- Committee (5th Day)
- 2:32 pm
- Relevant documents: 3rd Report from the Delegated Powers Committee, 4th Report from the Constitution Committee
- Schedule 8: Deposit schemes
- Debate on Amendment 133 resumed.
- My Lords, it is a pleasure to follow the noble Baroness, Lady Jones of Whitchurch, even after a five-day interval and in a debate truncated by a perhaps now unnecessary withdrawal of a number of noble Lords. For the convenience of the Committee, I remind everyone that we are speaking about amendments that are all about the long-awaited and much-delayed bottle deposit scheme for England, an area in which we are notably world leading in foot dragging.I shall give a few statistics. Ten other countries in Europe are operating these schemes, with bottle-recycling success rates running from an outstanding 98.5% in Germany, where of course they have had lots of practice since they started in 2003. Even down at the bottom of the pack, Estonia has a very respectable—certainly by our standards—83.7% bottle return rate. That is why Amendment 133, which sets a deadline for implementation, is so important, and I would have attached my name to it had there been space. I agree with the noble Baroness, Lady Jones, that it should be earlier still; it could have been delivered years ago, but January 2023 is practical. It certainly should not be left outside the term of this current Government—assuming of course that they continue for that long.I want to speak in support of all the amendments in this group, with the partial exception of Amendment 134B, which would exempt small brewers. That is not because I do not think we need to consider such small producers, but rather that Amendment 134A in the names of the same noble Lords, the noble Viscount, Lord Trenchard, and the noble Lord, Lord Berkeley, is broader and more useful, covering all kinds of producers. There clearly needs to be some easy and simple way for start-up businesses, such as brewers or soft drink or juice producers, to access the scheme. One route might be to require larger companies to allow smaller companies to piggyback on their schemes.I will focus my contribution on Amendment 134, which appears in my name. I thank the noble Baroness, Lady Jones of Whitchurch, for her expression of support for the amendment. As with the earlier amendment on nappies, I declare the support from the aluminium industry association, Alupro, in preparing and discussing this amendment. I am sure that many noble Lords are aware that, for all the UK’s inadequate performance on recycling, it does relatively well in recycling aluminium compared to other materials, for reasons including the value of the material, with aluminium packaging recycling reaching its highest ever rate in 2020, with 68% of the material placed on the market being recycled. That includes 82% of all aluminium beverage cans. Of course, this is a material that can be recycled indefinitely, unlike most plastic.We should not forget that the best option, at the top of the waste pyramid, is to reduce packaging materials and have no container at all, followed then by reusing packaging. But for recycling, aluminium is a good choice. Alupro put it to me—and I see the force of the argument—that a scheme with a flat deposit amount for all containers, regardless of the size of the material, would lead to switching from multipacks of aluminium cans to larger format plastic bottles, due to the cumulative cost of the deposit fee on multipacks. For example, a 20p flat deposit fee would add £4.80 to a 24-pack of cans, yet the deposit fee for the same volume of liquid in four plastic bottles would be just 80p. A 2019 poll of consumers found that a 20p flat deposit fee would encourage more than 60% of individuals to switch to large PET bottles at the expense of aluminium.
- My Lords, I declare my interests as stated in the register. I am pleased, as always, to follow the noble Baroness, Lady Bennett of Manor Castle, although I regret that the mover of the lead amendment, the noble Baroness, Lady Jones of Whitchurch, spoke five days ago; I had to look up Hansard to remember what she said. I have some sympathy with her Amendment 133, and agree that deposit return schemes should be introduced as soon as possible. I also believe that it is crucially important to get them right. It is worrying that Scotland has rushed ahead with its own scheme in an area where we definitely need UK-wide compatibility.I support Amendment 133A in the names of the noble Baroness, Lady Jones, and the noble Viscount, Lord Colville of Culross, and others, that the scheme should, at a minimum, apply to PET, glass, aluminium and steel containers of volumes under 3 litres. I was a non-executive director of Lotte Chemical, at Wilton, on Teesside, for nine years, until the end of 2019, when the company was taken over by Alpek Polyester. It holds a 70% to 75% market share in the UK and Ireland as the leading supplier of polyethylene terephthalate. The plastics tax is likely to disadvantage PET producers in favour of glass and aluminium producers, with the unintended consequence that producers will switch from PET to glass and aluminium containers, which have a carbon footprint four or five times higher than PET.The noble Baroness, Lady Bakewell of Hardington Mandeville, proposed exemptions from the plastics tax in her Amendment 141. The noble Baroness, Lady Jones of Whitchurch, expressed concern that the deposit return scheme might lead producers to switch from aluminium or glass to plastics. My concern is the reverse: besides the much lower carbon footprint associated with PET, does the noble Baroness really want to go back to the days when we cut our feet on discarded glass bottles on the beach?The answer is not to penalise PET but to introduce a deposit return scheme as good as Germany’s, where 98% of PET bottles are collected for recycling. We have a long way to go. Germany is not often held up as an example of a unitary state with centralised powers, but the successful German deposit return scheme is a national scheme applied in all the Länder identically. If the United Kingdom is to prosper and global Britain is to succeed as we expect and hope, it follows that the leaders of our devolved authorities might be less impatient and more willing to work together to agree the details of one national scheme across the whole United Kingdom.
