§ 12.51 p.m.
§ Lord Dubs rose to move, That the draft order laid before the House on 1st June be approved.
§ The noble Lord said: My Lords, the main purpose of the draft Producer Responsibility Obligations (Northern Ireland) Order is to introduce in Northern Ireland provisions on producer responsibility in line with those already in force in Great Britain under Sections 93 to 95 of the Environment Act 1995.
§ The order will also enable the Department of the Environment for Northern Ireland to make regulations to implement European Community requirements.
§ The powers in the order will be used in the first instance to make producer responsibility regulations to place statutory obligations on businesses to meet recovery and recycling targets, thus enabling Northern Ireland to comply with the requirements of Article 6(1) of the EC directive on packaging and packaging waste.
§ We are all aware of the pressing need to find better ways of dealing with the waste which we produce through the development of more sustainable waste management practices. According to the most recent figures available, the amount of packaging waste currently going to landfill in the United Kingdom amounts to over 10 million tonnes per annum. This is clearly a figure which none of us wishes to see continued, let alone increased. Indeed, we want to reduce it. Sustainable waste management must therefore involve every individual, every household, every business and every district council in trying to find a better alternative. In fact, I recently announced the publication of a draft waste management strategy for Northern Ireland which seeks to move waste disposal away from landfill and up the waste hierarchy towards recycling and recovery.
§ I appreciate that the details of this order are somewhat technical and to that extent may sound dull when I describe them. But to ordinary people who have the misfortune to live near a landfill site, these matters are 1531 neither dull nor pedantic; they are of importance to them because most of those people would like to have no site at all or less waste going into the site. I am convinced that the future policy on waste is something which will affect everybody and in order to have an effective waste strategy we will need the active co-operation of households, councils, businesses and all others concerned with the matter. Therefore, it is not a dull issue, even though the details of the order appear dull at first glance.
§ The introduction of the legislation on producer responsibility will further the aims of the strategy and make a valuable contribution to the Government's sustainable development approach to the environment, but without imposing an undue burden upon smaller businesses. In that regard, it is estimated that the legislation will capture 90 per cent. of all packaging waste while placing an obligation upon only 10 per cent. of businesses in Northern Ireland. It is an impressive statistic that 10 per cent. of all businesses contribute 90 per cent. of all packaging waste. It is therefore the larger businesses which will be particularly involved.
§ The order should be of especial interest to the House because it is a piece of legislation which is not simply being imposed on industry out of the blue. It is, rather, the fruit of a long and constructive debate with a wide range of industry representatives on the best and most equitable means of ensuring that producers assume responsibility for the impact upon the environment of the materials and articles which they manufacture.
§ There has been widespread consultation with business in the United Kingdom. A consultation paper was published in Northern Ireland in 1996. The result of those consultations was the formulation of the shared producer responsibility concept which spreads the burden across the business sectors involved. It was also concluded that recovery and recycling targets could be met but not on a voluntary basis. Legislation would be necessary both to avoid free-riders and to provide an incentive for business-operated schemes to organise recovery and recycling to meet the targets.
§ It was also recognised that all sectors of the packaging chain would have to be involved, from raw materials manufacturers and convertors of that raw material into packaging through to packer-fillers and sellers to the final user.
§ That, in essence, is the content of the order. It is designed on the one hand to comply with specific aims as regards the recovery and recycling of waste materials and on the other to ensure that individual businesses may choose the method of compliance which best suits their own business operation.
§ The order achieves those objectives by introducing provisions which, while strengthening environmental law and ensuring that Northern Ireland can implement national, EC and international obligations, do not offer any barrier to competition or free trade. The regulations will set annual tonnage and turnover thresholds. Only those businesses which both have an annual turnover of over £5 million per annum and handle 50 tonnes or more of packaging per annum will be subject to the 1532 regulations. This means that all small business will be exempt from any obligations. The regulations will also provide for businesses to meet their statutory obligations, if they so choose, through membership of exemption schemes for joint compliance. What this means in practice is that in return for the payment of a fee, an exemption scheme will assume the legal obligations of its member companies and arrange for the required tonnages of waste packaging materials to be recycled on their behalf.
§ In Great Britain, the duties of registration and monitoring of obligated companies that this legislation entails are being carried out by the Environment Agency in England and Wales and by the Scottish Environmental Protection Agency north of the Border. In Northern Ireland that role will be carried out by the Environment and Heritage Service, an executive agency of the Department of the Environment for Northern Ireland which already carries out a similar regulatory and monitoring role in respect of other environmental controls.
