always be a need for some plastic bags. People may forget their reusable bags, or they may require a new bag—for example, to avoid contamination if they are buying raw meat. At the same time, we should aim to reduce the visual impact and harm to wildlife if these bags were littered.
A bag that biodegrades into harmless products is clearly desirable. That is why we are working with industry and academic experts to review existing standards and will report to Parliament before the charge comes into force on 5 October 2015. The report will state whether it appears that there is an existing industry standard or standards appropriate for excluding biodegradable bags and, if so, how that exclusion is to be implemented. We are keenly aware that the success of a biodegradable bag will also depend on more sophisticated ways of separating plastic waste. We need to ensure that the quality of recycled plastic does not suffer as a result of contamination with biodegradable bags.
We are focusing the charge on plastic bags as part of a targeted and proportionate approach to this issue. Plastic carrier bags take the longest to degrade in the natural environment, can harm wildlife and are extremely visible when littered in our towns, parks and the countryside. Paper bags make up less than 0.1% of carrier bags distributed in the UK by the seven major supermarkets and can biodegrade naturally in the open air. Of course, paper bags should still be reused a number of times before being recycled and should never be littered.
There are a few specific circumstances described in the legislation in which bags will not incur the charge. These include, for example: bags used solely to carry uncooked meat or unwrapped food and goods contaminated by soil, where there would be issues with food safety from contamination; bags for prescription medicines, where pharmacists have an obligation to protect the privacy of patients; and reusable bags for life. Purchases made on board planes and boats and in airports will also not incur a charge as it would be unreasonable to expect people to be carrying reusable bags in those transit places. The charge will be enforced by local authority trading standards officers. It will be light-touch, pragmatic and complaints-led. We are funding training for local authority officers.
A full assessment of the costs and benefits has been carried out. The total net impact of the scheme over 10 years is calculated to be a positive benefit of more than £780 million. That figure includes savings from reduced costs associated with littering and carbon dioxide-equivalent emissions.
Although consumers may incur an initial cost in purchasing reusable bags, these are designed to be reused many times and the supermarkets will replace them for free. Although single-use bags will now cost 5p, anyone who wants to avoid paying the charge will be able to do so by taking their own reusable bags to the shops. We encourage people to do this.
We expect that there will be an increase in sales of bin bags, as there was in Wales, as people currently often reuse single-use plastic bags to line their bins. However, even when this is taken into account, the impact of the charge in Wales has been a dramatic overall reduction in the amount of plastic used. We anticipate that the charge will reduce plastic bag distribution in supermarkets by between 70% and 80%, and overall in England by between 50% and 60%.
The order includes a review of the legislation to be carried out within five years of the charge coming into force. It will be at that stage that the reporting requirement will prove essential in assessing the effectiveness of the charge. Any changes to the legislation could also be considered at that time.
We are pleased that the European Union has reached agreement on a robust plan for tackling the blight of plastic bag pollution, with each member state doing what works best in its own circumstances.
In summary, the Government consider that the approach set out in the order provides a fair means of charging that supports the Government’s aims of minimising waste and resource use. I therefore commend the order to the committee.
Lord Anderson of Swansea (Lab)
My Lords, the Minister began his speech with a ringing declaration: “We must take action”. He set out a very convincing case on financial and environmental grounds for the action that the Government propose to take.
I recall the dedication in the magnum opus of a regius professor: “To my wife, at last, at long, long last”. The key observation is on the process of government and why there has been such a long delay on what is clearly an overwhelming case for action. It is not as though this is some startling brave new initiative on the part of the Government. No, as the Minister said, the proposal is already in force in Wales and has been since 2011. There has been ample time to see the results. It is not some laboratory experiment. We can see the results in Wales already; in Northern Ireland, since 2013; and in Scotland, since last October. It is not as if the results are uncertain. If we have eyes to see, we can clearly see the results. Given the very close nexus between Wales and England, do the Government seriously think that the response of the public and retailers would be different in England? All this vast expenditure on research and consultation in England is surely otiose. The views of the Welsh public are already well known. Do the Government have any strong indication that Welsh public opinion is different? The effect of all this is further cost and degradation.
I recall that in my Parliamentary Question on 14 May 2013, I asked,
“the pilot scheme in Wales has lasted for several years. Will the Minister spell out very clearly the objections to the implementation of the scheme in England?”.
The Minister answered:
“My Lords, as I just said, we are monitoring the charging scheme in Wales and data from the first year will not be available until the summer”.—[Official Report, 14/5/13; col. 264.]
