Producer Responsibility Obligations (Packaging and Packaging Waste) (Amendment) Regulations 2025
Debate between Lord Katz and Lord Roborough
Lord Katz (Lab)
I thank all noble Lords for their valuable contributions. I am glad to have the opportunity to close this important debate and to have heard a range of views. It is clear that we are all passionate about this topic and I acknowledge that the principles behind PEPR, which began in 2024 before this Government but which we are carrying on, are taken as a good thing across the Committee. We are trying to meet its aims with sincerity, working with industry, local authorities and waste collectors.
I turn to the comments and questions raised. The noble Baroness, Lady Redfern, asked about the impact on small businesses. It is worth noting that many PEPR schemes around the world offer no exemptions from their obligations for small businesses, whereas in the UK we have some of the most generous measures for small businesses across any packaging scheme globally. The exemptions that we are applying in this scheme will apply to approximately 70% of businesses supplying packaging in the UK, which recognises that we want to support small businesses rather than price them out of the market, as the noble Baronesses, Lady Redfern and Lady Grender, referred to.
A number of contributions focused on the concerns raised by the Secondary Legislation Scrutiny Committee, particularly around whether regulators would have sufficient resources to carry out their functions effectively. The charges in this scheme were calculated based on the expected activities required effectively to undertake regulatory duties, using assumptions on the time these would take based on the experience of regulating similar sectors and the fixed cost of delivery. As the system embeds, regulators will continue to review operational delivery costs to ensure that there is effective recovery. Environment Agency enforcement resource is covered by grant-in-aid funding from Defra.
As well as provision to increase charges by inflation with the consumer price index, there was additional regulatory provision to allow regulators to seek approval to supersede the charges by introducing a charging scheme made under the Environment Act 1995, the Waste and Contaminated Land (Northern Ireland) Order 1997 or the Waste Management Licensing Regulations (Northern Ireland) 2003. Defra will continue to work closely with regulators on this topic.
The noble Baroness, Lady Bennett, in particular raised the question of having sufficiently robust information on producers’ recycling to make a fair assessment. Draft guidance on reporting requirements will be published on GOV.UK before Christmas, ahead of the regulations coming into force. The regulator does not usually stipulate the specific documents required but will provide examples and principles, as every producer is different and may therefore have access to different evidence. Guidance will develop over time to reflect real-life examples presented by producers during compliance checks. For example, a producer could obtain written confirmation from their reprocessor outlining what percentage of the material collected and sent for recycling was actually recycled. This would need to outline the reprocessor’s method of determining this value and the regulators would expect the producer to have a documented process in place for validating this data. While these requirements apply only to the reprocessor and not the producer, these regulations put the burden of proof on producers as they are benefiting from the off-set.
In short, producers must maintain evidence that their closed-loop packaging waste has been recycled into food-grade plastic material under the closed loop system. There is no requirement for this evidence to be third party verified. Regulators will carry out their statutory duty to monitor compliance, as you might expect. I think the noble Baroness, Lady Redfern, raised that issue.
I turn to some of the wider comments of the noble Baroness, Lady Bennett, which she raised when we last discussed orders on plastic waste packaging and recycling in Grand Committee. She is right to hold the Government’s feet—indeed, everyone’s feet—to the fire on creating a true reuse circular economy. To be clear, when I spoke about once-in-a-generation reform, I was not talking specifically about this SI; this is a good SI, but this is not the be-all and end-all. I was talking about the system.
I want to be clear that the Government are committed to transitioning to a circular economy, and reuse will be an important part of that journey. To help make that happen, we will be launching a call for evidence early next year on reusable packaging. This will help us to understand what support and policies are needed to increase reuse. For instance, we are encouraging the glass industry to seek to reduce the cost impacts of PEPR through a transition to reuse and refill, something that used to be commonplace in the UK and continues to be in many other countries.
That brings me on neatly to some of the issues around glass and reuse. The noble Baroness, Lady Grender, and the noble Lord, Lord Roborough, both raised issues on dual-use packaging not being addressed in the SI. I want to reassure the Committee that the Government are taking this seriously. Minister Creagh met with leaders from industry groups affected by the dual-use issue earlier this year, and we recognise the strength of feeling. But we also acknowledge the need for a system that can be effectively monitored and enforced, given that the impact on the PEPR fees for packaging remains in scope of fees.