§ The business community in Northern Ireland was initially consulted about a shared responsibility approach to the legislation in November 1996. Those consulted included members of the packaging chain, the waste and recycling sector, major manufacturers and retail chains, trade and industry federations, district councils, environmental groups and other interested parties. There were, of course, a number of concerns regarding the costs and practicalities involved in meeting the proposed targets. However, the response was on the whole favourable and in accord with the Government's ongoing commitment to achieving a more sustainable approach to dealing with the impact of waste upon the environment.
§ We have been mindful of the importance of ensuring that the economic cost of implementing the order should not discriminate against any sector of industry. I am pleased to be able to reassure the House that the operation of the legislation will be the subject of detailed scrutiny. I beg to move.
§ Moved, That the draft order laid before the House on 1st June be approved.—(Lord Dubs.)
§ 1 p.m.
§ Lord Randall of St. Budeaux
My Lords, I welcome this statutory instrument because it takes important steps towards improving our environment. I like the idea that manufacturers should take responsibility for the by-products that arise through manufacturing processes.
There is always a problem in achieving a balance between environmental protection and waste management. I should like my noble friend to explain more about the impact the order will have on small firms. He said that it would not be a burden on small firms but went on to describe the exemption scheme, which, on the face of it, sounded rather good. However, fees will be associated with that exemption scheme. This worries me very much because the role of SMEs and micro-companies is so important to the development of the economy, not just in Northern Ireland but throughout the whole of the United Kingdom. We have to ensure 1533 that we do not increase the burdens on such developing companies in a way that would impair their rate of development, their productivity and their ability to re-invest.
Accordingly, I would be most obliged if my noble friend could give the House some assurances on the impact that the order will have on SMEs and what protection it will offer them so as to ensure that their performance and development are not impaired.
§ Lord Wallace of Saltaire
My Lords, we on these Benches welcome the order. We do not find anything boring about sustainable development or about reducing the level of waste produced by industry and consumers throughout the country. We welcome the underlying objectives of the order. I merely wish to make a number of brief points, partly general and partly related specifically to Northern Ireland.
As the noble Lord, Lord Randall, suggested, it is a matter of achieving a balance between imposing burdens on business and promoting sustainability. I notice that Article 3(b)(d) refers to minimising the bureaucratic burden on firms. We all recognise that that is exactly where the balance has to be struck and that is where detailed regulations prepared for specific industries have to be implemented. We welcome the idea of regulations tailored to specific industries.
Secondly, the definition in Article 3 of the re-use, recovery and recycling of products implicitly extends to encouraging extended use of materials. It is often much more environmentally friendly simply to extend the use of something rather than to waste resources by providing packaging which is re-usable and which is then re-churned through the system.
Thirdly, Article 4(5) specifies that the revenue from any fees or levies raised under regulations shall be paid directly into the Consolidated Fund. As the Minister will be aware, my party has spent some time thinking about the need to increase trust in the tax system by providing a greater degree of visibility between what is taxed and what taxes are spent on. There should be a degree of hypothecation here; for example, the extent to which taxes raised on producer responsibility should be related to cleaning up the rivers. That is very much the way forward.
Lastly, Article 6 deals with the liability of the Crown. We are all conscious that the Crown is a rather larger element in the Northern Ireland economy than in the rest of the country. I ask the Minister for reassurance that Article 6 will be interpreted in such a way as not to let the Crown off the hook in terms of its responsibilities in producing waste.
§ Lord Cope of Berkeley
My Lords, like other noble Lords who have spoken, I welcome the ideas behind the order and the objective it is trying to achieve. The order results from long and good consultation started under the previous government and carried on by the present one. But, from the parliamentary point of view, this is a very unsatisfactory way of legislating. The order is subject to the affirmative procedure, which is what we are now engaged in, but the sole purpose of the order is 1534 to create powers for regulations to be introduced by the negative procedure. In a sense it is a dodge to get round the affirmative procedure. I should like the Minister to tell us what progress has been made on the regulations and with the consultation on them. They are the meat of the whole matter.
There is little detail in the order. The Minister referred to quite a number of matters which are not in the order but which will appear in the regulations to follow. One example is the matter of small businesses, referred to by the noble Lord, Lord Randall of St. Budeaux. The Minister referred to a 50—tonne limit. That is not in the order but it is intended to be in the regulations. However, the regulations may not be introduced into this House at all. By that time responsibility may have passed to the Assembly; it certainly will a short time after, if all goes smoothly, as we hope it will. It is not insignificant that many regulations set up offences for which people can be charged and fined, which is usually but I always think amusingly described as, "On summary conviction, to a fine not exceeding the statutory maximum." I am not sure why it is necessary to express the matter that way. It is one of the disadvantages of not being a lawyer, although, on the whole, I find that an advantage in parliamentary discussions.
