Producer Responsibility Obligations (Packaging Waste) (Amendment) Regulations 2010

Lord Deben Excerpts

Wednesday 17th November 2010 Grand Committee

[Baroness Quin]

My Lords, again, I begin by thanking the Minister for his explanation of the regulations and for bringing them forward today. They are in many ways a continuation of an existing policy and approach, and derive from EU obligations. As the Minister explained, the targets needed to be updated for the immediate future. In responding for the Opposition, I simply raise a few questions that are largely stimulated by the Explanatory Memorandum. We know that consultation has taken place on the regulations, and I ask the Minister about the level of interest in the consultation and the overall responses to it. Is he happy about how extensive the consultation was and whether those who will be affected by the regulations heard about it and had a fair chance to give their views?

The Minister was uncharacteristically uncharitable yesterday at Question Time in referring to consultations under the previous Government. In my modest experience as a Minister, consultations were very important in arriving at and even changing government policy. It would be interesting to hear how effectively the Minister rates the consultation process that took place on the regulations.

At paragraph 7.3 of the Explanatory Memorandum, mention is made of the targets being set higher to offset the exemption for small businesses. Were any problems created through that; were there any specific areas of difficulty? I am not sure what proportion of SMEs are covered by the regulations. Does the Minister consider that the burden that is now on SMEs through the renegotiation of the regulations is reasonable?

In paragraph 7.6 of the Explanatory Memorandum, the Government talk about longer-term targets being set. I would be grateful if the Minister could give us an idea of the timetable for that process. In paragraph 7.7, mention is made of the revenue that can be raised. It states:

“Reprocessors and exporters are not compelled to spend the revenue in any specific way”.

Was any specific obligation on the spending of that revenue ever considered? Does the Minister have any further information about that?

In paragraph 7.10, the Government say:

“Most of the changes will have a negligible impact on businesses”.

I am happy to accept that that is the case, but since “most” is not all, it would be interesting if he could give us any information about what seem to be the most significant impacts of the changes.

Paragraph 7.11, to which the Minister referred, states that there is to be:

“The removal of the requirement on reprocessors and exporters to be independently audited”.

When I first read this I felt some concern, because independent auditing requirements are often extremely important. However, I understand from a later point in the Explanatory Memorandum that the regulators were happy with this change. None the less, I would be grateful if the Minister could tell us whether the regulators have any outstanding concerns about that. I realise that this may not be easy to answer, but can he say whether this requirement for independent auditing happens elsewhere in the EU, given that we are talking about EU regulations?

My final question is fairly basic but important. Can the Minister assure us that nothing in these regulations will affect negatively our recycling targets and the other environmental commitments that we have entered into? We want to be reassured on that point.

Once again, I thank the Minister for the way in which he introduced these regulations and for explaining the large element of continuity in them, which certainly seems to be in evidence.

[Lord Deben]

My Lords, I apologise for not being here for the Minister’s speech, except for his excellent final paragraph, but I was caught in the Chamber, having intervened on what turned out to be a rather controversial occasion. Politeness meant that I had to remain there until it had finished. I should also declare an interest—two interests, really. I was the Minister who invented these regulations and drew up the environmental regulations that were accepted by the European Union. This is unusual, because these regulations were created by Britain and France together to avoid the interference in trade that had otherwise occurred. Therefore, the regulations are permissive in the means by which we meet the ends. It is a very British concept. I also declare an interest as chairman of Valpak, which is the largest of the organisations that help businesses to meet the obligations under the regulations. It is a not-for-profit organisation set up by British industry and covers about 65 per cent of those who have to meet the regulations. I declare an interest, but perhaps I also declare knowing something about how these things work, which is not easy because they are somewhat complicated.

I have to say that there is a real and fundamental disagreement with the way in which the Government have decided to proceed. Britain has managed to become not the worst operator of recycling—as the noble Baroness knows, we have not been very good in our recycling record—by having the most permissive system that you could possibly have. It is very competitive and we have managed to do this probably more cheaply than any other country in Europe. Last year, it cost British business roughly £180 million to meet the obligations. It is likely to have cost German business about £1.8 billion. That is the difference in the efficacy of our systems; this is not a heavy burden on our businesses. Indeed, we actually have a positive advantage, because we run the system so effectively. I have to say that that is because we went in for a good capitalist system—it is competitive. Anyone who provides services has to compete with everyone else; if you do not provide or buy the evidence of recycling at the lowest possible cost, they do not come to you, they go to someone else. There is a real reason for this.

