Packaging: Extended Producer Responsibility

Mary Creagh Excerpts

Thursday 27th November 2025 Westminster Hall

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mary Creagh)]

It is a pleasure to serve under your chairship, Ms Lewell. I thank my hon. Friend the Member for Gower (Tonia Antoniazzi) for securing the debate, and thank hon. Members from across the House who have made valuable contributions today. I am struck by the cross-party consensus. This is the first time we have welcomed a Reform MP—the hon. Member for Runcorn and Helsby (Sarah Pochin)—to these discussions.

Let us remember that these are the biggest changes to recycling policy since the landfill tax was introduced in 2002, under the last Labour Government. The changes were introduced with cross-party consensus. All parties support what this Government are trying to do. Indeed, the changes are the continuation of much of the policy of the previous Government, but there have been some important changes—we have certainly not done the seven bins that they proposed in the Environment Act 2021.

EPR for packaging is the cornerstone of the recycling reforms. The reforms are designed to drive up the recycling rate to 55% over the next 10 years. The rate has languished at 42% since about 2015, despite what the hon. Member for Epping Forest (Dr Hudson) said. The reforms will increase the quality and quantity of the recycling that local councils collect, support sustainable growth in the UK waste management and reprocessing sector, and reduce our reliance on materials imported from overseas.

We have just come back from the conference of the parties in Belém. The negotiations galvanised all nations to take steps to reduce our greenhouse gas emissions and our impact on the planet. Think globally, act locally—this is our local action.

EPR moves recycling costs from us as taxpayers to the packaging producers. It works alongside other reforms to create systematic change. Simpler recycling in England will make recycling easier and more consistent. From 1 April, we will be able to recycle the same materials, including glass, whether at home, work or school. That will change the quality of the material streams to enable us to move to the much more circular economy that we all want to see.

[Andy Slaughter]

Will the Minister give way?

[Mary Creagh]

I am going to make some progress, because otherwise we are never going to get through this.

We have already provided £340 million to local councils in England alone, in particular to bring in food waste collection. That is particularly important, because it will allow us to create green gas and digestate, which we can use as fertiliser. We have to move away from the high-input fertilisers we use now.

In this space, pEPR has an important role to play. It will divert packaging from residual waste into recycling. We estimate that the policy will save 200,000 tonnes of carbon dioxide equivalent and about £189 million in emissions. My hon. Friend the Member for Gower spoke about growth. These reforms will support a thriving economy. As a result of these reforms, the waste management sector has committed to create 25,000 new jobs and invest more than £10 billion in the economy. Circular industries, keeping products and materials in circulation for as long as possible, now deliver £67 billion each year to our economy, and growth in this sector is more than double the rate of the overall UK economy.

We have heard concerns, which I shall address quickly. We have met with glass producers—I can go through the list of the meetings. Basically, glass, due to its durability, is uniquely placed to take advantage of the generous financial incentives pEPR provides for reuse, because reusable containers only attract a fee the first time they are used.

The Government recognise the value of the glass sector to the economy and have provided direct support to four of the major container glass manufacturers—Encirc is one of them—through the British industry supercharger scheme to ensure they remain competitive in a global market. I have some details here about how much they are going to save. Four glass companies are in receipt of this support and the package of measures is estimated to save eligible companies around £24 to £31 per MWh and reduce electricity costs so they are more closely aligned with their key international competitors. That is designed to reduce the risk of carbon leakage and help them to compete on the international stage.

Yesterday’s Budget was mentioned. For pEPR, the Chancellor has announced consulting on proposed changes to the packaging recycling note scheme; consulting on options to drive transformation of local authority waste management and ensuring the accountability of pEPR funding. I have written to local authorities, as well as to PackUK, to reassert the need for this money to be spent on collecting packaging waste and not on cross-subsidising other areas of local authority spending; and appointing producer leadership of the scheme by March next year to give industry a central role in running the scheme.

In the hospitality sector, we are publishing a national licensing policy framework, asking licensing authorities in England and Wales to consider the need to promote growth and deliver economic benefits in their decisions; we are appointing a retail and hospitality envoy to champion and deliver these changes; and we are making a commitment to explore changes to the planning framework to make it easier for hospitality businesses to grow.

We heard a lot about the brilliant small businesses in MPs’ constituencies. For small businesses, we have some of the most generous exemptions of any scheme in the world. Businesses with a turnover below £2 million or that place less than 50 tonnes of packaging on the market are not obligated to pay pEPR fees or recycling obligations. The exemptions mean that 70% of UK businesses that supply packaging are not obligated under this scheme. We have also heard about issues around the bills and the paying of the bills. To help larger businesses that are obligated, PackUK is offering quarterly payment options to help with cash flow. PackUK will watch the thresholds carefully, knowing that raising them would push costs on to the remaining businesses as local authority collection costs stay the same.

We have been listening to feedback so we have adapted our approach. This time last year, we were working tirelessly with the Environment Agency to bring so-called free riders into compliance—people who were putting glass on the market but had not actually registered with anybody anywhere. That increased the total tonnage of material registered in the scheme and enabled us to reduce the final fees, so the reduction of the base fees for 2025 actually went down by up to 38%, depending on the material.

Let me talk quickly about steel. I met with the Metal Packaging Manufacturers Association in September, and officials are following up on that. I am very conscious of the need, when the new arc furnace comes on stream, to make sure that we have a steady supply of scrap steel to enable it to stay in continuous production.

We are also engaging with stakeholders to develop the approach to in-scope packaging. We are looking at household packaging that is sometimes disposed of in business waste—for example, beer and wine bottles can be disposed of in pub bins.