Workshops have been held over recent weeks to urgently and carefully identify options which address the issues, while maintaining the objectives of the scheme. Sector-specific working groups will test these proposals further. It is important to note that any amendment that exempts more packaging will increase fees for the material that remains obligated to the system. This is because the total cost producers need to cover collectively will not be affected by any such amendment. If there is less obligated packaging, the fee per tonne will increase.
Specifically on glass, there is a question about the problem of the cost in the scheme being calculated by weight, not unit. It is important to recognise that waste management costs are largely driven by weight. We have also taken account of other factors that influence collection costs, including the estimated volume of each material in bins and collection vehicles. It remains the case that glass is a heavy material with a low resale value. A unit of glass packaging costs more for local authorities to manage as waste than an item made of more lightweight and high-value materials.
On switching, major food and drinks producers have told us their view that there is little risk of short-term materials switching, owing to long lead times in changing packaging. Major supermarkets have categorically said that PEPR is not their main driver for changing packaging. Decisions on changes are likely to align with the policy objectives of moving to easier-to-recycle packaging, which, from year two of PEPR, will see a reduction in fees through eco-modulation.
There was a question from the noble Baroness, Lady Grender, on the impact of fees on differential sectors and an impact assessment. In October 2024 the Government published a full assessment of the impact of the PEPR scheme for packaging, including cumulative costs. This considered a wide range of different costs to businesses and included estimates of expected net annual cost to business for those obligated producers. This cost to business had not been split by the sector in which the producers and businesses engage in market activity, given the data’s availability, the commercial nature of data limits and the ability to provide a sectoral level assessment of impacts.
I assure noble Lords that the Government continue to work closely with industry to understand the impact of the upcoming fees on business as the scheme is implemented and rolls out. We are committed to the continuous improvement of the scheme and, where appropriate, will seek to adjust regulatory settings to address feedback from stakeholders.
That brings me to the end of most of the questions that were raised by noble Lords. The noble Baroness, Lady Bennett of Manor Castle, raised—I do not know what to call it—the atrocious illegal waste site on the A34. I want to reassure noble Lords, as it is obviously a topic of concern to many, that the Environment Agency is now working to ensure that the public and the environment are protected from potential impacts and to pursue the criminals responsible. Following new information on the risk of fire, planning work has begun to clear the site as soon as possible on a wholly exceptional basis. The Environment Agency and local partners are now working through the most effective way to manage this work. I confirm that a 39 year-old male was arrested on 25 November in relation to this and investigations are ongoing, so I cannot comment any further.
The noble Baroness, Lady Bennett, mentioned the situation in Wigan; I do not have anything about that in my notes, but I am happy to write to her with an update. This is of concern to those in Wigan and of as much concern to us as the situation in Kidlington, which was the case that, perhaps unfairly, attracted the most attention and news coverage. One awful and illegal fly-tip is as bad as another in my book, so I am happy both to write to the noble Baroness to update her on the situation and to ensure that we are able to keep noble Lords abreast of it. I hope that I have covered most of the issues—
Lord Roborough (Con)
I understand that this may be beyond the Minister’s notes today, but I asked whether there will be an opportunity to use technology more effectively in compliance and in enforcing these regulations. I am happy for the Minister to write to me on that, if he is willing, as well as on any broader opportunities for reducing the cost of both enforcement and compliance with technology.
Lord Katz (Lab)
I thank the noble Lord and apologise for missing out that question. Of course, as a principle, we are keen to use technology to make monitoring and compliance easier for everybody involved in the system. We are also keen to drive down the costs of compliance so that people can concentrate resources in the whole system on driving down waste and improving the reuse and recycling of materials. I do not have specific details, so I will undertake to talk to officials and perhaps write to the noble Lord with more detail about what we have in store there.
