Producer Responsibility Obligations (Packaging Waste) (Amendment) Regulations 2012

Lord Jenkin of Roding Excerpts

Tuesday 20th November 2012 Grand Committee

These regulations will help enable the UK to achieve its ambitions on recycling, ensure that we continue to meet our EU obligations, and generate economic and environmental benefits. I hope that I have explained what is intended and I look forward to hearing the views of the Committee. I beg to move.

[Lord Jenkin of Roding]

My Lords, I am grateful to my noble friend for explaining so clearly the purpose of these regulations. I suspect that over the past couple of weeks he has had to undergo something of a crash course in recycling and the associated functions that go with it. Later I will refer in more detail to a meeting that he was able to hold with me and with representatives of the plastics industry as recently as 8 November, which is less than two weeks ago. I have to say that there has been a huge amount of activity since then.

Perhaps I may take a moment to rehearse the earlier history. I should declare an interest in that for some 13 years I worked in the plastics industry, although it was a very long time ago. However, I am familiar with some of the materials we have been discussing. On 1 May, I was approached by representatives of the two main trade associations, the British Plastics Federation and the Packaging and Films Association—films meaning bags rather than movies—who came with very clear messages. They said that they had been seeking to discuss these matters with officials in Defra, but were given the clear impression that they simply were not listening. They had asked to see a Minister, but were told firmly that that would be wholly inappropriate. They then sought my help.

My first move was to approach my noble friend’s predecessor, my noble friend Lord Taylor of Holbeach, for whom I have very high regard. After some hesitation his private office said that no, a meeting would be quite inappropriate. I have never discovered why, although I have made inquiries. I then said to his office, “Look, the noble Lord cannot refuse to see me”. That is par for the course since he really is obliged to do so, and eventually we were able to fix a date on 25 June. However, nearly two months had now gone by since my first approach. I put the case to my noble friend in his capacity as the former Minister, who said, “Yes, of course I can agree. The difficulty has been removed”. But I am afraid that I never understood what the difficulty was—I have a horrid suspicion that the difficulty may be sitting behind the Minister now, but that is a different matter to which I shall come later.

It took a month before the Minister’s private office came up with a date. I saw him on 25 June, and on 25 July his officials said, “The Minister will be pleased to see your deputation on 23 October”, by which time four months would have gone by. I asked why the meeting had to be as late as that, and was told that the Summer Recess was coming up and that it would not be possible to meet the deputation during that time. This is a matter of no criticism whatever either of the department or of the present Minister, who on 23 October was faced with having to deal with the Statement on badgers. I have said to many people that, in his position, I would have done exactly the same. I would have said, “Clear my diary. This Statement is going to be difficult to handle”, and that is inevitably what happened. So, in the end, we had the reshuffle and the Minister changed. I welcomed very warmly my noble friend Lord De Mauley’s readiness to hear the case, and the meeting was fixed for 8 November.

The industry put its case very clearly and in some detail as to why it felt that these targets were wrong. Its main message was that they are unachievable. It made the point, and I made it myself, that there really is no point in Governments setting targets that they are told by the people who are going to have to deliver them are unachievable. No doubt my noble friend will confirm this, but I got the impression that he was impressed by the strength and detail of the industry’s case. He turned to his officials and said, “Surely the right thing here is for the two sides to get together and find a compromise”. We were all rather shattered when the senior official present answered blandly, “Well it is just too late—the order’s been laid and we can’t change it now”. They had been talking for an hour before the Minister was told that there was no point in listening because it could not be changed. The industry was very angry, as I am sure noble Lords will understand, and the meeting broke up in some tension.

I had a few words with the Minister afterwards when he very kindly agreed to stay and he has moved very quickly since then. There was an immediate invitation to the industry to set out the details of its objections to the order in writing. A meeting took place in the department and officials were instructed to respond to those objections point by point. A paper setting out the arguments would then be submitted to my noble friend for his approval, which was then to be sent to me. That is, in fact, what happened, and I duly got the paper last Friday. It consisted of 14 closely typed pages of print, including point and counterpoint, which, with the benefit of computers, I was able to forward immediately to the industry. It goes into a great deal of detail and I do not propose to weary the Grand Committee with that now. However, the immediate reaction of the industry, which I found very interesting, is in a quote that it sent me by e-mail:

“It is the first time they have responded in detail to our concerns”.