The order opens up the way for a whole series of regulations which we have not yet seen. That is the important part of the order. The regulations are clearly intended to do things which we support, but the detail of them will also be important to, among others, small businesses.
I have one other point. The Minister may not be able to deal with it straightaway but it arises indirectly from the order. I am told that planning permission has been given for a waste incineration plant on Belfast Lough which is expected to deal with much of the waste that comes out of Belfast. That will be a major matter. If the Minister is in a position to update us on how that is coming along and what is now expected in respect of the plant, it would be helpful background information in considering the order.
§ Lord Dubs
My Lords, I am grateful to noble Lords for their general support for the order and what it is intended to achieve. Perhaps I may deal with the specific points that were raised. My noble friend Lord Randall was quite properly concerned about the effect on small firms. I shall explain how the system will work.
Small firms which have a turnover of under £5 million a year and which create packaging waste of under 50 tonnes a year will not be subject to the regulations. The point about the exemption scheme is that large firms may either collect their own packaging waste and deal with it in accordance with the regulations or they may use other firms who specialise in that activity to collect it for them. The firms can be exempt from having to collect the waste, but they must ensure that they comply with the need to meet the percentage targets. For example, a firm in the retailing business might use a lot of packaging which is taken home by consumers and disposed of. Therefore, it would be difficult for the firm to go to the consumers to collect 1535 the waste. Clearly, it would contract a specialised firm to collect the appropriate amount of waste to enable it to meet the target. That is how such a firm would be exempt from having to collect the waste itself. The two concepts are different, but I can assure the noble Lord that we do not intend to impose a burden on small businesses. Those below the threshold will be exempt from the provisions of the regulations.
However, I very much hope that small businesses will act in the spirit of the regulations and do their best to minimise packaging waste. After all, the object of the regulations is not to impose a financial burden on businesses but to give them an incentive to produce less waste in their activities. That is the desired aim.
§ Lord Randall of St. Budeaux
My Lords, I am grateful to my noble friend for that answer. The micro-companies and the small SMEs would be protected, which shows considerable insight. Nevertheless, information regarding the structure of the fees associated with the exemption scheme for companies above the £5 million and 50—tonne figures would be helpful to the House.
§ Lord Dubs
My Lords, it would be best if I were to write to the noble Lord and send copies to other noble Lords who have taken part in the debate. The issue is complicated and I am not sure that I can deal with it accurately. It would take a lot of time to do so. Perhaps my noble friend will bear with me and I shall write to him.
§ Lord Cope of Berkeley
My Lords, I am grateful to the Minister for giving way. I am sorry for interrupting him. Can he confirm that as regards small business exemptions below 50 tonnes and so forth he is stating the Government's intention for the regulations? No limit is specified in the order; the figure could be 1 tonne or even nil. The order does not specify 50 tonnes; the Minister is merely telling us that that is the Government's intention as regards the regulations. The information is valuable—I asked for particulars of the regulations—but it is an example.
§ Lord Dubs
My Lords, the noble Lord is right. In answer to another question which he posed, the regulations are likely to come before Parliament, not before the new Assembly, as we hope to have them laid before the end of the year. He will be able to take part in further debates about the regulations before they come into effect.
The noble Lord, Lord Cope, asked about the general progress of the regulations. The draft regulations were published for consultation on 26th June and consultation is taking place with a wide range of interested parties, including industry and district councils. More than 500 companies have been consulted. We are undertaking a proper and widespread consultation on the regulations which will come before this House, all being well, before the end of this year.
1536 The noble Lord, Lord Wallace of Saltaire, also asked about the regulations. They will encourage the re-use of packaging by exempting re-used packaging such as bottles which are returned and refilled. We wish to encourage such a process. It may seem old-fashioned to return to bottles which are used more than once, but it is a sensible way forward. I hope that the regulations will give full effect to that.
The noble Lord also asked about the position of the Crown. Article 6 applies the order to the Crown. That means that there is no exemption for government departments or other Crown bodies. In practice, it is unlikely that they will be conducting a business to which the regulations would apply. However, I take the spirit of the noble Lord's comment. In this, as in other matters connected with the environment, it is important that government departments should set the lead and set a good example. Other people can then say, "If Government do that, it is reasonable for us to follow." I refer to a whole range of issues concerned with sustainable development and the "greening" of government generally. However, it is unlikely that such regulations for businesses will apply to the operation of government departments.
Finally, the noble Lord, Lord Wallace of Saltaire, asked about the Consolidated Fund. I hear what he says, but I am not sure that I can change Treasury policy quite so easily. I note his point, which is that any moneys going to Northern Ireland should stay there for Northern Ireland purposes.
I thank noble Lords for their support and I look forward to their contributions in debates when the regulations come before us.
§ On Question, Motion agreed to.