Draft Producer Responsibility Obligations (Packaging Waste) (Miscellaneous Amendments) Regulations 2016

Alex Cunningham Excerpts

Tuesday 26th January 2016 General Committees

[Alex Cunningham (Stockton North) (Lab)]

It is a pleasure to serve under your chairmanship for the very first time, Mr Streeter, and to have the opportunity to share my thoughts on the regulations, which appear to lack any element of controversy, although that, of course, does not minimise their significance. The Minister spoke of packaging as important for both its planned use and its recycling value, but the management and disposal of packaging waste and batteries can result, among other things, in the production of greenhouse gases and, if not handled correctly and effectively, further environmental consequences through the impact of landfill.

I agree that those greater considerations are often not at the forefront of the minds of consumers or indeed producers—or at least not as often as they should be, especially if we are to meet legally binding reuse and recycling targets of 65% by 2025 and 75% by 2030. EU analysis of recent trends suggests that further progress on resource efficiency is possible and that that might bring major economic, environmental and social benefits, which the Minister talked about. Stronger measures to close the loop and create a circular economy by transforming waste into a resource are an essential part of the necessary increases in resource efficiency.

As the Government’s impact assessment notes, without intervention, recycling levels would be insufficient. Placing some—only some—of the cost burden in the hands of packaging handlers and producers, as well as battery producers, helps to focus their minds on cost, and that is mitigating some of the environmental impacts to bring about a more efficient outcome. That all builds into the broader picture of employing economic incentives to entice producers into putting greener products on the market while supporting recovery and recycling schemes for their packaging, batteries and so on.

It is worth noting, however, that the stated aim of the regulations is to reduce the burden of producer responsibility obligations on businesses. The Government’s impact assessment notes that the current regime imposes costs on businesses that could be reduced without affecting its overall impact. I am clear that any reduction in burden for businesses must be achieved by improving the effectiveness of the schemes and must not come at the expense of the success of the new regulations. With that in mind, I welcome the Minister’s outlining of what steps the Government are taking to ensure that the removal of the requirement for operational plans to be submitted—a standard indication of best practice in many sectors—neither weakens the regulator’s role in ensuring that producers meet their obligations, nor undermines its role in monitoring performance.

Operational plans have traditionally been employed as a mechanism to ensure that schemes consider how they will meet a set of identified obligations and ultimately provide a framework within which regulators can monitor performance. Will the Minister therefore explain in a little more detail how regulators will be expected to monitor performance in the absence of operational plans? Will he also provide further details on future reporting standards in the absence of operational plans, such as the need for accurate data reporting and transparency? I know that he alluded to that briefly in his speech.

We are aware of the huge budget cuts suffered by the Department and the additional strain that the recent disastrous floods have placed on resources, but there is a cost associated with the changes made by the regulations. Will the Minister explain what additional funding the Environment Agency, the Scottish Environment Protection Agency and National Resources Wales will receive when they become the appropriate authorities responsible for granting approval for such schemes, rather than the Secretary of State? Let us not forget that budgets are already stretched across the Department and its various agencies, and that there are now hundreds of people fewer to do the work than before, which requires more from those people who remain in post.

None the less, the streamlining of the approval process across Great Britain and Northern Ireland is to be welcomed, especially because companies now will not have to apply for approval in both territories. However, easing the regulatory burden in this manner still causes potential headaches. With the creation of several appropriate authorities, the need for cross-border consistency is paramount if the regulations are to be successful in balancing the cutting of red tape against achieving improved outcomes. Will the Minister give us further particulars of the steps that are being taken to ensure that we achieve that consistency?

To refer back to the Government’s impact assessment again, doing away with the requirement for operational plans in the packaging sector is estimated to produce a saving of some £5 million over 10 years. The saving in the batteries industry alone, once requirements for operational plans and annual approval are removed, is put at around £300,000 over the same period. These are not insignificant savings and they are to be welcomed if they can drive higher rates of recycling and lower levels of waste while encouraging more companies to take a socially responsible approach. However, we must ensure that the consequences of any such actions, intended or otherwise, are properly considered before a decision is made so that we prevent progress towards meeting targets from being undermined. I look forward to hearing the Minister’s response.

--- Later in debate ---

[Rory Stewart]

That is a deep and important question. It goes back all the way to the design of the scheme in the mid-1990s, when the decision was made to create a market-based system rather than a compulsory one. Our view is that we have the right balance at the moment between recycling rates and costs. It would put a huge burden on businesses and the public purse if we were to adopt a compulsory system, but I would be comfortable about sitting down with the hon. Gentleman outside this room and having a more fundamental discussion about the market-based system.

We are, however, here to talk about not the market-based system itself, but issues such as operational plans and how they are implemented. Moving on to the challenges rightly made by the hon. Member for Stockton North, I welcome the fact that he is taking on board three out of four of the changes: having a simple, single port of call; ensuring that the system is delegated down to the appropriate level within the company; and ensuring that the change of approving body goes through.

On the removal of operational plans, the central question is what we are trying to achieve. Obviously, we are trying to drive up our packaging recycling rates. We have moved away from an operational plan system to a compliance system because, unfortunately, although the operational plans sounded good in theory, we discovered that people were not reading or updating them, and they were not a very useful tool for monitoring how people did packaging recycling. Ultimately, 80% of the operational plans did not represent useful information for achieving what we want—to increase the packaging recycling rate.

We believe that moving to a compliance system will allow the Environment Agency to take a more risk-based approach and will, above all, allow it to use more intelligently the market system that I have just been debating with the hon. Member for Coventry North West so that it can examine the data provided and the number of PRNs being traded, and ensure that we are achieving targets as they are set. We have heard a lot about that, for example in relation to aluminium this year. We do not believe that the operational plans are the correct way to achieve that.

That brings me to the challenge from the hon. Member for Coventry North West about how we will check that the system is working. There are two ways to do so. First, through my colleagues at DEFRA, who proposed the regulations and are working closely with the industry. The second point is that, to be honest, those in the industry with which we are working, from the packaging industry through to Tesco, are not quiet lambs who will go gently into a system that they believe to be bureaucratic, wasteful and not effective at achieving targets. One reason why we have introduced the changes is that we have had a lot of active, energised conversations with the industry over 10 or 15 years. I would expect those people to keep pushing hard. If they do not feel that they are achieving the savings that they want and the recycling rates that we need, they will come back to us in a tough way.

[Alex Cunningham]

Before the Minister concludes, I also asked questions about the how the management of the scheme by the new responsible body will be resourced and the consistency of implementation across the nation.

[Rory Stewart]

Those are two separate questions. Consistent implementation across the nations will be key, because what we are doing with the one-stop shop is to ensure that if England signs off on something, Scotland is prepared to accept that standard. To achieve that, we must ensure that our agencies work closely together, and we are working closely with the devolved Administrations.

The hon. Gentleman’s first point was about ensuring that the agencies are properly resourced when signing off on PRNs. Our current assessment is that they are properly resourced, and that the agencies are the right body to carry out that role. We have had long conversations with the agencies about taking that forward. However, I absolutely take note of that point, and we need to watch the situation carefully over the next three to five years to ensure that the job is being done properly.

We have had a distinguished turn-out of Committee members from both sides of the House, whom I thank for coming along. I am grateful for Members’ comments and questions, and I commend the regulations to the Committee.

Question put and agreed to.