- 2:45 pm
- Amendment 134A would allow the DRS to take account of the size of the producer when setting its fees and scope, allowing the Government to vary the scheme accordingly. Amendment 134B would exempt the smallest brewers, which produce less than 5,000 hectolitres a year—the equivalent of 900,000 pints, or enough beer to serve 15 community pubs. This is in line with the Government’s current small brewers relief scheme, which allows small brewers to pay a proportionate amount of duty to the Treasury. This Bill will create a scheme administrator called the deposit management organisation, which would be responsible for the operation of the DRS. Amendment 138A would provide a safeguard to hold this body to account for how it treats and takes account of small producers.
- I hope that my noble friend can consider and address the issues raised in these amendments.
- The noble Baroness, Lady McIntosh, and the noble Lords, Lord Berkeley and Lord Lucas, have withdrawn, so I call the noble Lord, Lord Carrington.
- My Lords, I add my support to Amendment 134 proposed by the noble Baroness, Lady Bennett of Manor Castle. She has put the case for a variable rate dependent on container size most forcefully. There is nothing I can add without repetition, so I would like the Minister to comment on the reason given by the Minister, Rebecca Pow, in the other place. When she gave evidence to the Environmental Audit Committee, Rebecca Pow, who is the Minister responsible for the DRS, said that the department was inclined to introduce a variable rate of deposit.However, Defra currently wants to leave it to the scheme administrator to make the ultimate decision. The concern is that the administrator may not assess the need for a variable deposit independently and impartially, as it will be run by the industry itself, with all its vested interest to take into account. Can the Minister assure us of the independence of the administrator and how the appointment process for the administrator will work? A variable rate should be mandated in the legislation at this stage to avoid these potential problems.
- My Lords, I rise to speak to Amendment 133A, to which I have put my name, which was tabled by the noble Baroness, Lady Jones of Whitchurch, and is also supported by the noble Viscount, Lord Colville of Culross, and the noble Baroness, Lady Boycott. This amendment is about what is known as an all-in deposit scheme, which means it catches as many items as possible. The noble Baroness, Lady Bennett of Manor Castle, is absolutely right that our priority ought to be to reduce waste in the first place and so, if we are going to reduce waste, we need a comprehensive deposit scheme. We must stand back and look at what we are trying to do, which is to protect the environment. The bigger and wider the deposit scheme, the more chance we have of keeping the environment in the state in which we would like it to be.However, I know this causes an awful lot of worry for those who have set up return or deposit schemes at the moment, have invested money in them and do not want to change. It is the nature of industry that there will always be vested interests, but I hope that my noble friend will stand back from them and say that this is needed in the interests of the environment.My noble friend Lord Trenchard rightly mentioned that any scheme must be pretty much the same across the whole United Kingdom. However, I challenge him on one thing. He said that Scotland had rushed ahead; no, I think that England is the laggard. Why should Scotland have to wait until England finally gets its house in order and its act together? Scotland has once again led the way, and it is time that England got on and followed suit.Getting a UK comprehensive plan will be very important. There was a consultation on an all-in deposit scheme in 2019, which was overwhelmingly endorsed as the right way forward. All I ask my noble friend the Minister is that, when he introduces a scheme, he keeps it as simple as possible; I ask him please to use the KISS principle with this if he is going to get us to participate in this scheme and make it work in the best way possible.