This amendment to the legislation is necessary to maintain the circular economy for packaging in the UK; to ensure that the key industry request for producers to be involved in running the scheme is taken forward; and, ultimately, to ensure that materials and products are kept in use for longer. I trust that noble Lords understand and accept the need for this instrument. Once again, I thank everyone for their contributions.
Small Farms
Debate between Lord Katz and Lord Roborough
Lord Katz (Lab)
I thank my noble friend for that question. I will have to write him with the details of the review. Agritech and engineering biology, such as precision breeding, are frontier growth sectors, which is why they were put in the Government’s industrial strategy that was published in June this year. We have a clear vision to make the UK the best place in the world to start growing and investing in agritech, in a safe and scientifically responsible way. To date, the farming innovation programme has supported almost 300 projects, which include a wide range of interesting uses of new technology that will benefit small farmers particularly, whether it is bio-derived fungicides, monitoring tools for dairy cow welfare or equipment to help maximise strawberry yields.
Lord Roborough (Con)
My Lords, last week BBC “Countryfile” broadcast an interview with an 82 year-old farmer who said he had considered suicide in direct response to the Government’s family farm tax. Given that the Budget makes clear the Government’s intention to press ahead regardless with a tax that dwarfs profitability, will the Minister commit to recording and publishing in a timely manner the number of farmers and family business owners who commit suicide in the run-up to April next year when the rules change? I refer the House to my registered interest as a farmer.
Lord Katz (Lab)
My Lords, this is a subject of the utmost seriousness. I cannot commit to publishing data without understanding that the data is available to be published in a correct and statistically reliable format. This is something that the Government take very seriously. The noble Lord will be aware that, since May 2024, Defra has funded the farmer welfare grant, which provides half a million pounds to support charity projects focused on improving the mental health and well-being of farmers in England. That fund runs until next March; we are currently evaluating how it works to see whether it is possible to extend and expand this fund post 2026.
In the wider NHS, we have hired 8,500 new mental health support workers, which will help access for anyone in distress. It is important that we do not politicise mental health issues across society, particularly when we have sectors that are impacted by it. This Government stand behind their farming sector. We understand that the changes that we had to make in last year’s Budget, which we have ameliorated in this year’s Budget, are tough on farming businesses, but it is important that we make decisions that put farming on a firm footing and are fair by the public finances.
Heather and Grass etc. Burning (England) (Amendment) Regulations 2025
Debate between Lord Katz and Lord Roborough
Lord Roborough (Con)
My Lords, I am very grateful to my noble friend Lord Caithness for moving this debate, which touches on many important issues. Following on from my noble friend Lord Blencathra, I had to look this up, but when we have four of a kind in a row, it is a “haul”. So we experienced a haul of Earls at the start of this debate, which is a very unusual thing.
At the heart of this debate today lies our relationship with nature and our country. It is hard to find any of our landscapes that have not been managed for thousands for years. The wildest parts of Dartmoor show evidence of intensive habitation and livestock grazing dating back to prehistory. The Flow Country of northern Scotland, with its open landscape of peat bogs, occasionally shows huge networks of tree roots that were surely harvested in prehistory and replaced with grazing. In that light, I refer the House to my registered interests as an owner of land, both in Dartmoor national park and in Sutherland. Just for the sake of clarity, I do not have any grouse. I have no grouse interests in this particular debate, apart from the fact that I enjoy going elsewhere and engaging with that.
There appears to be a presumption that, by reducing management of this land through things such as the regulations we are debating today, we are somehow helping nature. However, we need to appreciate that, if we reduce our management, we are laying ourselves open to much more damaging wildfires, as many noble Lords have pointed out today, and also to negative impacts on native species that have become dependent on this management. We are also undermining farmers who derive their livelihoods from these landscapes. Irrespective of whether these regulations are right, why does government insist on using the stick of regulations rather than the carrot of incentives?
As others have pointed out, peat covers only 8.5% of the English land area, but 80% of it is degraded. When we look at these areas, the priority should be restoration. That restoration is primarily about rewetting and eliminating cultivation; it has little or nothing to do with whether you have mature or young heather or grass on top. As long as the sphagnum moss is healthy, it is rebuilding peat, and to get the sphagnum moss healthy, the water table needs to be towards the surface. As that peatland is rewetted, it eliminates the massive carbon releases from degraded and dry peat and also allows for future carbon sequestration.
