Contribution
My hon. Friend makes a really good point. Those are, indeed, the unintended consequences we will see if the scheme is rolled out in its current form.
I am really worried about how this will impact the independent pubs in my constituency such as the Etsome Arms in Somerton, which prides itself on celebrating brilliant local brewers. This comes at a time when the UK has lost a hundred small breweries in the past year alone, with many more facing costs that they cannot absorb by themselves.
Glastonbury and Somerton is home to breweries such as Glastonbury Ales and Fine Tuned Brewery, near Somerton, as well as distilleries such as the Spirit of Glastonbury gin company. I visited Fine Tuned Brewery earlier this year to hear about some of the challenges that small breweries face, and the people who run the brewery explained their concerns about the impact that EPR will have on their business. They feel like they have been left in the dark due to poor communication from DEFRA.
It is clear that the knock-on costs of EPR will have an impact on these businesses. In fact, many in the industry are concerned that beer and cider producers might be incentivised to switch to less costly packaging such as aluminium or plastic. Those materials are more difficult to recycle than glass, so there is a risk that the scheme will achieve the opposite of its intentions. This potential backward shift in material usage may be only two years away, when the deposit return scheme comes into force.
In addition—and this concern has been echoed by many Members today—I have spoken to people in the industry who say it is clear that producers may end up paying twice for hospitality and business waste packaging under the current guidelines: once for existing waste collection and then again through EPR. I hope the Minister will comment on this uncertainty and provide businesses with the clarity they need.
On Sunday, people across my wonderful county celebrated Somerset Day and the important traditions of the region. One such deep-seated tradition is cider making. It is an economically significant and indispensable part of Somerset’s cultural fabric. Glastonbury and Somerton is home to fantastic producers such as Dowding’s in Wincanton, King Brain in Little Weston, Burrow Hill in Kingsbury Episcopi, Tricky Cider in Low Ham, Harry’s Cider in Long Sutton, Hecks Cider in Street and Bere Cider in Bere, near Aller, to name just a few.
Cider makers are fully supportive of a circular economy, but many are worried about how EPR might make their businesses unviable. Many cider producers operate on thin profit margins, as I have said, and some may struggle to remain viable if they are laden with these additional costs. The National Association of Cider Makers has expressed frustration that the introduction of EPR does not align with the introduction of the DRS in two years’ time. While the full costs of EPR will not be confirmed until June, the hammer blow is already being felt. Businesses have been experiencing disruption since its introduction last month, making it very difficult for them to plan effectively.
Combined with other costs, EPR is squeezing profitability and threatening employment. Given the economic importance of cider makers, whether through the people they employ or the cider apple-growing farms they partner with, it is a massive concern to many in Somerset that these additional costs could seriously damage the industry.
When I held a very well-attended cider blossom season tasting event in Parliament earlier this year, a cider maker told me that cider is often seen as synonymous with Britain, and that British cider’s terroir is something that no other country can replicate. Cider making is a unique industry, so the costs of EPR must be proportionate and producers must be supported as they move towards a circular economy, rather than being forced out of business.
The Liberal Democrats know how important it is that businesses are given the notice, support and time they need to plan and adjust. The lack of clear information on the final fees and the timing of the start of producer liability creates challenges for business planning. I hope the Minister can give some clarity on that matter today.
The Liberal Democrats believe it is crucial that businesses are supported in this transition, especially when they have already been hit by higher employer national insurance contributions and higher business rates, as has been outlined by my colleagues today. We have concerns not only about how EPR’s implementation might affect small businesses but about how the scheme will be regulated.
The Environment Agency is already severely underfunded and struggles to fulfil its regulatory obligations on water quality. Consequently, we are cautious about EPR and want to ensure that it comes with appropriate support and additional funding for the Environment Agency to meet this additional responsibility.
Likewise, given that EPR changes the way local authorities will be required to manage household recycling, we believe that the role of local authorities in the scheme must be properly supported—they are constantly being asked to do more and more with less and less.
The Liberal Democrats recognise the importance of making packaging more sustainable, which is why we have long been committed to introducing a deposit return scheme for food and drink bottles and containers. It is also why we want to see the complete elimination of non-recyclable, single-use plastics within three years, and why we want to end plastic waste exports by 2030. However, we are also clear that those ambitions must be achieved by working collaboratively with industry to ensure that small drinks businesses are not left behind or struggle to remain viable. If we do not deal with this issue, then less recyclable and less circular materials, or cheaper imported glass with a larger carbon footprint, will become a more viable option for businesses in a sector in which the margins are already very tight.