This was as a result of my noble friend’s initiative, which we very much welcomed. At the meeting, the industry had continually asked where the department’s evidence was to support what it had put into the order and why officials had so far taken no notice of the concerns that the industry had first voiced during the consultation period earlier in the year. At least now, they had to answer the points, which are in that 14-page paper.

I asked the industry for its comments over the weekend and I got them late on Sunday night. This time, it was 15 pages of very detailed analysis of Defra’s answers. However, the industry was still dismayed that there was absolutely no sign of the department recognising the validity of its concerns. As I have said, my very first reaction to all this was to ask why this was not all done months ago, why all these exchanges— 29 pages of exchanges—did not happen before and why we had to wait for my noble friend the Minister to intervene before his officials were prepared to answer the industry’s concerns.

The essence of the industry’s case has been, from the beginning, that it has no quarrel whatever with the department’s objective of increasing the collection and recycling of plastic waste. Indeed, its own objective—to which it has given the title, Plastics 2020 Challenge—is to ensure that no plastic goes to landfill by 2020, and that the maximum amount should be recycled and reused. This is something I would have thought the Government would have accepted. The department’s objective, which my noble friend spelled out, was that the policy should go further and faster than that, and indeed further and faster than was required by the EU directive of some years ago. Again, I will not go into the details of that, but it is a fact: the department is going faster than the EU directive requires.

--- Later in debate ---

[Lord Knight of Weymouth]

My Lords, given the debate so far, the Minister might be pleased to know that we support these regulations which build on the 2007 regulations brought in by the last Government. Obviously we are mindful of the impact assessment on the estimate that £400 million-worth of overall benefits have derived from them, so it is good that there are occasions when this Government believe that statutory targets and regulation can bring an economic benefit. That is not always the message we hear. However, I note the comments that have been made by the noble Lord, Lord Jenkin, and the noble Earl, Lord Lindsay. Given the first question put by the noble Earl, I am also concerned about the timing of the regulations. Should the Minister listen to our debate and decide that, unlikely as it may seem, it might be best to withdraw the regulations and think again, there would not be time to bring forward new regulations before those currently in force will run out at the end of the year. We would then be in a very awkward position.

In effect, there is a fait accompli in respect of these regulations. I do not think that that is desirable and it is not good, transparent law-making. Indeed, the sorry tale of lack of engagement with the industry related by the noble Lord also suggests that there are some in Defra who perhaps need to smell the coffee in terms of how good law-making is conducted. The days of “Whitehall knows best” are over so far as the public are concerned, and we need to ensure that there is proper engagement—even with those who you know are going to oppose the laws we are making—so as to ensure that the best possible compromise between the competing interests is arrived at. I think that the estimate in the impact analysis was that there would be losses of just over £22 million to business as a result of these regulations. There are going to be losers as well as those who will benefit from the jobs and economic activity that attaches to recycling. I want to make those points of sympathy, even though we are on different sides of the argument in respect of these regulations, for the comments of the noble Lord, Lord Jenkin, and the noble Earl, Lord Lindsay.

The only questions I have for the Minister are to try better to understand what criteria he used in setting these new levels. We have heard figures like three percentage points a year for aluminium, five for plastics, one for steel, while glass is being held on the assumption that the target will be split by end use. There are other targets for paper, wood and so on. The department must have carried out a sensitivity analysis of what is the right level of increase that is sustainable for the packaging industry and in terms of capacity in the recycling industry. Even if he cannot give us a detailed assessment now, it would be interesting if he could either point to where the analysis is in the Explanatory Notes—if it is there, I have lost it—or if he would drop us a note to let us know. I am sure that that transparency will be useful as the ongoing discussions take place.

My second question is asked in part on behalf of my noble friend Lord Haskel, who was hoping to speak in the debate, but while he has been able to move in and out of it, unfortunately he missed the opening speeches and so feels unable to contribute. He, too, is critical of these regulations. One question that he was going to ask—it is in his speaking note, which I have seen—concerns the adequacy of local collection services, and what analysis the department has made of the capacity of the services to deliver on these regulations. Clearly, if the recycling cannot be collected, the system will not work very well. Any answer on that for my noble friend and for me would be gratefully received.

Finally, I am interested in the Minister’s views on what will happen after 2017 when the regulations run out. I am sure that if he is sympathetic to the notion of a mid-term review, which he has been asked about, we would be interested to hear that, too. Does he think that continuing with targets is the right way forward post 2017, or is this a measure to extend the existing approach while he thinks about a new one? What is his view on whether the infrastructure is broadly right, and whether it will remain stable and go beyond 2017? Any indication on that would be well received by the interested parties who will be listening carefully to his comments as the responsible Minister. I know that often he has to respond for other Ministers in the department, but in this case we are hearing the words direct from the Minister’s mouth, and anything he can give us to elucidate these matters will be warmly received. As I said, I am broadly supportive of the regulations.