The peatland carbon code is an important financial incentive for land managers to carry out this work. However, liquidity in this market is lacking, as it remains a voluntary carbon credit. Please could the Minister update the House on the status of consultations on the inclusion of the peatland carbon code and the woodland carbon code in the UK emissions trading scheme? In that light, I also point out my interests as someone restoring peatland under the auspices of the peatland carbon code and developing new forestry plantations.
The regulations we are debating today extend existing licensing from peat deeper than 40 centimetres to greater than 30 centimetres, and from heather to grass. The implication is that the area covered increases from 430,000 hectares to 680,000 hectares. That will lead to coverage of these regulations coming further down the hill towards areas of greater population density and where fire risks are even more serious.
We on these Benches are unhappy with the existing licensing regime that prevents appropriate management, and the extension is deeply unwelcome. Noble Lords have discussed that managed burning is an important component of reducing fuel load, preventing wildfires from becoming so hot and entrenched. In 2018, the Scottish Fire and Rescue Service found that only four wildfires out of 153 reported were in managed moorland, and all of those were outside the burning season and the result of accident or arson. The 2018 Saddleworth Moor fire was on a moor with a no-burn policy and took seven different fire services 10 days to bring under control.
Discussion has also focused on the importance of managed burning for biodiversity. The latest scientific evidence from the University of York in 2023, cited by my noble friend Lord Leicester, found that
“the burning and mowing of heather supported an increased diversity of vegetation ... The study also predicted a greater number of some ground-nesting birds, many of which are red listed as being of conservation concern”.
As I have already highlighted, these are not natural landscapes any longer, and many of our threatened species rely on us to provide them with the right habitat. Heather is a plant that will establish dominance on acidic and peaty soils and, without management, crowd out everything else.
One of the arguments against heather burning is carbon emissions. The University of York study also found that, while there are carbon emissions from a fire, the regrowth took up considerably more carbon over the longer term. When wildfires enjoy an excessive fuel load, they burn hotter and get deep into the peat, releasing far more carbon. The flow country fire in 2019 released 700,000 tonnes of CO2 equivalent. That is equivalent to the annual carbon emissions of 75,000 people.
That same point about the natural dominance of heather in these landscapes is also why managed burning is so critical for grazing. Cattle and sheep need grass and young heather to graze and gain nothing from veteran, woody heather. To support our farmers, we need to allow this managed burning. When adding in the benefits to wildfire management and biodiversity, the argument for including it within sustainable farming incentives is very strong. We read in the papers that new sustainable farming incentives are likely to focus more on upland farming, which was disadvantaged in the earlier SFIs. Given the many benefits of the managed burning of these upland landscapes, could I ask the Minister whether it is possible that a component of some of these SFIs could be for more of this managed burning? When will we see these new SFI regulations? We were originally promised that it would be in July of this year; we are now at the end of October.
Other noble Lords have mentioned the Carrbridge and Dava fire. Without repeating their points, I would say that this fire underscored, yet again, the importance of gamekeepers, farmers and land managers, not just in putting out these fires but in prevention through muirburn. On the back of the evidence of that incident, the Scottish Government have delayed the introduction of more controls on muirburn.
My noble friend Lord Caithness mentioned the Secondary Legislation Scrutiny Committee, and I agree with his questions. In particular, would the Government be open to more integrated cross-government development of these regulations? The Minister is today responding for the Government, but it is not clear to us that the fire service, through MHCLG, is adequately involved in setting and implementing these regulations.
The point which illuminates the entire debate on the Motion that my noble friend has moved is the lack of a full impact assessment, including on wider government priorities. Those who have contributed today have demonstrated the many benefits of heather and grass burning, if managed and done correctly. It is unclear what real merits there are in restricting it further. The noble Earl, Lord Lytton, made this point most forcefully: where is the science? Surely a pragmatic, rational assessment could only conclude that it is in everyone’s interest to encourage the right kind of burning and, in instances where there is no other financial incentive to manage open land in this way, to provide those incentives.
