Glass Packaging: Extended Producer Responsibility

[Graham Stringer in the Chair]

I beg to move,

That this House has considered the impact of extended producer responsibility for packaging on glass packaging producers.

It is a great pleasure to serve under your chairship, Mr Stringer. In the UK, the glass manufacturing sector supports more than 120,000 jobs, adding £2.2 billion to the economy each year. I am immensely proud to have Beatson Clark in my constituency, which has been manufacturing glass in Rotherham for more than 270 years. It is a key local employer, and the only remaining independent UK-owned glass container manufacturer. It is also the only company in the UK that still produces amber pharmaceutical glass. After adding in the supply chain, more than 2,000 people are dependent on Beatson Clark for their livelihood.

As we move to a fully circular economy, glass is the perfect packaging material. It is infinitely recyclable, does not lose quality over time and does not release harmful microplastics into products, including the human body or the environment at large. It is easily and widely recyclable, with no degradation as part of the recycling process. Bottle banks were first introduced in the UK in the 1970s. Glass that was collected then is most likely still in circulation today.

Glass manufacture is energy-intensive, but with electric and hybrid furnaces and readily available technology there is no reason why glass cannot be a net zero product in the not too distant future, especially with Government support with infrastructure and electricity costs, as per the Climate Change Committee’s recommendations. Yet, because of the Government’s dogged decision to press ahead with extended producer responsibility, initiated by the previous Administration, we instead face the decimation of our domestic glass industry.

Job losses and the closure of sites are literally just around the corner. That is not the industry overreacting. British Glass has already received warnings from more than one beer and cider manufacturer that there is no future for glass in this country due to the EPR policy. EPR follows hot on the heels of a challenging few years for UK glass manufacturing. The energy crisis, increased costs and a reduction in trade tariffs from 6% to 0% since leaving the EU have made cheaper imported glass so much more attractive.

Holden’s Bottling company in my constituency has written to me with concerns about EPR, saying it makes the company simply uncompetitive. Does my hon. Friend agree that if EPR fees were calculated on volume not weight, it would incentivise using more sustainable materials such as glass over plastic?

I support my hon. Friend 100%. It is crazy that we are not doing that by volume, because glass is heavier. We are forcing people to move to lighter products, particularly plastic.

Would my hon. Friend also accept that because glass is heavier than other products, it costs more to recycle and transport? It may break during transport, so it is not the case that it is a more sustainable product.

I have not heard that or seen any evidence of that. All I can say is that in Wales, 95% of the glass is kerbside-collected and recycled. I do not know where my hon. Friend’s stats come from. If she would like to share them with me and the industry, I would like to have a look.

Glass produced in Turkey is not currently covered by emissions trading, so the CO₂ emitted is not captured by matching penalties. In addition, Turkish glass manufacturers have built factories in organised industrial zones and benefit from Government support in the form of lower water, natural gas or telecommunications costs, as well as a lower taxation scheme.

The lower cost base, supported by the Turkish Government in the form of state aid, is assisting Turkey in targeting export prices at rates that are lower than UK factory costs. However, it is the baseline fees set for glass under the extended producer responsibility that are set to be the hammer-blow. And the hammer administering that blow is being wielded by a Labour Government, which I find hugely disappointing.

I want to put on the record my pride in having a glassworks in Irvine in my constituency and in its many workers, including Mr Thomson, who lived next door to me in Auchenharvie Place when I was growing up. The Government must consider the concerns of the sector about the EPR and look at the evidence that has been supplied. And I urge the Minister to adopt the sensible solutions that my hon. Friend the Member for Rotherham (Sarah Champion) is suggesting today.

I thank my hon. Friend for that intervention.

The glass sector has always supported the principle behind EPR. It lobbied, on sound environmental and safety grounds, against inclusion in the deposit return scheme, knowing and accepting that that would mean the inclusion of all glass products in EPR. Yet the terms of EPR have seemingly been deliberately stacked against the sector.

It is not only glass manufacturers who will be hit hard by this change. Indeed, since being granted this debate I have been inundated with messages from organisations worried about the impact of EPR.

Does my hon. Friend agree that it is important to ensure that the implementation of EPR avoids unintended consequences for businesses such as pubs, which are already facing huge headwinds? In many cases, pubs already manage their packaging waste through commercial contracts, so they would face double the levy.

My hon. Friend makes a sound point, which I will reinforce.

Let me go through some—I emphasise “some”—of the organisations that have been in touch with me about this issue. They include Vinarchy, one of the world’s largest wine companies; the Society of Independent Brewers and Associates; the Campaign for Real Ale, CAMRA; the British Beer and Pub Association; the Wine and Spirit Trade Association; UKHospitality; the Foodservice Packaging Association; the Metal Packaging Manufacturers Association; the Scotch Whisky Association; the Irish Whiskey Association; the English Whisky Guild; the Brewing, Food and Beverage Industry Suppliers’ Association; the National Association of Cider Makers; and WineGB. All these organisations have spoken out against EPR and their criticisms of the approach being taken by the Government have been surprisingly—indeed, strikingly—similar. Minister, they cannot all be wrong.

