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

My Lords, these regulations were laid in draft before the House on 24 October 2024. They introduce extended producer responsibility for packaging, which I will refer to as pEPR, in England, Wales, Northern Ireland and Scotland. PEPR is one of the three core pillars of the Government���s ambitious packaging reforms, alongside the forthcoming deposit return scheme and the simpler recycling programme in England. These will overhaul the packaging waste system, introducing the biggest change to policy in a generation. Collectively, the packaging reforms are estimated to deliver carbon savings of more than 46 million tonnes of carbon dioxide equivalent by 2035, valued at more than £10 billion in carbon benefits. The new system established under these regulations will modernise the producer responsibility system for packaging in the United Kingdom by shifting the costs of managing discarded household packaging from taxpayers to those businesses that supply packaging and by applying the “polluter pays” principle. These regulations also implement international best practice, exemplified by the mature systems of our European neighbours, including Belgium and Germany, where comprehensive EPR schemes have been in place for some time. I am sure that Members will note that this SI was drawn to the special attention of the House of Lords by the SLSC. I assure Members that this was on the grounds of it being politically or legally important and it giving rise to issues of public policy that are likely to be of interest to the House. I turn to the benefits of the scheme. The revenue raised by this new system will generate more than £1 billion annually to support local authority collection, recycling and waste disposal services. This will benefit every household in the UK and stimulate much-needed investment in our recycling infrastructure. This will make a substantial contribution to the benefits of the packaging reforms, which together are estimated to support 21,000 jobs in our nations and regions, and will help to stimulate more than £10 billion of investment in recycling capability over the next decade. Revenue from pEPR will create a much-needed injection of resources into local authorities to improve the household kerbside collection system across the UK. In England, this revenue will fund the simpler recycling reforms that will enable consistent collection of all dry packaging materials, ending the postcode lottery for recycling. Taken together, these reforms will support this mission-driven Government’s ambition to kick-start economic growth and create the foundations required to transition to a circular economy for packaging in the UK, ensuring that resources are kept in use for longer. It is a critical first step in meeting the commitment in our manifesto to transition to a resource-resilient, productive, circular economy that delivers long-term, sustainable growth. I will now look at the new obligations that the legislation will bring in. First, these regulations introduce an obligation on businesses that supply household packaging, referred to as “producers”, to pay the costs incurred by local authorities in managing that packaging once it has been discarded. Producers will also be obligated for the cost of providing public information about the correct disposal of packaging. Producers will start incurring fees from April 2025, and invoices will be issued from October 2025 for the 2025-26 scheme year. Additionally, from the second year of the scheme, producer fees will be adjusted to incentivise producers to make more sustainable decisions at the production/design stage, including decisions that make it easier for products to be reused or recycled at the end of life. This will mean that a producer who uses packaging that is not environmentally sustainable, such as packaging that is not widely recycled, will incur higher fees. Conversely, those using packaging that is sustainable and readily recyclable will incur lower fees. It is right that businesses bear the costs of managing the packaging that they place on the market, but we must also protect the small businesses that are the life and soul of our high streets and the backbone of our economy. That is why only businesses with a turnover of more than £2 million and which supply more than 50 tonnes of packaging per year will have to pay disposal fees under this new system. To administer this system, the regulations require the appointment of a scheme administrator jointly by the four nations. This body will be responsible for the implementation of pEPR. This will include the setting of producer fees and the apportionment and payment of those fees to local authorities in order to fund their waste management services. This scheme administrator will initially be hosted within Defra. I turn to the detail of the obligations that have been retained from the current producer responsibility system. This instrument revokes and replaces the Packaging Waste (Data Reporting) (England) Regulations 2023, along with the equivalent regulations in Wales, Northern Ireland and Scotland. The requirement for packaging producers to collect and report data on the amount and type of packaging that they supply is carried over from these regulations, as amended. This data is used to calculate producers’ recycling and fee obligations. This instrument also revokes and replaces the Producer Responsibility Obligations (Packaging Waste) Regulations 2007 and the equivalent regulations in Northern Ireland. As was the case under these regulations, this instrument places obligations on producers to ensure that a proportion of the amount of packaging that they supply is recycled; it also requires them to provide evidence of this to the regulator. These requirements apply to all packaging, not just packaging likely to be disposed of in local authority household collections. To meet this obligation, producers must demonstrate compliance by obtaining packaging recovery notes and packaging export recovery notes from recycling facilities or those who export packaging waste for recycling. I turn to compliance and enforcement. This instrument provides the four national regulators with enforcement powers and a duty to monitor compliance. It contains strong enforcement measures, including criminal offences and powers for regulators to impose civil sanctions in cases of non-compliance. As is currently the case, the monitoring and enforcement activity for the producer responsibility regime will be funded by the associated charges in these regulations, such as those for registration and accreditation. These charges operate on a cost-recovery basis; as such, they have been increased from the 2007 regulations to reflect the new duties placed on the regulators and the increased level of monitoring and audit activities. In conclusion, there is no such place as “away”. It is therefore critical that we create the foundations required to transition to a circular economy for packaging, in order to ensure that resources are kept in use for longer and to secure vital carbon savings. I beg to move.