--- Later in debate ---

[Lord Henley]

It is the noble Lord, Lord Deben. I think the noble Lord, Lord Demon, might be someone rather different. However, that might be for another life of my noble friend.

[Lord Deben]

I hope not.

[Lord Henley]

As far as I am aware, that was not the case. I shall write to the noble Baroness in due course about that.

The noble Baroness then asked about the waste review—again, a matter raised by my noble friend Lord Deben—and when it would come out. Our intention is to publish it in April of that year. April might turn out not to be a suitable month because, as the noble Baroness will know, there are local government elections on 5 May. It might therefore have to be published on 6 May, but I cannot give a precise date other than an assurance that it will be before June.

On independent auditing, again I can give an assurance that, as I made clear in my opening remarks, we are keen to try to reduce the burden on all businesses. So far as I am aware, the regulators were perfectly happy. I am not aware of any concerns. We will continue, as we have said in the past, to make sure that we strive to meet all our recycling targets, and our targets post-2012 will be considered as part of the review to be published in 2011.

I turn to the points made by my noble friend, and again I pay tribute to him for, as he reminded us, inventing these regulations, getting them through with the support of the French—something I hope we will be able to do more often in the future, but we are all learning new tricks at this stage—and getting them agreed. I am also grateful to him for stressing their efficacy and the competitiveness of our system. What my noble friend is saying in effect is that our targets for 2011-12 are not ambitious enough. The simple answer to that is that we will have the review and we want to make sure that we get everything right before we move on.

[Lord Deben]

I understand my noble friend’s view, but this is a continuing system. If you decide to stand aside for a relatively important period, as this would be—if my noble friend can tell me that it will be for only a year I shall be happier—the fact of history is that it takes you several years to catch up if you discover that you do want to raise the targets. As I cannot imagine that anyone in the coalition would want to lower the targets, it might be better to do this as we have done it for the past 12 years.

[Lord Henley]

I can see my noble friend’s argument. In some respects we are continuing with that line. Perhaps I can offer him some encouragement in another field in this area. One of the other drivers of these things is the landfill tax. It will continue with its escalator, which is due to go on up to 2015, at which point I think it will reach £80 a tonne. It is certainly a driver for all those involved in waste when considering how to handle waste. What happens to the tax after that, as my noble friend is perfectly well aware, is not a matter on which I can comment. No doubt colleagues in the Treasury will look at the efficacy of that particular tax because it is one of the most successful taxes that has ever been created in changing behaviour.

My noble friend also said that he has been listening to those who advise him and that he wants the Government also to listen to them. He said that if he was wrong he would come to me, as he put it, covered in sackcloth and ashes and admit it. If we are wrong, I see no reason why we cannot amend things later, but in the mean time we want to get the waste review right. Once we have done that we can look at these issues again.

[Lord Deben]

Can my noble friend assure me that nothing will stop him—let me put it as delicately as that—coming back next year with a revision, or does he really mean that the arrangements for the waste review will mean that it will be at least two years before he can change this?

[Lord Henley]

I cannot give my noble friend an absolute assurance because we want to consider the results of the waste review before we come to decisions. He will know that Governments can do a great deal of things as and when they wish, particularly after publishing a review. I certainly cannot give an assurance that we will do something. All I can say is that we might, if it was necessary. I would then come to the noble Lord in sackcloth and ashes to say “Mea culpa” and whatever else he wished me to say. I am not saying that we will do this; I am saying that it is always a possibility.

[Lord Deben]

Of course my noble friend cannot say that he will do it; indeed, that is not what I asked him. I asked him whether, if it turned out that it were necessary, he would do it. I am sure that he would. My question now is: if it were necessary, could he do it in the time, or could something in the circumstances make it impossible? If nothing in the circumstances would make it impossible, I am happy to rest on his good assurances and he need not say “Mea culpa” to me.

[Lord Henley]

I can never give an absolute guarantee; it would have to be a guarantee given by me at this stage. All that I am saying is that I believe that it would be possible if necessary. I might be wrong, but my noble friend will have to rest on that assurance. The important thing is that we think that it is right and proper to get these things sorted out, as we are doing now, for 2011-12, then publish our waste review and then take things forward and make further decisions thereafter. I know that my noble friend says that the price of glass has collapsed. We have seen that in the past and it has gone back up again. We have seen that with other recyclables. I think we can cope with that. These are not the only drivers in this field; as I mentioned, there is also the landfill tax. I do not believe that we face the problems that my noble friend suggests.

I hope, therefore, that the Committee will accept that at this stage it is right and proper that the regulations go through, and that we will consider them again in the light of the review, which will be published in the spring of next year.