That response was given in May. Now almost two years have passed and, even for the limited scope of the Government’s plan, they have been two wasted years. Since we know that 7.9 billion bags were given out in 2013, the two wasted years effectively amount to almost 16 billion bags. There was a successful test in Wales, which was clearly accepted by the public.
To give my personal position, I shop in supermarkets and retail stores in both Wales and England. There were no concerns in Wales when the charge was introduced. People fall quickly into the habit of taking along shopping bags to the supermarkets. When I shop in London, I do so with exactly the same habit and take along a shopping bag. I am sure that the bulk of people in Wales would do the same.
I note also that in Article 1(d) the Government have suggested an end date of 5 October 2022, as though they are not wholly convinced. What is the purpose of having an end date for this long experiment? It is something that is already working successfully in Wales. Does this mean that the Government are not wholly convinced? We know that a Government can review or end such a situation at any time if they choose to do so. Why include a sunset clause when the evidence is so clear?
Lord Whitty (Lab)
My Lords, I suspect the Minister was hoping for full approval for this government initiative. I am gratified that the Government have finally got around to it. I have been campaigning on this front for at least 15 years, so I am glad that, 13 years after the Republic of Ireland, and then following the devolved Administrations within the UK, we have at last reached this position. To continue the scriptural allusions of my noble friend Lord Dubs, there is always much joy in heaven for a sinner who repenteth, and we should all appreciate that. Nevertheless, we could have had a much clearer policy announced today—one that would have been better understood by the public. I was struck by the point made by the noble Lord, Lord Holmes, that it is people who litter, not bags. That is absolutely true. However, as the noble Viscount, Lord Ridley, said, the whole point of this tax is effectively to change behaviour. It is not a tax; it is a levy.
My noble friend Lord Anderson referred to the experience in Wales. I happened to be in Tesco in Dundee on Sunday with a young lad. I would not say that he had great green credentials nor that he was always affected by prices, but he had already—this is relatively new in Scotland—changed his behaviour and brought a bag with him. That is the point. Yes, in the end, it is people who create litter and, by using these plastic bags, not only cause unnecessary carbon emissions but bring desecration to our countryside, wildlife, marine life, beaches and many of our city centres. I am glad that my noble friend Lady Golding found only one plastic bag in her car park, but I must say that that is not the general experience in either urban or rural car parks, or in other open spaces. It has been reported that some 2,000 of them can be found on every square kilometre of beach. That is atrocious from the aesthetic as well as the environmental and economic point of view.
I welcome the principle, but it has been unnecessarily curtailed, and in such a way that it does not do what it alleges it intends to do. The big exemption is for retailers with fewer than 250 employees, which exempts quite large retailers and represents around a third of all retail outlets. These exemptions do not exist in the devolved Administrations, but the exemption for very small retailers from completing the reporting mechanisms—the real red tape and administrative burden—is set at 10 employees. That seems to be a sensible approach. The exemption should be from the reporting and administrative burden, not from the requirement to impose the charge.
The exemption makes a big difference to the figures in the Government’s own impact assessment. The net present value of this over 10 years, according to the impact assessment set out on page 7 of the Government’s report and as indicated by the Minister, is £782 million. However, it would rise to more than £1 billion if all retailers were included. The Government’s position would be understandable if the retailers themselves were strongly pressing for this exemption, but I am sure that other noble Lords have seen the representations from a number of organisations that represent retail outlets, all of whom are saying, “This is daft and will actually impose a burden on retailers that will put them at a competitive disadvantage in certain respects”.
The British Retail Consortium has said that it is unfair to put smaller retailers in a position where they have to choose whether to charge. There are doubts about having an inconsistent position across the UK. The Association of Convenience Stores has said that some 60% of its members support a single-use carrier bag levy being applied, and in Wales, where it has actually happened, more than 80% of convenience stores support it. The association would strongly support its own membership being covered by this in England as well as in Wales, Scotland and Northern Ireland. The British Independent Retailers Association, which is the voice of the independent retailer and is often critical of the red tape of government regulations, has said that this should cover businesses of all sizes and that the only exemption should be on the administrative burden, to which I have referred. The Government do not have the support of those who would allegedly benefit from the substantial exemption this order provides for.
There are other exemptions or potential exemptions which can also be queried. The noble Earl, Lord Lindsay, has spelt out comprehensively why the issue of oxo-biodegradable bags is not worthy of being considered as an exemption because of their knock-on effect on waste management and the reusability of plastics in general. Others have queried whether other sorts of bags that are being exempted should have that exemption. The big issue I refer to in that respect is: why should non-reused paper bags be excluded when they themselves have a very high carbon content and are a significant part of the litter around our towns and countryside?
