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

Debate between Rory Stewart and Geoffrey Robinson

Tuesday 26th January 2016 General Committees

[Rory Stewart]

Let me deal briefly with the two challenges that have been set. First, I take on board the points about examining the effectiveness of the compliance and comparing European rates with the British one. To take that last point first, it is absolutely true that we have a lot to learn from other countries, and not only outside the United Kingdom, but even within the United Kingdom. Wales, for example, is doing interesting stuff on getting a single, unified recycling system across the nation, and that is something that we would like to see, particularly for household waste. It is also true that the United Kingdom’s approach to packaging waste is very different from that in Belgium or Germany. We have created a market, effectively by trying to incentivise companies such as Tesco to reduce their packaging waste through attaching a cost to that waste and then allowing them to decide how to act, whereas some continental European countries simply take a much stronger legislative approach that involves compulsion.

That said, we are about mid-table at the moment, and our rate of 64.5% is pretty good in European terms. Germany and France have higher rates, but they have much more expensive systems. It is difficult to compare apples and oranges, as their systems are compulsory, rather than market-based, and they are achieving their rates through huge public expenditure that we do not incur. However, we are considering the PRN system carefully, and we will be taking the matter forward through the circular economy discussions in Europe to find out whether there are things that we can learn. Our gut instinct will probably be to encourage other European countries to follow our lead, but I agree that we in Britain should never be too complacent, and we have a lot to learn from other people.

[Mr Robinson]

Although those countries have more expensive systems, the point is the net effect. Is that paid for by the higher rates that they achieve? How do the Scandinavian countries fare, particularly Denmark and Sweden? There seems to be a little complacency about how the artificial market that we have constructed is working.

[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.

Amendment of the Law

Debate between Rory Stewart and Geoffrey Robinson

Thursday 24th March 2011 Commons Chamber

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

I am very pleased to follow the Secretary of State for Business, Innovation and Skills, but, unfortunately, by the end of his speech he still had not told us a single practical thing from the strategy for encouraging growth. Despite all the pages in “The Plan for Growth”, the Office for Budget Responsibility stated yesterday that it found nothing that it could measure as contributing to an improvement in the UK’s growth prospects. He goes on about low interest rates, but I wonder whether he has tried to borrow, or knows of any small company that has had to borrow, in the current difficult market and has been able to do so at the low or zero interest rates to which he referred. That is absolute nonsense. It is divorced from the real world and he knows it.

The Business Secretary knows that when we were both in different places in the Chamber he used to say that we had either to establish a national bank or its equivalent or to make the banks lend. He has come up with no solution to the problem and the fact remains that the single biggest inhibitor to growth in the vital sector of small and medium-sized enterprises still remains, and that is their inability to access credit. How can they grow in a difficult situation when markets are flat without access to credit? That is the question he has not answered and until he has answered it, he has no credibility as a Business Secretary. We need definite plans for doing that at some stage.

[Rory Stewart]

Will the hon. Gentleman give way?

[Mr Robinson]

I shall in a moment.

It is no good the Business Secretary asking us for our plans. He now has responsibility, he chose to take it and he chose, also, to go into this coalition, having been convinced by a concerted effort by the Governor of the Bank of England and others that the Liberal Democrats were wrong before the election—that within one week of the election campaign, everything had been turned on its head and we faced an imminent crisis, the outcome of which was that we would face interest rate rises and an inability to borrow nationally, along the lines of the situation faced by Greece and Portugal. He knows that he did not even meet the Governor for a working over, because his leader, the Deputy Prime Minister, had already been worked over. Nobody else on the Government side needed to be worked over—the Governor had worked them over before and during the election campaign. The implicit deal was, “Go along with this huge deflationary package, and I will keep monetary policy so loose that you don’t need to worry—you’ll still get growth.” I believe that that is the sort of Faustian deal to which the Business Secretary referred in his reply to the Budget debate last year.

What have we seen since? Interest rates are still low and policy has been loose. No doubt it might even continue to be loose for a period of time, but I am sure that interest rates will go up in the near future. Irrespective of that, there is still no credit for the SMEs from which, as Sir Richard Lambert pointed out, the vast majority of jobs must come if the commercial and business sector—the private sector—is to recover. However, there is still no prospect of their being able to borrow. Why does the Business Secretary say, therefore, that there is no alternative because the OECD says so? The OECD is as wrong as everyone else. We heard last night from Robert Chote that all those forecasts are a “load of rubbish”. One cannot always be right about such things; nobody ever is. One might ask what the point of them is. Certainly, to invoke the OECD, which can be as wrong as anyone else, and say, “It says that we have to go on with this strategy, so therefore we will,” in the face of all the mounting evidence that the strategy is not working is perverse and not worthy of the intellectual distinction that the Business Secretary is capable of bringing to these problems.