Other assessments of EPR plans have been similarly damning. The Office for Budget Responsibility has concluded that EPR is a tax. It will not improve recycling rates and it will damage businesses. The Bank of England and the British Retail Consortium have recently stated that the impact of this policy on businesses will be similar to that of the increased national insurance costs. As my hon. Friend the Member for St Austell and Newquay (Noah Law) said, all this is coming at a time of rising economic uncertainty, which is the result of the Trump tariffs. Pubs face an estimated £8 million hike in their costs, which will equate to an extra £2,000 per year for a large pub.

I thank the hon. Lady for securing this debate. Like her, I have heard from the British Beer and Pub Association, and I have also heard from several of the pubs in my constituency of West Dorset. The British Beer and Pub Association has said that the increase per bottle on beer and cider will be between 5p and 7p. That comes on the back of increases in business rates—one of my local pubs, The George in West Bay, saw their business rates rise from £8,000 a year to £27,000 a year, with increased national insurance contributions on top. If we want to keep village pubs, we need to support them and not keep taxing them.

I agree 100%. These consequences —one hopes that they are unintended consequences—are the stark evidence that has been put to the Minister, but seemingly it is not making any difference.

I go back to the point that my hon. Friend the Member for St Austell and Newquay made. EPR is intended to apply to household waste only. As pubs and similar businesses already pay for their packaging waste collection via commercial contracts, they are being charged double.

My hon. Friend is making an excellent speech. She is pointing out the double counting and the effect of EPR. I have 19 pubs and Fuller’s brewery in my constituency, and they employ about 4,000 people. With all the other pressures on pubs and the hospitality industry at the moment, this is a bridge too far. Does my hon. Friend agree that the Government need to reconsider this?

I completely agree with my hon. Friend: the Government need to pause, and I will go on to argue why they need to do that.

One of the problems is that packaging producers are unable to exclude these products from their EPR liability. There is no way out for pubs and hospitality businesses other than to pay. The Wine and Spirit Trade Association has said:

“Defra’s new rules do not work, and the vast majority of bottles sold in hospitality will pay EPR fees, completely unfairly. Defra are aware of their mistake but have admitted the issue would not be prioritised.”

Why? For brewers, the cost of glass beer bottle packaging is estimated to be more than £150 million per year. These additional costs will ultimately be passed on to the consumers. The Government themselves estimate that 85% of EPR costs will fall on the end user. With the public already facing stubbornly high costs of living and inflationary pressure, I cannot comprehend why the Department for Environment, Food and Rural Affairs is proceeding with a policy that its own analysis suggests may not meaningfully improve recycling rates. I urge the Minister to change course and step away from this madness.

Let us look in detail at this flawed scheme. The exact methodology for calculating EPR has still not been fully shared, even though it came into effect last month. The process to date has been far from transparent. Based on current illustrative fees, glass is liable for around 30% of EPR costs, while only representing around 5% of in-scope material by volume. That is because fees are calculated by weight, not volume. Glass, as a relatively heavy material, suffers unfairly because of that, yet volume is the limiting factor when collecting and processing waste, not weight.

British Glass has raised several areas that it believes are incorrect in the methodology for calculating the base fees, but it has received no certainty from DEFRA that these will be reflected in the final fees. I am aware that other packaging trade associations have serious concerns about the methodology used to create the base fees. The fee for glass currently stands at £240 per tonne, which equates to around 10p per glass bottle—significantly higher than under similar schemes in Europe.

Will my hon. Friend give way?

Not at the moment.

In the meantime, our Government are driving packaging customers decisively and permanently away from glass. If, for example, a brand sells 1 million half-litre bottles, the EPR fees for glass would be £72,000. If, on the other hand, the brand decides to put its product into plastic or aluminium, it will pay no EPR fees whatsoever. Officials and Ministers have argued that materials that are part of a deposit return scheme will be subject to set-up costs, and it is on those grounds that they are granted exemption from EPR fees for close to two and a half years. Yet those set-up costs are still unknown publicly and therefore cannot be, and have not been, considered by brands and retailers when making their packaging choices. The truth is that brands and retailers can avoid the imminent threat of additional costs from EPR by switching away from glass packaging to not pay EPR fees on their beverage products. Once those producers have decided to switch packaging materials, they must invest in new filling technology, and that makes it highly unlikely that they will ever switch back to glass.

This is not a hypothetical problem. The glass industry is already seeing evidence of material-switching to less recyclable packaging. I know that DEFRA has been sent a great deal of evidence of material-switching but, let us be honest, this policy choice does not seem based on evidence but on some unfathomable ideology.