§ Mr. Burgon
To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on the outcome of recent consultation on changes to the Producer Responsibility Obligations (Packaging Waste) Regulations 1997. 
§ Mr. Meacher
I have considered the advice of the Advisory Committee on Packaging as set out in Sir Peter Parker's letter to me of 22 December 1998, in particular as this relates to changing the percentage activity obligations for each of the four main sectors of the packaging chain. Following consultation on these proposed changes and other matters, and subject to Parliamentary approval, I propose to make a number of changes to the Regulations as set out.170W(i) As I indicated in my reply to the hon. Member for Elmet on 28 January 1999, Official Report, columns 335–37, I have accepted the advice of the Advisory Committee on Packaging to change the percentage activity obligations and I have now consulted on this recommendation more widely. I therefore propose to change the percentage activity obligations of three of the four main sectors in the packaging chain as follows:Reduction in the convertor obligation from 11 per cent. to 9 per cent.Increase in the packer/filler obligation from 36 per cent. to 37 per cent.Increase in the seller obligation from 47 per cent. to 48 per cent.The recent consultation paper discussed the option of requiring compliance plans from individually registered businesses. The Regulations currently require operational plans to be provided by compliance schemes to the relevant Agency showing how, over three years, they propose to meet the recovery and recycling obligations of their members. Earlier advice from the Advisory Committee on Packaging on this point recommended that, where there is a significant number of individually registered businesses, they, too should plan ahead and give thought to the steps that would need to be taken to meet the mandatory Directive in 2001. In 1998, there were some 890 individual registrations with the Agencies and some 800 in 1999.I am also aware that there has been concern among businesses who are members of compliance schemes that there would be a higher rate of non-compliance among businesses pursuing this individual route. For 1998 this proved to be true, with around 200 individually registered businesses failing to provide compliance certificates as required and a number of these failing to take steps to comply with the recovery and recycling obligations. I believe that it is important that all those obligated under the Regulations should have to consider what infrastructural development might be needed to enable the UK to meet the mandatory Directive targets in 2001. At the same time, I am concerned to ensure that smaller businesses should not be faced with disproportionate administrative burdens. I am therefore proposing that businesses registered individually with an Agency who have annual turnover of more than £5 million, should provide a compliance plan to the relevant Agency upon registration and update this annually. We will be looking carefully at the new requirement in its first year of implementation to assess its effectiveness in improving compliance and the associated administrative burdens.(iii) In my reply to the hon. Member on 28 January 1999, I announced that the financial turnover threshold test for 2000 would be "more than £2 million" thus excluding smaller businesses in the £1 million to £2 million turnover range from the scope of the Regulations. The recent consultation document discussed a number of threshold test scenarios to see whether it was going to be possible to exclude a further number of smaller businesses. However, the Government's view is that the optimum balance of costs and benefits is to be achieved by continuing with the proposed "over £2 million" financial turnover and "over 50 tonnes" packaging handled. I am glad to confirm that these are the two threshold tests that will apply from 1.1.2000 as this will exclude a number of smaller businesses from the scope of the Regulations.(iv) In my reply to the hon. Member referred to above I also noted that the fee charged by the Environment Agency and Scottish Environment Protection Agency would rise to £900. Since that fee was calculated in mid-1998, the Agencies have had further experience of the monitoring that is required and have had feed-back from business as to the sort of monitoring programme that is wanted to ensure that free-riding does not provide some businesses with a competitive advantage and does not inhibit the achievement of the Directive targets in 2001. The Agencies fee will therefore rise to £950 with effect from 1.1.2000.The Competition Act 1998 comes into force on 1 March 2000. As a result, the Government is proposing to simplify the Regulations and remove the special competition scrutiny 171W regime to which those who propose to establish a compliance scheme are subject. All compliance schemes and individual businesses will, in any case, be subject to the Competition Act 1998 and the Office of Fair Trading can still investigate any compliance scheme which seems likely to have an anti-competitive effect.