The only thing that could be said in favour of the Government’s policies is that they have not had enough time yet—not quite a year—to have worked, but it is obvious that they are not working.

[Mr Robinson]

I shall in a moment, but the hon. Member for Penrith and The Border (Rory Stewart) is first.

The figures for every crucial forecast area of activity are pointing in the wrong direction. Unemployment is up, growth is down, inflation is up, bizarrely, and Government borrowing is up—the very thing they are meant to be getting down—as measured against the OBR forecasts. Those are the only measures we can use to judge whether their policies are working. We can look at the past and it is clear that they are not, but to see whether they are working, we have to look at the forecasts. The Government’s whole policy is predicated on such forecasts, but look at the figures now—down, down, down! Every single indicator is going the wrong way, but they still say that we have to press on with their programme—plan A or whatever it is. I think I heard the Business Secretary say, in response to an intervention from an Opposition Member, that some flexibility is built into the Government’s plan A. I do not know whether he will elaborate on that or whether I misheard—we will see in tomorrow’s Hansard whether I did. I did not raise the issue at the time because I was not sure whether I had heard right—I could not believe it. If there is some flexibility, the sooner it is acknowledged, built in and practised the better.

[Rory Stewart]

Clearly, it is very difficult to get banks lending to small and medium-sized enterprises and to balance the need for that against the problems caused by credit in the first place. What solutions does the hon. Gentleman propose?

[Mr Robinson]

I do think it is pathetic when the only answer that the Government, who are charged with handling the nation’s affairs, can come up with is, “What are the Opposition going to do?” If the Government want to vacate those Benches, my right hon. Friend the shadow Chancellor is not slow in coming forward and would be over there on the Government Front Bench faster than anyone. We have instead a Business Secretary who preached about these matters very eloquently when he was in opposition and said that he would be practical, but he has done nothing.

What do we have now that the current Government are in office? We have inflation going up to 4.4% or perhaps even 5% and the deficit reduction that was to come from growth being hindered because growth and the forecasts are all down. Each forecast, whether for borrowing, inflation, unemployment or growth, is heading in the wrong direction. Those are the facts. All indicators, whether for last year, this year, next year or even the year after that, are headed in the wrong direction. Perhaps the Government should fix the electoral cycle to have 10-year terms and then some latter-day outcome might eventually catch up with what they forecast at the beginning. It should be clear to anyone looking objectively at the evidence that the Government’s plan is not working, that it needs to be changed and that there are alternatives that could be pursued.

If we are talking about getting growth in the economy—the right sort of growth—I agree entirely that we need business employment and development in the private sector. Let us consider HS2—the stupid vanity project that I am sure the Business Secretary would have opposed when in opposition. It is being proceeded with despite the eventual cost of some £32 billion. I cannot believe that the Treasury is going along with it, but I am told that the Chancellor is, bizarrely, in favour of it. Why do we not switch from that to the simple plan that was set out in Atkins’ alternatives—I think it was alternative 2 —for an investment that could be proceeded with immediately, that would give us what is most needed right away and that would help Coventry: four-tracking the line between Coventry and Birmingham? That could have been given the go ahead this year, had effect next year and made a direct contribution.

Why cannot we get the schools programme back on track? Make it quicker, make it simpler—we would accept all the criticisms if that would make it easier for the Business Secretary to go ahead with it. In Coventry, we have not had a single school built—not one! One school in my constituency has been propped up by scaffolding for the past three years. I was on the shadow Chancellor’s back all the time about that when he was the Education Secretary, asking, “Why can’t we get it done quicker? Why can’t we do it?” I was told that procedures had to be gone through and all the rest of it. The Government should speed it up and get on with it, but they should not cut it and stop those projects as they are doing at the moment. I still believe that they should go ahead with some of the other important projects that we could do, particularly in transport, and that they should go ahead with building projects.

To take the example of building projects and the construction industry, I read a couple of days ago in the Financial Times that orders in the industry over the past six months are down 50% on the previous six months. Much of that would be good, constructive infrastructure investment of the kind we are want to see, creating employment and skills and making a real contribution to long-term growth in the private sector, and yet we have cut it by 50% in six months. That cannot make sense, and in the meantime unemployment, borrowing and inflation are going up—all the wrong indicators.

In my remaining minute I will focus on Coventry. I heard today that we have lost another 400 jobs in an insurance company there. Since the Government came in, around 2,500 jobs have gone in Coventry. If the Business Secretary is open to meeting companies inwardly investing in this country, which he says he is, will he come to Coventry to see the investment problems we have? We have nothing to take back to those people who have lost their jobs. I say to him that he should have the confidence and courage of his convictions and stand up to the Treasury and his so-called coalition partners, because things are going to get worse, and he faces returning here with his whimpering excuses to his own increasing embarrassment.