Contribution
I am going to make some progress, because otherwise we are never going to get through this.
We have already provided £340 million to local councils in England alone, in particular to bring in food waste collection. That is particularly important, because it will allow us to create green gas and digestate, which we can use as fertiliser. We have to move away from the high-input fertilisers we use now.
In this space, pEPR has an important role to play. It will divert packaging from residual waste into recycling. We estimate that the policy will save 200,000 tonnes of carbon dioxide equivalent and about £189 million in emissions. My hon. Friend the Member for Gower spoke about growth. These reforms will support a thriving economy. As a result of these reforms, the waste management sector has committed to create 25,000 new jobs and invest more than £10 billion in the economy. Circular industries, keeping products and materials in circulation for as long as possible, now deliver £67 billion each year to our economy, and growth in this sector is more than double the rate of the overall UK economy.
We have heard concerns, which I shall address quickly. We have met with glass producers—I can go through the list of the meetings. Basically, glass, due to its durability, is uniquely placed to take advantage of the generous financial incentives pEPR provides for reuse, because reusable containers only attract a fee the first time they are used.
The Government recognise the value of the glass sector to the economy and have provided direct support to four of the major container glass manufacturers—Encirc is one of them—through the British industry supercharger scheme to ensure they remain competitive in a global market. I have some details here about how much they are going to save. Four glass companies are in receipt of this support and the package of measures is estimated to save eligible companies around £24 to £31 per MWh and reduce electricity costs so they are more closely aligned with their key international competitors. That is designed to reduce the risk of carbon leakage and help them to compete on the international stage.
Yesterday’s Budget was mentioned. For pEPR, the Chancellor has announced consulting on proposed changes to the packaging recycling note scheme; consulting on options to drive transformation of local authority waste management and ensuring the accountability of pEPR funding. I have written to local authorities, as well as to PackUK, to reassert the need for this money to be spent on collecting packaging waste and not on cross-subsidising other areas of local authority spending; and appointing producer leadership of the scheme by March next year to give industry a central role in running the scheme.
In the hospitality sector, we are publishing a national licensing policy framework, asking licensing authorities in England and Wales to consider the need to promote growth and deliver economic benefits in their decisions; we are appointing a retail and hospitality envoy to champion and deliver these changes; and we are making a commitment to explore changes to the planning framework to make it easier for hospitality businesses to grow.
We heard a lot about the brilliant small businesses in MPs’ constituencies. For small businesses, we have some of the most generous exemptions of any scheme in the world. Businesses with a turnover below £2 million or that place less than 50 tonnes of packaging on the market are not obligated to pay pEPR fees or recycling obligations. The exemptions mean that 70% of UK businesses that supply packaging are not obligated under this scheme. We have also heard about issues around the bills and the paying of the bills. To help larger businesses that are obligated, PackUK is offering quarterly payment options to help with cash flow. PackUK will watch the thresholds carefully, knowing that raising them would push costs on to the remaining businesses as local authority collection costs stay the same.
We have been listening to feedback so we have adapted our approach. This time last year, we were working tirelessly with the Environment Agency to bring so-called free riders into compliance—people who were putting glass on the market but had not actually registered with anybody anywhere. That increased the total tonnage of material registered in the scheme and enabled us to reduce the final fees, so the reduction of the base fees for 2025 actually went down by up to 38%, depending on the material.
Let me talk quickly about steel. I met with the Metal Packaging Manufacturers Association in September, and officials are following up on that. I am very conscious of the need, when the new arc furnace comes on stream, to make sure that we have a steady supply of scrap steel to enable it to stay in continuous production.
We are also engaging with stakeholders to develop the approach to in-scope packaging. We are looking at household packaging that is sometimes disposed of in business waste—for example, beer and wine bottles can be disposed of in pub bins.
We are looking at changing the recycling assessment methodology for next year to address complex composite packaging, which is really hard to recycle—particularly foil packages, which may have plastic on the inside and may contain paper. I talked to local authorities about that only this week, and we hope to bring forward a solution as soon as possible.
[Christine Jardine in the Chair]