[Lord Jenkin of Roding]

Perhaps I may remind the noble Lord that the policy produced by the industry—the Plastics 2020 Challenge—continues to 2020. The industry would ensure by then that nothing will go to landfill.

[Lord Knight of Weymouth]

In making that comment, the noble Lord reinforces his point that engagement with the industry is a wise course, alongside engagement with the recycling industry, which stands to gain more business and more employment as a result of these regulations.

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[Lord Jenkin of Roding]

Does the Minister think that the two trade associations whose representatives he met, the British Plastics Federation and the Packaging and Films Association, represent only a small part of the industry? That is not the impression they gave me.

[Lord De Mauley]

My Lords, the calculations I have been given indicate what I have just stated. Furthermore, I understand that there were opposing views even among the members of those associations who responded to the consultation. I do not argue with the fact that there has been opposition and that it is important to consider it. Indeed, I have and am considering it.

[Lord De Mauley]

If I may, I shall come to the advisory committee later in the debate.

My noble friend Lord Jenkin referred to his concerns about the achievability of the targets. I shall go into some detail on that because I think it will be helpful to noble Lords. The 42% recycling rate was consulted on and, as I said, the majority of the consultation responses supported the proposal. I acknowledge that the target is challenging and we will monitor progress closely, calling on the expertise of the Advisory Committee on Packaging. In responding to the consultation, waste companies, reprocessors and local authorities felt that the infrastructure was sufficient to deal with demand and that further infrastructure would come on stream by 2017 to cope with increased supply and demand—I think that that is the question to which the noble Lord, Lord Knight, referred. The quality of recyclates is also something that the Government take seriously. My officials are working on an action plan, to which my noble friend referred, to address the quality of recyclates, and it will be published shortly.

I turn now to the targets themselves. As I say, it might be helpful to noble Lords if I go into a little detail on these. Defra has conducted a full analysis of how the targets can be achieved. As with any projections, assumptions have been made. That is why we exposed our analysis to scrutiny through public consultation and we asked industry if we had got it right. Most of the organisations that will be required to collect, sort and reprocess the additional material thought that the higher targets would be achievable. However, as we heard today, some in the plastics manufacturing industry remain concerned about the achievability of the plastics targets. Officials have met representatives of the industry and, as my noble friend said, I myself have met them. I have carefully reviewed the concerns raised and the evidence provided.

I will take the different targets in turn, starting with plastic bottles. The lion’s share of hitting this target will fall to bottle recycling. Good progress has been made, with the UK now recycling just over half of the bottles that are thrown away. However, around 240,000 tonnes of household plastic bottles that are disposed of in households with access to plastic bottle recycling collection points still end up in landfill. This makes no sense. The material has a value of at least £18 million. We must get it out of landfill and into recycling. This can be done relatively cheaply because the infrastructure is already in place. Nearly every local authority in the country is collecting bottles, while the sorting and reprocessing infrastructure is well established and the end markets are thriving. The key to capturing thousands more tonnes of plastic bottles is communication. I want to see industry and local authorities working together to communicate to the householder. For example, the plastics industry could follow the model adopted by the metal packaging and reprocessing industry under its “Metal Matters” campaign, which has increased householder participation in recycling schemes by up to 40%.

The other source of plastic packaging we expect to make a major contribution to achieving the targets is from the commercial and industrial sector. Our estimates suggest that a significant tonnage is currently being recycled but is not being counted by the PRN system. Indeed, in 2005 almost 350,000 tonnes of commercial and industrial plastic packaging was collected for recycling compared with apparently less than 280,000 tonnes in 2010. We believe that the disappearance of 70,000 tonnes was largely because there was no need for the material to be counted towards meeting the recycling targets, but that it actually continues to be recycled outside the PRN system.

[Lord Jenkin of Roding]

Does the Minister not recognise that with that additional amount put in, it will simply be a question of counting it? It will not get any more, because it is very nearly complete. A vast quantity of the commercial and industrial plastic weight is already being dealt with. Therefore, how can there possibly be a substantial amount still to go to meet the targets? I am sorry; the argument simply does not stand up.