Given, therefore, that there is now a general acceptance of this approach, and that the alleged beneficiaries of the exemptions do not seem to be in favour of the Government’s position, why do the Government persist in doing this? Why, in particular, do they do so when the rest of the United Kingdom does not provide for those exemptions, or most of them, and when we may well be faced with a European directive at some point, which will probably not have those exemptions either?
As I say, we should give at least two cheers for the Government for coming forward with this at last. Nevertheless, it is a pity that they have botched it a bit, and I hope that maybe they will fairly rapidly rethink this, and that, even if we adopt this statutory instrument today or when it is considered in the Chamber, they will come back and say, “Actually, these exemptions are pretty much a nonsense. Let’s make it straightforward so that everybody can understand it, and it will have the effect on everybody, whether they are a customer of a small or large business, whether they have a plastic bag or a paper bag, and whether they are in the country or the centre of our towns”. I hope that the Minister will take that at least as partial support, but some rethinking would be appropriate in his department.
Lord De Mauley
My Lords, I thank all noble Lords for their comments, but in particular I thank those noble Lords who have given at least the partial support that the noble Lord, Lord Whitty, offered. I will see how many of noble Lords’ questions and comments I can address, bearing in mind that our process may shortly be interrupted. However, I will see how far I can get.
The noble Lord, Lord Anderson of Swansea, asked why there had been a delay in getting to where we have. I know that I will not satisfy him entirely, and I suspect that he may have heard me say this before. However, I will say again that we carefully considered the situation and looked at the effect of the scheme in Wales to enable us to design what we considered to be the most appropriate scheme in England. As he knows, we first used voluntary industry initiatives to reduce bags, which proved successful up to a point. The other point it is worth making is that we needed to work with retailers to give them time to prepare. I know that I am not satisfying him entirely, but he will allow me to make that point.
He also asked what the purpose of an end date to the legislation is. It is standard practice from the perspective of Better Regulation to include a sunset date. It gives the Government of the day the opportunity to review the legislation to decide whether it is fit for purpose, and indeed to amend it if they wish to do so. Seven years is standard practice in that regard.
The noble Lord raised the exclusion of SMEs, as did a number of noble Lords. I am aware that some SMEs wish to be included within the scheme, but we have chosen to exempt small and medium-sized businesses from the charge to reduce the administrative burden on start-up and growing businesses at a time when we are supporting new growth in our economy. It is important to remember that the large majority of single-use plastic bags are distributed by the large retailers, and the seven major supermarkets gave out more than 7 billion of those bags in 2013. Small and medium-sized businesses are able to charge on a voluntary basis if they wish, and we have been told about some that already charge voluntarily and are generating significant financial benefits from a reduction in the number of bags they supply. I thoroughly encourage that. There is a requirement in the order for the system to be reviewed within five years, and the scope of the review will be set by the Secretary of State at the time, but I am confident that the SME exemption will be one element of the policy that will be considered as part of that review.
The noble Lord, Lord Whitty, asked a related question. The impact assessment also states that there is an overall net benefit to society when SMEs are excluded from the scheme. The Government have therefore chosen to exempt them from the plastic bag charge to avoid placing an administrative burden on them at a time when, as I said, we are supporting growth in the economy.
The Lord Bishop of Chester
My Lords, will the Minister confirm for the record that biodegradable bags degrade into carbon dioxide from their carbon content?
Lord De Mauley
Yes, I am quite sure that the right reverend Prelate’s chemistry is still current in that regard.
Lord Dubs
Perhaps I may ask a couple of questions. One is on unwrapped fruit. If one goes shopping, one normally buys a lot of things, including, say, four oranges. That means the shopping will be automatically exempt from the charge. That seems to be an inconsistency and, to my mind, not all that sensible. My other question is about publicity for the scheme. Surely one needs to encourage supermarkets to have publicity at the point of sale and wider so that people know what they are about. That will encourage people to take reusable bags.
Lord De Mauley
My Lords, my experience when buying oranges in the same way as the noble Lord, Lord Dubs, is that supermarkets tend to offer a very light bag specifically for that purpose. We are talking about a very light bag, not one into which he could put the whole of the rest of his bottles and other heavy items. I hope I made that as clear as I can. He also asked about publicity and I entirely agree with him. We very much hope that retailers will do as he suggests.