We on these Benches fully support my noble friend Lord Caithness in this regret Motion. The extension of the burning regulations in this way appears to be unscientific and politically motivated. The Minister has been given a lot of questions to answer in this debate, and if he is unable to find the answers or does not have the time, I very much encourage him to commit to write to us.
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, I thank the noble Earl, Lord Caithness, for introducing this Motion and all noble Lords who contributed to this debate. I am particularly grateful to the noble Lord, Lord Roborough, for telling us that we have had a haul of Earls from the Back Benches. I did not realise that there were collective nouns for different numbers of Earls, but in all sincerity I thank them not only for their contributions today but for their years—and, I am sure, in some cases, decades—of collective stewardship of our rich tapestry of habitats, which makes our countryside such a source of pride and one of the things we are most admired for throughout the world.
I appreciate the concerns raised particularly around the potential for increased wildfire risk because of these new regulations, which has been the focus of much of the debate. It is a valid concern, and I want to be clear that we are in no way dismissive of it: it is one that the Government have taken seriously throughout the development of this statutory instrument.
Let me begin by being clear that the Heather and Grass etc. Burning (England) (Amendment) Regulations 2025 are not about ignoring wildfire risk; they are about addressing it more effectively, sustainably and scientifically. The central aim of these regulations is to protect England’s peatlands, which are among our most valuable natural assets. Here I will shamelessly steal the words of my colleague, Minister Creagh, in the other place, who calls them the UK’s rainforests. These habitats store vast amounts of carbon, regulate water flow, support biodiversity and, crucially, when healthy, are more resilient to wildfire. England’s peatlands are of huge international importance and, when healthy, provide lots of environmental benefits.
However, 80% of England’s peatlands are degraded, with rotational burning being a contributing factor in upland areas. Burning also has negative impacts on air quality and human health. Large-scale burning of vegetation releases vast amounts of smoke into the air, impacting local communities. The evidence is clear: wet, healthy peatlands are far less likely to burn during wildfires. When peat is saturated, it resists ignition, slows the spread of fire and prevents deep burns that can release stored carbon and destroy the habitat irreversibly. Repeated burning dries out the peat, alters its hydrology and makes it more vulnerable to fire. Climate change also contributes to drying out peatlands. Rising temperatures and reduced rainfall further impact the hydrology of these habitats, lowering the water table.
The noble Earl, Lord Lytton, who brought his experience of managing peatland areas in Exmoor to bear in his contribution, raised the impact on the hydrology of those peatlands. It is clear that restoring peatlands helps to raise the water table, which promotes the growth of key species, such as sphagnum moss and cotton grasses, and prevents overdominance of drying species such as heather or linnaea. Having a water table which sits close to the surface leads the site to being more resilient to the impacts of wildfire and reduces the likelihood of fire getting into the peat, causing further damage. A study following a 2019 wildfire in the flow country peatlands in Scotland suggested that the wildfire caused mostly superficial burning, except in the most degraded areas. The conclusion of this study implied that peatlands with wet conditions have the potential to help reduce the impacts of severe wildfires. We know that rotational burning can perpetuate the risks in the long term by altering the hydrology of blanket bog and making it impossible to return to its natural state. The flow country study is evidence from the field and supports the Government’s position that restoration and protection are the best long-term strategies for wildfire resistance.
Some have argued that restricting burning will allow vegetation to grow unchecked, increasing fuel loads and therefore fire risk, and we heard that in the debate this afternoon. While understandable, this concern overlooks the broader picture. First, burning is not the only tool available to manage vegetation. Mechanical cutting, grazing and other sustainable methods remain permitted and encouraged. These regulations do not restrict these practices. Secondly, the licensing regime remains in place. Where no feasible alternative exists, land managers can apply for a licence to burn specifically to reduce the impacts of wildfire. This is not a blanket ban; it is a targeted, evidence-based approach that allows for flexibility in exceptional circumstances.