[Lord De Mauley]

All I am suggesting is that, as a contributor to the target, there is 70,000 tonnes or thereabouts available which is not currently being counted.

[Lord Jenkin of Roding]

It is happening.

[Lord De Mauley]

It is happening, but it is not counted in the current targets: that is the point. Of course, we will need to look at other plastics streams.

[Lord Jenkin of Roding]

It is a mockery.

[Lord De Mauley]

This includes recycling more plastic pots, tubs and trays and more plastic films. We recognise that increasing the collection and recycling of these types of plastic represents a challenge, but we are seeing some encouraging trends. For example, in the past four years more than 100 local authorities have introduced collections for pots, tubs and trays. This has seen the recycling rate for these items more than treble over the past five years from 5% in 2008 to 18% now. To meet the proposed plastic recycling target we are looking for the recycling rate to increase from the current 18% to 28% over the next five years. There is also a range of planned waste policies that will encourage local authorities to collect a wider range of plastics for recycling. In particular, WRAP is investing £5 million, through its mixed plastics loan fund, by which it means to deliver, by 2015, a further 100,000 tonnes of recycled pots, tubs and trays—double the 50,000 tonnes we anticipate will be needed from this stream to meet the overall target.

Of course, the higher packaging recycling target being debated today will help provide extra stimulus for local authorities to roll out collections and for MRF operators to invest in new sorting technology to handle a wider range of plastics. Other waste policies will encourage greater collection of plastics. These include the landfill tax, which is set on an increasing scale, making disposal of these items less economically attractive, and the revised waste framework directive, with its focus on separate collection of plastics and other dry recyclates by 2015.

We recognise that there are concerns about infrastructure capacity. However, I understand that most new sorting facilities, or MRFs, are being designed to handle mixed plastics or will have suitable capacity to add additional materials at a later date to support changes to local authority collection services. Furthermore, the Environmental Services Association, the main trade body for waste management companies, has stated that there are plans for an additional 6.6 million tonnes of MRF capacity to come on stream between 2013 and 2017. On that basis, the 50,000 tonnes of additional plastic anticipated should be manageable.

My noble friend Lord Jenkin referred to glass and asked about meetings. There was recently a meeting with British Glass to discuss the targets for 2012. I am not aware of wider requests for meetings from the glass sector. It is important to recognise that the glass targets before your Lordships today are flat and only slightly above the minimum 60% necessary to achieve the target set in the EU directive.

I listened carefully to concerns about the costs of the new regulations on certain business sectors. I ask noble Lords to accept that this needs to be seen in the context of the overwhelming benefit to the economy as a whole, including the UK’s recycling and reprocessing industry. Most businesses on which the obligation to meet the proposed targets will fall are in favour of them. In setting them, we sought to balance the costs to businesses, and we did not increase them unless there was a sound business case for doing so.

My noble friend Lord Jenkin asked about exports. I am fully supportive of the need for a level playing field. As part of the ongoing review of the packaging regulations, we are exploring the issue and considering options for how it may be addressed. I believe that there is significant scope for growth in domestic demand for recovered plastic. Security of feedstock has been cited as discouraging some reprocessors from entering the market. We believe that the proposed targets will provide greater confidence in supply, plus the financial support to enable investment in increasing domestic reprocessing capacity.

My noble friend Lord Jenkin referred to the Advisory Committee on Packaging suggesting lower plastic targets in its report of work carried out in 2010-11. The ACP’s response to the consultations actually supported the Government’s preferred option of higher plastic packaging recycling targets. Its report of work in 2011-12, published earlier this year, confirmed its advice that the higher plastic packaging targets suggested by the Government would be achievable provided that there was an increase in the provision of collection infrastructure and that participation rates increased. Furthermore, more new infrastructure is, as I have said, coming on stream to cope with supply and demand.

My noble friends Lord Jenkin and Lord Lindsay asked for a mid-term formal review. I think that I can go further than that. I assure the Committee that my department will monitor progress throughout the period in question and will take appropriate action if needed. The ACP has a standing agenda item at its quarterly meeting to review packaging recycling achievement data and to advise Defra on trends and impacts on achievability going forward. I will keep a close eye on that. I am also happy, as my noble friend requested, for discussions to continue between those he represents and my officials.

My noble friend Lord Lindsay suggested—perhaps I am paraphrasing him unfairly—that Defra used its own evidence. Defra used a range of evidence sources, including WRAP research on collection costs, industry data on waste from groups such as PackFlow and the ACP, as well as evidence submitted as part of the consultation.