Packaging: Extended Producer Responsibility

Sarah Dyke Excerpts

Thursday 27th November 2025 Westminster Hall

[Sarah Dyke (Glastonbury and Somerton) (LD)]

It is a pleasure to serve with you in the Chair, Ms Lewell. I congratulate the hon. Member for Gower (Tonia Antoniazzi) on securing this important and timely debate, and on her excellent speech. I thank all hon. Members for their contributions.

The Liberal Democrats welcome the Government’s desire to make manufacturing and packaging more sustainable, minimise waste and create the foundations for a truly circular economy. Limiting the environmental damage caused by waste requires us to improve our recycling of packaging. However, progress on recycling has been much slower than it needs to be, making it even more vital that we prioritise rethinking how packaging is made and processed.

The extended producer responsibility has the potential to be a key driver in securing a better circular solution for packaging waste. However, its implementation must support, rather than add additional burdens to, the producers expected to deliver it. Liberal Democrats have long been calling for a deposit return scheme for single-use drinks containers as it would obviously improve recycling levels and environmental standards, yet the current approach to EPR raises significant unease about the unpredictability of escalating costs for producers. That will particularly impact the financial viability of many independent businesses across the country, putting their future viability at risk.

As a party, we recognised that the previous system was not fit for purpose following the Environmental Audit Committee’s inquiry, and supported its recommendations to incentivise better recyclability and transparency of products to help the transition to a circular economy. The reform brought forward by DEFRA will alter the way that local authorities are required to manage household recycling. It is therefore important that local authorities’ role in the scheme is supported, as they are once again being asked to do more while receiving ever-decreasing levels of funding from central Government. With the EPR packaging payment scheme having started last month, the Government have estimated that the shift in cost from local authorities to producers will total over £1.2 billion in its first year.

I welcome the Government’s commitment to reinvest that revenue to improve local recycling infrastructure during EPR’s first year. However, EPR currently lacks a mechanism to ringfence funds and ensure that they are all invested in that infrastructure. Despite PackUK having informed local authorities that they will receive lower payments for a failure to do so, there is great concern within industry that, in future, funds will be redirected to replace central Government spending, threatening the Government’s ultimate ambitions for EPR. Without a firm guarantee to ringfence a certain percentage of funds to be invested in local recycling services, Somerset council, where the Liberal Democrats are now clearing up the mess after 14 years of Conservative maladministration and which, like many local councils, is facing financial difficulty, will be unable to achieve its goal of increasing the county’s recycling rate to 60%.

I am fortunate to represent a constituency with a thriving food and drink sector. Businesses in Glastonbury and Somerton contribute over £29 million annually to our rural economy, supporting 101 pubs and providing employment for over 1,200 constituents. However, the introduction of the EPR in its current form has the potential to erode the profit margins of those vital businesses, forcing them to raise their prices beyond the point their customers can afford, risking the viability of their businesses.

Those concerns have been repeatedly echoed by local brewers and distillers such as Glastonbury Brewing Company and Somerset Spirit in Castle Cary, which, like many others, are having to grapple with serious financial pressures as a consequence of the Government’s increase in employer national insurance contributions and rising business rates, in addition to EPR.

I remain concerned about the negative impact that the current approach to EPR will have on our hospitality sector, in particular our pubs. Glastonbury and Somerton, as I have just said, is home to a wide and thriving publican community. Those pubs are more than just businesses; they are important pillars of our towns and villages. They bring residents together, create jobs and drive rural growth. A leading example that springs to mind is Curry Mallet’s community pub, the Bell Inn, whose existence has always relied on the generosity of its local community. I pause here to congratulate the community group involved in reopening the Bayford Inn, formerly known as the Unicorn, as a community-run pub in Wincanton, and to wish it every success.

The introduction of EPR may become, as UKHospitality has identified, “a margin killer” for the sector. DEFRA’s approach to EPR has been designed to make businesses responsible for the waste packaging that enters the household recycling stream, but in the case of pubs, their packaging and bottles never leave their premises and they are disposed of through private waste contracts. Consequently, pubs now face a double charge for packaging waste—once through their commercial waste disposal contracts and again through EPR charges having increased the cost of supplies from producers—because the current framework does not exempt non-household waste streams. That means that rural pubs, such as the Catash Inn in North Cadbury, now face being burdened with further charges of up to £2,000 a year because of EPR, adding to the crippling costs being levied against them. As a result, the Liberal Democrats have urged the Government to consider exempting pubs from EPR and allowing time to review the scheme’s scope and timeline. That would, I hope, avoid further damage to our already struggling hospitality sector.

As I have mentioned many times in this place, the UK cider industry is one of our nation’s most distinctive and successful manufacturing sectors, rooted in our rural economy. In the south-west, the cider industry contributes more than £270 million a year to the regional economy, supports more than 5,700 jobs and sustains numerous family farms, with Somerset—of course—the historical and spiritual home of British cider making. My constituency is home to a number of excellent cider makers, including King Brain cider in Little Weston, Tricky Cider in Low Ham and Harry’s Cider in Long Sutton, in addition to wonderful orchardists such as Julian, Diana and Matilda Temperley of Burrow Hill cider farm, who have cultivated their orchards for many decades.

Cider makers are generally pretty supportive of a greater circular economy. However, the charges that DEFRA confirmed in June of this year are a real threat to our cider producers, because glass packaging is charged at £192 per tonne, which is one of the most expensive rates in Europe. Given that context, small and independent cider makers are having to decide whether they can continue to use glass to package their produce in the future and keep their businesses viable at the same time. For cider makers in my constituency, that fee equates to about 5p for a 500 ml bottle of cider, and up to 12p for a 750 ml bottle.

Although EPR is intended to promote sustainability, the way it has been implemented will have detrimental financial impacts on independent cider producers who use entirely recyclable packaging and, ironically, could result in them pivoting to use a less environmentally friendly material such as plastic, which has a lower fee, to avoid those exorbitant costs. The introduction of EPR in its current form, when combined with rising employment, energy and raw material costs, already eroding margins, and the forthcoming deposit return scheme, poses a significant threat to our cider industry’s future. Given its economic importance to Somerset, that will be a devastating financial blow for the many fantastic drink businesses in Glastonbury and Somerton. The Liberal Democrats have been consistent on this point: EPR’s fees and implementation must be both fair and sustainable. With producers facing substantial added costs, they need to be properly supported during the transition to a more circular economy, not punished.

Yesterday’s Budget was a missed opportunity for the Government to demonstrate their support for our hospitality sector by cutting VAT, energy costs and employer national insurance contributions. The Chancellor decided to forgo further support and to levy additional taxation on our pubs, breweries and cider makers by bringing alcohol duty in line with inflation, putting more pubs and breweries at risk of closing their doors for the last time.

We are wholly supportive of the Government’s intention to tackle waste by improving recycling processes, but we remain unconvinced that the introduction of the EPR in its current form will achieve the desired goals. By creating a system that will impose unaffordable added costs on producers, the Government run the risk of forcing them to use cheaper and less recyclable materials or else jeopardising the viability of key local businesses that are driving growth—something that the Government should be committed to protecting.

--- Later in debate ---

[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.