This is probably as apt a time as any to refer to the noble Earl, Lord Leicester, whose conclusion referred to the discussion at the recent G7 summit, which talked about controlled burning being part of a strategy to decrease the risk of extreme wildfires. Indeed, we are not saying that burning is not the right tool in some places and for the right habitats. We are saying that, while it is a tool that works in other habitats that are at risk of extreme wildfires—one thinks, obviously, of California—it is not necessarily the right tool for all habitats, and we are thinking particularly about protecting peatlands.
Thirdly, the newly revised heather and grass management code provides clear guidance on sustainable land management, including how to manage fuel loads without resorting to damaging burning practices.
We have also taken steps to improve the licensing system itself. These aim to reduce complexity and enhance co-ordination to make the process faster, more efficient and easier to navigate for applicants. We have also removed impractical grounds as a rationale for granting a licence, such as the land being inaccessible to cutting equipment. This should be considered in all cases whenever a licence application is made to evidence why burning is the only available option, rather than the ground for application. Instead, we have introduced a new, legitimate ground for research and education, and have extended the conservation ground to include the natural and historic environment, recognising the importance of maintaining archaeological features.
Water Companies: Private Ownership
Debate between Lord Katz and Lord Roborough
Lord Katz (Lab)
I thank my noble friend for that question. I will have to write to her about whether that fine has been paid. We have been very clear through the Water (Special Measures) Act and our response to the Cunliffe review that we are absolutely going to bear down on water company executives who take unjustified profits. We have already done that. We have already fined a number of organisations and cumulatively more than £240 million in wastewater enforcement fines and redress has been confirmed by Ofwat in 2025. We are serious about tackling the state of the water sector and very clear that water companies here are meant to secure investment and keep bills down, not take profits.
Lord Roborough (Con)
My Lords, there are ongoing concerns about the financial position of Thames Water. Can the Minister please confirm that no matter what, including the special administration regime, consumers will not be forced to pay higher bills to cover failures at Thames Water or indeed any other water company?
Lord Katz (Lab)
The noble Lord will be aware there is a high bar for the use of a special administration regime but we have made our preparations and are ready for all eventualities, including applying for such a regime, if necessary. While the company is stable, we have stepped up the preparations. It is clear that if it is in serious breach of its principal statutory duties or an enforcement order is appropriate for the company to retain its licence, we will act. We will make sure that it is not at bill payers’ expense.
Water: Supply and Infrastructure
Debate between Lord Katz and Lord Roborough
Lord Katz (Lab)
I thank the noble Earl for his question. He brings our attention to a really important aspect of the water supply. He is absolutely right that we have had dry weather; I believe it has been the driest start to the year in the north of the country since 1929. Drought plans must be produced by water companies every five years. In fact, water companies are now planning to improve drought resilience to mitigate droughts that are so severe you see them only once every 500 years. We are very serious about tackling this.
I am pleased to be able to tell the House that the Water Minister, Emma Hardy, met the National Drought Group, which is convened by the Environment Agency, earlier this month to ensure that action is taken to safeguard water supply in all areas, including farming. The farming road map, which we are due to publish later this year, will help spell out how farmers can take more control of this. We have heard today from the NFU about how it is working with Defra to pilot initiatives such as on-farm private reservoirs, which would allow farmers to use their own water rather than rely on the public supply. This would be of benefit to both farmers and the wider population.
Lord Roborough (Con)
It was depressing to read that water companies are already asking consumers to ration water in mid-May, with our temperate maritime climate providing ample rainfall over the winter and with water bills at all-time highs. Do the Government believe that the Cunliffe review’s terms of reference sufficiently emphasise guaranteeing supplies to avoid this situation in future?
Lord Katz (Lab)
I thank the noble Lord for his question. Sir Jon Cunliffe is leading the Independent Water Commission in a once-in-a-generation review of the whole water supply system, including regulation. On its terms of reference, it can go wherever it wants in its inquiries. I am sure the noble Lord, given his interest in this area, will have made his own representations in response to the call for evidence. Again, all I can say is that we have secured over £100 billion of investment to spend on improving the water supply. I wish I could stand here and say there are many more reservoirs in train instead of just one, but there are not, and we are where we are. This Government will pick up and clean up the mess the last Government left.