- My Lords, I have put my name to Amendments 133 and 133A because the DRS is one of the most important parts of this Bill. It will have a seismic effect on consumer behaviour, improve our environment and strengthen the circular economy. I and many noble Lords have already spoken about the blight of litter. Two-thirds of roadside litter is estimated to be made up of drinks containers.The scheme is so important that it needs to be wider in scope and swifter in implementation. The present target of late 2024 at the earliest is far too slow for such an important measure. It was first announced by Michael Gove in October 2017; the initial consultation promised implementation at the start of 2023; now we are told it will be the end of 2024 at the earliest. This chronology means that the present target for the much-anticipated DRS will mean at least six and a half years before implementation, as the noble Baroness, Lady Jones, said.I know this scheme is complicated, but it is so important that all speed is needed to implement it. I ask the Minister to listen to the words of his colleague Michael Gove who, in praising this scheme in his 2019 speech at Kew Gardens, cautioned:“Time is running out to make the difference we need; to repair the damage we as a species have done to the planet we have plundered.”Does the Minister agree with the Environmental Audit Committee, which described the 2024 target as “disappointing”?I also support Amendment 134 as the Government need to ensure that the scope of the scheme is as wide as possible, as the noble Earl, Lord Caithness, said. They need to embrace the all-in scheme; I can see why the on-the-go 750-millilitre criterion has been posited as an option, but a recent survey of stakeholders in the beverage container sector, which includes supermarkets, manufacturers and consumers, shows 69% support all-in while a mere 15% support on-the-go. To quote Michael Gove’s Kew Gardens speech again,
- My Lords, we very much agree with what the noble Viscount, Lord Colville, said about the potential of this deposit return scheme to show us to be a global frontrunner as we move towards a more circular economy. We also very much support the opening amendment moved by the noble Baroness, Lady Jones of Whitchurch, which highlights the laggard nature of the Government in bringing forward this DRS, with the latest consultation showing that it will not come in until the end of 2024. We absolutely agree with her that the Government ought to get on with this by next year as an initial step.We agree with almost all noble Lords that this must be an all-in scheme. There are costs to that, which the noble Earl, Lord Caithness, highlighted; another is the cost to local councils, as with an all-in system you remove aluminium, which is one of their most valuable recycling assets. However, we very much believe that the benefits outweigh those costs. We must resist those voices saying not to go down the all-in route. The Government’s impact assessment shows that there are very strong benefits to all-in, in the amount of recycling and the impact on cutting littering. That is important, but for me the issue mentioned by the noble Viscount, Lord Trenchard, about consistency with Scotland is the strongest case for all-in. We know where the Scots are going with their DRS; we feel very strongly that, to get the maximum benefits from DRS, there should be consistency with Scotland.On that basis, although I listened to the very articulate arguments put forward by the noble Baroness, Lady Bennett of Manor Castle, on the case for a differential rate for sizes, I am not sure I want that put in the Bill at this stage, as there is an issue about ensuring that consistency with Scotland is uppermost in our mind. I therefore wish the Government to look at that again but do not support that going in the Bill at this stage, although I understand and accept the arguments she made. I hope the Government will look at them carefully. I look forward to the Minister’s reply.
- My Lords, deposit return schemes are another important reform introduced by the Bill to maximise our resource productivity. It was heartening to hear support across the House for their introduction.This Government are determined to crack down on the waste and carelessness that destroy our natural environment. The noble Baroness, Lady Jones of Whitchurch, was right to point out in her opening speech that in our manifesto we committed to introduce a deposit return scheme this Parliament. We remain absolutely committed to delivering on that commitment. I thank her for Amendments 133 and 133A. We are currently analysing responses to our consultation from environmental NGOs, businesses and trade organisations on the deposit return scheme, which consulted on implementation timelines for 2024, the scheme design and the exact responsibilities of a deposit management organisation. This also included proposals on the size of containers and materials to be included. We will publish our response as soon as possible.I appreciate that noble Lords are keen to see the introduction of a DRS for drinks containers introduced as soon as possible—so am I. But realistically, particularly following the impact of the pandemic, we need to make sure we balance this anticipation with the needs of businesses, which will need time to adapt their processes to a DRS. The impact assessment for this measure identified that the net costs to businesses were likely to be £266 million a year, so we need to make sure that we fully consider the time needed for them to adapt.
- 3:00 pm
- The recent consultation explored the implications of different timelines on businesses. Businesses have been clear that they need some time to ensure that scheme infrastructure and operational contracts are in place before a scheme can be introduced. But, again, to be clear, we remain committed to delivering a DRS in this Parliament.
- In response to Amendment 133A, I am pleased to confirm to the noble Baroness, Lady Jones of Whitchurch, that Schedule 8 already makes provision for any item to be specified as a deposit item for the purposes of a DRS. This includes specifying the material from which the item is made, as well as the size of that item. In response to questions raised by the noble Baroness, Lady Bennett, and my noble friend Lord Trenchard, our recent consultation proposed that the scope of the deposit return scheme should include polyethylene terephthalate bottles, steel and aluminium cans and glass bottles. I know that the noble Baroness, and many others across this House—including the Government—want to see ambition at the heart of a future DRS. I am therefore also pleased to confirm that options for future schemes are broad and could look at a range of items such as food pouches, coffee cups and even mattresses.
- Regarding Amendment 134, tabled by the noble Baroness, Lady Bennett of Manor Castle, I am happy to say that Schedule 8 allows provision to be made in regulations to set either a fixed or variable deposit rate, as requested by the amendment of the noble Baroness. The case for a fixed rate is that it will help ensure simplicity and might be easier for consumers to understand. However, a variable rate deposit level could be set to reflect the size of the drinks container and might help reduce the impact on sales of containers that are part of a multipack, for example. Ultimately, in designing this part of the Bill, we wanted to allow the deposit management organisation to have the flexibility and control in setting the deposit level to whatever is most helpful for it in meeting statutory collection targets. I hope that the noble Baroness will agree that this is the most pragmatic approach.