Packaging Manufacturers: Extended Producer Responsibility

Motion made, and Question proposed, That this House do now adjourn.—(Gregor Poynton.)

Motion made, and Question proposed, That this House do now adjourn.—(Gregor Poynton.)

I am very grateful that you have granted tonight’s debate, Madam Deputy Speaker, and that we have so much time to discuss this important issue.

Packaging extended producer responsibility, which I will call EPR, is a policy that genuinely has a laudable goal: the move towards a circular economy, in which recycling is the norm, waste is minimised and we shift away from environmentally harmful materials such as plastic—something that the House can get behind. If done right, EPR could deliver just that, but the reality of the scheme now being implemented by the Minister is altogether different. We are seeing jobs being lost, British businesses losing contracts and investment, an increase in carbon-intensive glass being imported and, ultimately, producers switching from infinitely recyclable materials to plastic.

I appreciate the hon. Lady giving way so early in her speech, because I have to run to a Delegated Legislation Committee. I agree with all the points she is making, but would she talk later about the impact on the pub trade? This policy will hit the pub trade by about £50 million—it is going to do some real damage to a very important industry.

I will indeed be talking about the pub industry. I thank all the Members who have been campaigning so hard on this particular point for the last two years. The hon. Member will need to read the speech afterwards—it will be brilliant. We will try to protect our hospitality industry.

While this debate is not focused on a single material, I must declare a particular interest in glass. Next month, I will be really proud to attend an event marking the 275th anniversary of the founding of Beatson Clark. Since the earliest days of the industrial revolution, it has been manufacturing glass in my Rotherham constituency, providing generations of skilled, well-paid jobs to my constituents. Throughout world wars, economic decline, depression and indeed renewal, it has endured, helping to drive our regional economy. I say to the Minister that I want Beatson Clark to thrive for another 275 years, but the reality is that the EPR is placing that future at risk.

A plethora of interventions, but I have to go to the sister at the back first.

In my constituency, I also have a phenomenal glass manufacturer, called Encirc. It has three sites across the UK, employing over 2,000 people. It is unfairly penalised by this tax, because it is about weight. As the hon. Lady has pointed out, this is encouraging manufacturers of things like tonic to switch to aluminium and plastic, which are infinitely less recyclable than glass. It is also competing against imports from countries like Turkey, so not only are we facing the increased carbon emissions from shipping over the glass, but the glass is less pure and is therefore not as recyclable. I would ask the Minister urgently to look at this tax—I have already asked for that—and very quickly to bring in a 75% reduction while she considers its overall implications.

I hope to amplify the hon. Lady’s points later in my speech. Glass is not just another packaging material; it is infinitely recyclable.

I wanted to give the hon. Lady a chance to get back into the swing of things before intervening, but as she is talking about a valuable business in her constituency, let me say that the pub and brewery sector in Woking represents £100 million and 1,800 jobs to our local economy; those numbers used to be higher but, sadly our small brewery, Thurstons, had to close. The EPR was one of several factors that hit that brewery. Does she agree that we need a change from the Government on the EPR, as well as wider support for the sector?

I completely agree. Trying to level the playing field on this EPR measure is the one thing that I hope the Minister will give us comfort on today. Our hospitality industry is really suffering. More generally, I worry where the remaining places of community are in our towns, cities and villages. If we are not protecting the ones we have—the few we have—it is going to be a very dark future. Let me now get back to glass.

The hon. Member is being very generous in giving way, and she is making an excellent speech. I think we would say that the cost of food right now is the No. 1 issue for all our constituents and that household budgets are very tight. Does she agree that this is a bad time to be implementing this tax, whatever its merits may or may not be? The Bank of England estimates that it will add 0.5% to food price inflation, and that food prices could rise by 7% over the next 12 months. Households on very tight incomes are going to be squeezed as a result. Would it not be better either to cancel this measure, or at the very least not to implement it at a tough time like this?

As I said, I think the principles of the scheme are laudable. What frustrates me is that it is disincentivising using renewable materials, which in the long term are much cheaper. Instead, it is driving businesses to plastics, which have a very real cost on our environment as well as on our pockets. The Minister needs to do anything she can to mitigate that risk, but I hope this debate will grant her the opportunity to do so in a fair and equitable way.

Glass supports a circular economy. It underpins supply chains across food, drink and pharmaceuticals. We all support the principle underpinning the EPR—that those placing packaging on the market should pay towards its collection—but, as Members have said, the weight-based fee structure that the Government have chosen to utilise disproportionately penalises glass, making glass significantly more expensive per unit than lighter, less sustainable alternatives like plastic.

I congratulate my hon. Friend on securing the debate. I declare an interest as the chair of the all-party parliamentary group for packaging in the circular economy. Like her, I have engaged extensively with manufacturers across the supply chain. They support the EPR in principle but raise concerns about its implementation. Businesses need predictability, transparency and confidence. The current plan for annual adjustments to the recyclability assessment and methodology provides concerns about the long-term capital certainty that our factories need in order to reinvest. Does she agree that it would be helpful if the Government would commit to periodic, rather than annual, methodological changes and a comprehensive post-implementation review covering manufacturing, employment investment and material inflation?

I absolutely agree with my hon. Friend’s points. The methodology throughout—I will come on to it later—has been flawed, if not straight wrong in some cases. I would much rather that the research he is talking about—on the methodology—was done years in advance, rather than on the hoof as seems to be happening now. The Government seem to be suggesting that they will retrospectively look at what is happening and make adjustments, but unfortunately for a business and its bottom line, it is not possible to retrospectively charge people for something the Government choose to modify.

Let me state one inescapable fact. Glass is heavier than plastic—it simply is. By choosing to base fees on weight rather than on units, which they could have done, the Government are pushing businesses towards switching to a cheaper, less recyclable and much more environmentally harmful packaging. The industry has been told by the Department for Environment, Food and Rural Affairs that the modulation of fees will save glass, but let us be honest: this is too little, too late. Why not get the scheme right at the beginning, rather than trying to modify it later?

One of the largest employers in my constituency is Bostik, which is famous for Blu Tack. It also produces quite a lot of adhesives used in the DIY and home repairs sector. Bostik agrees with the scheme—it does not oppose the scheme in and of itself—but it does see one issue: although 95% of the company’s products go to site and are used by professionals, it will be charged the EPR on 100% of its products because it cannot trace every single item. It therefore supports the Builders Merchant Federation’s argument that commercial and industrial packaging should remain outside full cost recovery, because trade packaging waste is already covered through merchant distribution. Does my hon. Friend agree that the Government could consider that in the implementation stage, right at the beginning of the process?

My hon. Friend makes a point that I was not aware of. I have been in contact with loads of different industries, but not that particular one. It seems as though it is the same sort of double payment that hospitality is facing. That absolutely needs to be addressed.

Businesses have also been told that they need to move towards reuse systems. I am sure that both the points we are raising will be mentioned by the Minister in her response. It is true that glass is the perfect material to reuse, but it is not within the power of the glass manufacturing sector to force producers to move to use reusable bottles. Let us be honest: widescale reuse systems in the UK will take significant buy-in from the whole supply chain and will take at least a decade to become a reality, by which point—let me also be honest again—we will not have a glass manufacturing sector in the UK to supply the reusable glass packaging.

The signal that the Government are giving to businesses is clear: switch away from glass right now. The result? We are seeing an evident and accelerated shift away from UK-made glass towards both cheaper imports, which now account for—I am really surprised by this—14% of the market, and increasingly towards plastic.