The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)

My Lords, the Government are committed to transitioning the UK to a circular economy. We want to finally move away from the linear “take, make, throw” model, which we know causes harm to our environment and our society, and towards an economy that keeps our valuable resources in use for longer. A deposit return scheme for drinks containers is a strong example of the circular economy in action. It is a critical first step. Deposit return schemes are a well-established and proven method and over 50 schemes are already in place, including in Germany, Sweden and the Republic of Ireland. A DRS incentivises consumers to return and recycle their drinks containers and means that valuable materials are collected, recycled and made back into new drinks containers—a truly circular loop. The deposit return scheme is one of the three core pillars of the packaging reforms, alongside the extended producer responsibility for packaging and the simpler recycling programme for England. Together, it is estimated that these packaging reforms will support 21,000 jobs in our nations and regions and help stimulate more than £10 billion of investment in recycling capability over the next decade. They are also estimated to deliver carbon savings of over 46 million tonnes of carbon dioxide equivalent by 2035—valued at more than £10 billion in carbon benefits. At its heart, the deposit return scheme is a key environmental policy that will tackle the scourge of littered drinks containers, protect our beaches and countryside, preserve our wildlife and restore pride in our local communities. The benefits of the DRS in reducing littering cannot be overstated. Each year in the UK, approximately 4 billion plastic bottles and 2.5 billion metal drinks containers are not recycled. Instead, they are disposed of in general waste or littered. We are all familiar with the destructive impact of litter. In recent years, we have seen littered drinks containers blight our marine environment, but it does not stop there. According to a recent report from Keep Britain Tidy, littered drinks bottles and cans along our roadsides are killing millions of our native mammals every year. This is devastating our rarest and most important small mammals such as shrews, bank voles and wood mice. We must act to protect our natural environment. A deposit return scheme established under this instrument will also promote a fairer society. Obligations will be placed on drinks producers to ensure that containers are collected and recycled. This is consistent with the well-established “polluter pays” principle. We have set an ambitious target for the scheme to collect 90% of in-scope containers by the third year of operation. Laid in draft before the House on 25 November 2024, this instrument establishes, in England and Northern Ireland, a deposit return scheme for drinks containers. Under a deposit return scheme, a person who is supplied with a drink in a container that is in scope of the instrument pays a deposit that can be redeemed when it is returned for recycling. The scheme design in this instrument is informed by well-established international examples and extensive industry experience. Many of our industry partners have shared their experiences delivering these schemes across the world. The scheme will be centrally managed by an industry-led, not-for-profit organisation called the deposit management organisation. This instrument applies to England and Northern Ireland, but my officials have worked closely with the Scottish Government, who are amending their existing legislation to launch simultaneously across England, Northern Ireland and Scotland in October 2027. The Welsh Government have withdrawn from the four-nation DRS approach. However, we remain in close working partnership with them as they make decisions regarding a DRS in Wales. We are keen to keep the door open to provide as much interoperability of schemes across the UK as possible. Before I turn to the detail of the instrument, I acknowledge the work of the Secondary Legislation Scrutiny Committee, which draws this instrument to the special attention of the House on the grounds that it is politically or legally important and gives rise to issues of public policy likely to be of interest to the House. The committee highlighted questions on the scheme’s application in Scotland and Wales; the exclusion of glass; the deposit level; interactions with the extended producer responsibility for packaging scheme; and the set-up of the deposit management organisation. The committee also highlighted correspondence received from the Wildlife and Countryside Link, which is supportive of the legislation in principle but raised questions about ensuring a comprehensive return point network; the exclusion of glass; monitoring and review mechanisms; and enabling reuse. I now draw Members’ attention to the obligations introduced by this instrument. It sets out the scope of the scheme and places obligations on drinks producers, importers and retailers. Producers of drinks in plastic and metal containers from 150 millilitres to 3 litres will be obliged to label products and charge a deposit when supplying the drink into England and Northern Ireland. They must also pay the deposit to the deposit management organisation, along with the producer fees to fund the scheme. Retailers across England and Northern Ireland will be obliged to participate in the scheme by charging a deposit on plastic and metal drinks containers then taking the containers back and refunding the deposit. They are also required to pass the collected containers to the deposit management organisation for recycling and to display information to consumers so that they understand how the scheme works. These obligations on producers and retailers across England and Northern Ireland will start from October 2027, when the scheme is launched. To administer the scheme, this instrument requires the appointment of the deposit management organisation. It allows for certain provisions to come into force on the day after the instrument is made. These are necessary for the appointment of the deposit management organisation and the establishment of the administrative arrangements in advance of the scheme launching. The deposit management organisation, which will be appointed in April 2025, will be obliged to meet collection targets, pay return point operators for collecting the containers, recycle the collected containers and pay national enforcement authorities. The instrument provides powers for the deposit management organisation to set deposit levels, prescribe labelling, interact with other schemes, set producer fees, calculate handling fees for return points and exempt some retailers from hosting a return point. Under the “polluter pays” principle, it is the responsibility of businesses to bear the costs of managing the packaging that they place on the market. Through specific return point exemptions based on store size, proximity to another return point and suitable premises grounds, this instrument also protects small businesses across England and Northern Ireland, which are vital to our high streets and are the backbone of our economy. Finally, this instrument makes provision for monitoring and enforcement activities by the Environment Agency and local authority trading standards to ensure that mandated businesses and the deposit management organisation are compliant. In conclusion, the need for a deposit return scheme is plain to see. This scheme will not only improve recycling rates and provide better-quality material for recycling but make a difference to people’s daily lives. It will encourage people to see waste as a valuable resource and, by reducing litter, it will improve local communities. With this scheme, we can turn back the plastic tide. I beg to move.