We are looking at changing the recycling assessment methodology for next year to address complex composite packaging, which is really hard to recycle—particularly foil packages, which may have plastic on the inside and may contain paper. I talked to local authorities about that only this week, and we hope to bring forward a solution as soon as possible.

[Christine Jardine in the Chair]

[Andy Slaughter]

The Minister has a deep understanding of this issue, and we all support the objectives that she is aiming for, but obviously we have come along to bring our problems to her. I hope she will not mind dealing with the two issues that have been raised: double charging for pubs, which is estimated to cost them £50 million, and the fee for glass—the weight versus volume equation—which is estimated to cost brewers £124 million a year. Those are real costs to businesses, many of which are up against the margins and are dealing with other pressures in the hospitality industry.

[Mary Creagh]

I thank my hon. Friend for his follow-up questions. Several colleagues have raised the issue of cost being calculated by weight and not by unit, but waste management costs are largely driven by weight. We have taken into account other factors that influence collection costs, including the estimated volume of each material in bins and collection vehicles. Glass is a heavy material with a low resale value. A unit of glass packaging costs more for a local authority to manage as waste than an item made up of more lightweight and high-value material. Our recycling assessment methodology changes are published on defra.gov.uk, so people can see the changes that we are proposing to bring in next year and how we are ramping up the fees payable for less recyclable packaging.

Reuse and refill of packaging provides a real opportunity for economic growth and job creation. Earlier this year, GoUnpackaged produced economic modelling that made a compelling case for scaling up reuse in UK grocery retail. That work showed end-to-end system cost savings of up to £577 million a year, highlighting the economic viability of reuse in the UK. In response to that research, major grocery retailers have committed to working together to scale reusable packaging systems. Innovate UK has commissioned a scoping study to develop the blueprint for the first wave of this bold multi-retailer reuse scheme, so change will be coming in this sector pretty fast.

[Dr Hudson]

The Minister is talking about economic viability. I mentioned that the Government said in the Budget yesterday that they will consult on the EPR scheme, and she has repeated that. The Conservatives are calling for an urgent review. A consultation is not good enough; proverbially, that just kicks the steel can down the track. Will the Government commit to an urgent review so that businesses do not suffer in the coming months?

--- Later in debate ---

[Mary Creagh]

There are two things at play here. One is the recycling assessment methodology. The proposed changes for year two of the scheme are on the website already, and we will be legislating for them. I held a roundtable with packaging producers in July, and we spent the summer looking at different options. People have mentioned the different fees in Germany. Germany has a very large reliance on bring sites, so people bring their glass bottles to a place; they are not collected from the home. It is our household waste collection that makes our fees necessarily higher.

We have looked at dual-use packaging, and various proposals have been put forward, but not a single proposal had unanimous agreement. We are trying to hold the ring between packaging producers, microbreweries, supermarkets and local waste authorities. There is no simple solution to this complex problem—[Interruption.] It is hard. The previous Government devised and put forward legislation on this, and, of course, as soon as that is brought in, all the issues with it come out. We are working on that and we are meeting with them. In my box, I have a submission on proposals for how we carry on looking at that, so today’s debate will genuinely feed into my decision making on it.

[Jim Shannon]

In my contribution I referred to DAERA in Northern Ireland. Can the Minister engage with them—I know she probably does already—so that we can work together on progress going forward?

[Mary Creagh]

I thank the hon. Gentleman for reminding me of that. I know that one of the issues in Northern Ireland is doing the behaviour change and driving up recycling rates. Communication is one of the most important things, and I take on board the official Opposition’s comments about the communications on this issue. It is incredibly complicated; civil servants are dealing with a massive change programme and everyone is trying to say what matters and how it changes.

Through the simpler recycling reforms, we are asking for everyone to be able to recycle the same things in every local authority and every workplace across the country. That is a massive system change, so there will be some confusion. There will need to be management and communication of that change, and for that we are essentially reliant on our local authority partners to get those messages across. I think I am meeting with Minister Muir shortly—we meet quite a lot to discuss these issues.

The hon. Member for Strangford (Jim Shannon) told a story about his grandchildren. In 2002, when we brought in the landfill tax, we had one bin—it was a black bin, and everything went in it—and the question was, “Is this ever going to work? Will recycling ever happen?”. I take great encouragement from the fact that when we tell people, “This is your bit. This is what you can do locally in your home and your kitchen to help to tackle climate change and reduce carbon emissions,” the vast majority of people want to do the right thing—even, like the hon. Gentleman, by going and picking out the things out of the bin that should be recycled; and if he has not done it, then his grandchildren will do it for him. There are a lot of encouraging stories of hope that we can tell here.

We are looking at the German model and the Austrian model as part of how we might develop on these issues in the future. This package of measures will be the foundation for unlocking the transition to a circular economy in the UK. We hope to publish our circular economy plan in short order. Everything that is in our bins affects us, but we need to look at textiles, construction and waste electricals—there are huge volumes of materials flowing through the economy that we are not capturing.

[Sarah Dyke]

I want to push the Minister on the plight of our struggling hospitality sector. I asked if she could consider exempting pubs from the EPR scheme at this stage to give a chance to review the scheme and help support our struggling hospitality sector.

[Christine Jardine (in the Chair)]

Very briefly, Minister.

[Mary Creagh]

I have to be brief. As I say, we are keeping all our policies under review. The EPR scheme will not be sorted out quickly—it only went live in October, and here we are in November, asking for a big change. We have also heard that businesses need certainty, so I do not want to set any hares running by saying, “This is all going to change next year.” We need to do it in slow time, by consensus and by working with industry. I thank Members for their valuable contributions to the debate; this feedback will genuinely help us to create a fair transition to a circular economy, as we continue with these important reforms and build a world where the UK leads in innovation and sustainability.