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

Baroness Jones of Whitchurch Excerpts

Monday 8th February 2016 Grand Committee

[Baroness Chisholm of Owlpen (Con)]

Before I explain the specific changes, I remind noble Lords why the Government are amending these regulations or, to be precise, deregulating. The Government remain committed to reducing burdens on businesses—none more so than in the waste sector. Today, we are considering the important topic of packaging. We all use packaging in our day-to-day lives and it serves many essential purposes. These include keeping our food fresher for longer, protecting products from damage and providing security. For instance, the humble cucumber can have its shelf life extended by up to 14 days with proper packaging. Vacuum-packaging and shrink-wrapping can keep meat fresher for twice as long, and resealable packs prevent foods such as cheeses from drying out.

Packaging therefore has a key role to play in the prevention of waste. In addition, at the end of its useful life, packaging can be recycled into a number of new products including clothing, chairs, car parts or construction materials, and there is closed-loop packaging recycling such as bottle back to bottle. Like the valuable role of packaging, the changes we propose are equally important. They are deregulatory and part of this Government’s ongoing commitment to cutting unnecessary red tape. These particular changes stem from and build upon the earlier Red Tape Challenge initiative, and have the potential to deliver a net benefit to businesses of about £20.4 million over the next 10 years.

We know that around 10.38 tonnes of packaging were placed on to the UK market in 2013, and 64% of our packaging is currently recycled or recovered each year. Although it is difficult to be sure of exact costs for the financial damage of improperly disposing of packaging waste, we know that local authorities spend nearly £798 million a year clearing up litter, of which about 30% is packaging in some form.

Turning to the legislative changes, as I said, the Government want to do ever more to reduce waste and encourage the recycling of valuable secondary resources such as packaging. Importantly, we also want to streamline the processes that packaging producers have to go through to adhere to regulations. There are four main proposed changes. First, the removal of operational plans will remove the requirement for packaging compliance schemes, or directly registered producers of packaging, to provide operational plans. This change, subject to full take-up by industry, will reduce significantly administrative burdens, with a potential saving to business of up to £5 million over 10 years.

However, in order to ensure that packaging compliance schemes continue to function efficiently and effectively, we have made provision to retain some key safeguard elements by incorporating these within revised conditions of approval. There are three retained conditions in respect of compliance schemes, and they will ensure that our environment agencies are able to monitor the accuracy of information provided by scheme members; that compliance schemes acquire packaging recovery notes, or PRNs, and packaging export recovery notes, or PERNs, in a manner that least hinders the ability of operators to purchase them; and that compliance schemes preserve sufficient financial resources to maintain the necessary expertise to acquire PRNs or PERNs.

The second proposed change is to the approving body. This change will transfer the responsibility for the approvals process for packaging compliance schemes from the Government to the appropriate agency. Currently, the regulations require Defra to approve a packaging compliance scheme and for one of the environment agencies to register the scheme. Although this is a small transfer between government bodies and a small additional function for the agencies, the change will put both the approval and registration processes directly into the hands of those with the most appropriate expertise to best assess applications.

The third change is the delegation of sign-off arrangements. This will allow an approved person in a packaging business to delegate their responsibilities for signing off reports. This will remove a significant burden on business and will ensure that the authorisation for the signing of reports rests with the person who is the most appropriate and knowledgeable in the organisation. A quality assurance backstop will be put in place that requires the appropriate environment agency to be notified so that appropriate checks can be carried out.

The fourth change is the one-stop shop for packaging scheme application approvals. This will provide operators of packaging compliance schemes based in both Great Britain and Northern Ireland with the right to apply for approval from one UK approving body. This is in contrast to the present arrangement, where operators face the significant burden of having to make applications to two bodies. It will also allow the Northern Ireland Environment Agency to act on behalf of the British agency and vice versa.

The Government consider that the changes proposed in the order provide a significant opportunity for businesses to reduce their administrative burdens and costs. These changes will allow even greater focus by industry and regulators on what really matters: increasing our recycling rates, reducing waste, protecting our environment and continuing to build an economically strong and ever-more-resilient waste industry. I therefore commend the order to the Committee.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I am grateful to the Minister for introducing the amended regulations. On the face of it they appear to make sense. Certainly, the changes to the approving bodies, the extended sign-off arrangements and the one-stop shop for the devolved nations are broadly welcomed and have clearly received considerable support during the consultation. It seems that the claims of savings that will be made by these changes are slightly overegged, but I take the point that there is an established way of calculating such savings and I am not going to quibble about the methodology at this point. That is a matter for another day.

I have two main questions arising from the proposals. First, they remove the requirement to produce an operational plan, as the noble Baroness outlined. I appreciate that the current requirements may be unwieldy and overdetailed, but is it not probable that removing the operational plans altogether also removes a major discipline and pressure on packaging producers to comply with their obligations under the EU directive?

We all acknowledge, as did the noble Baroness, that the priority is to increase our rates of packaging recycling, so how does the complete removal of the operational plan help that? Might we not be better off replacing it with a simplified format that achieves the same objectives? How will its complete removal impact on the monitoring of performance and compliance of individual companies? The noble Baroness referred to that, but perhaps she will enunciate it a little further. Also, would we not be wiser to delay the changes to these regulations so that we can take account of the proposed extension of producer responsibility schemes in the Commission’s new circular economy package which relates to these measures?

Secondly, what more is being done to ensure that producers cover the full cost of processing their packaging waste? As I understand it, unlike the rest of Europe, in the UK, the producers’ fees cover only about 10% of their waste costs. As a result, a disproportionate cost for collecting and recycling falls on local authorities. This, in turn, means that much of the cost is met by taxpayers rather than the product manufacturers. This goes against the principles of producer responsibility as originally envisaged by the EU. What more are the Government doing to ensure that the costs fall where they belong: at the door of the manufacturers? What further pressures can we bring to bear to encourage excess and unnecessary packaging to be designed out before goods hit the marketplace in the first place?

This is a policy area where we cannot afford to be complacent, because we still have some way to go before we meet our EU targets. Therefore, it would be helpful if the Minister could make it clear what new levers will be introduced to drive up compliance and innovation in the sector. I realise that these latter points are slightly wide of the content of the new drafts before us today. Nevertheless, they are important and I look forward to her response.

[Baroness Chisholm of Owlpen]

My Lords, I am most grateful to the noble Baroness, Lady Jones, for her remarks and for the fact that she broadly approves of what we are trying to do.

As regards operational plans, any producer who does not comply with their obligations will face enforcement action by the Environment Agency. We feel that the current operational plan does not add to the value of its function. We are very conscious of the circular economy in relation to recycling. Any amendment will not come into force until 2020 at the earliest. These deregulatory changes will reduce the burden on businesses ahead of that. I hope that that answers the noble Baroness’s questions. These additional regulations will allow the Environment Agency further to increase its focus on tackling those who may seek to skirt around or deliberately evade their obligations.

Another piece of inspiration has come from behind me. We acknowledge that producer responsibility costs do not all fall on producers, as they do in Europe, but our market-based system delivers comparable recycling rates. Does that answer the noble Baroness’s question?

[Baroness Jones of Whitchurch]

I was suggesting that the cost is falling on the taxpayer, because local authorities have to do the collection rather than the product manufacturers. Is there anything more we can do about that?

[Baroness Chisholm of Owlpen]

I may have to write to the noble Baroness to make sure that I get that exactly right for her. I commend the regulations to your Lordships.