Introduction

1. Valpak Limited is the UK’s largest producer responsibility compliance scheme operator with member schemes for the Packaging, WEEE and Waste Batteries regulations. In addition we provide our members services for the Carbon Reduction Commitment (CRC), Energy Savings Opportunity Scheme (ESOS) and other environmental areas such as recycling services, sustainable development consultancy and international compliance. We are therefore responding to this inquiry within the scope of these environmental areas.

Recycling

Has Treasury policy played a positive role towards meeting national and local Government targets on recycling and waste? Are DEFRA and HM Treasury policies coherent?

2. We have outlined below three policy areas where we believe the Treasury Policy has had an impact on meeting the recycling targets.

Landfill Tax

3. Introduced in 1996, Landfill Tax increases the financial viability of recycling material by increasing the tax rate payable for each tonne of waste disposed to landfill. This also has the effect of providing financial reinforcement to the application of the waste hierarchy. Whilst this has had a positive influence on the amount of material recycled the lower level of increases which are now being applied are reducing this impact.

Packaging Targets

4. The Producer Responsibility Obligations (Packaging Waste) Regulations first came into force in 1997 and introduced targets for material-specific packaging recycling. The Regulations transpose the requirements of the EU Packaging Directive and apply to businesses which meet certain obligation thresholds.

5. The current European-level targets were due to be met by 2008 and in December 2015 the European Commission released proposals for new targets to be met by 2025 and 2030. The current UK business targets were based on the best available material flow data available at the time and were set in 2012 and were due to expire in 2017.

6. Research projects updating the material flow data have led to Government review and consultation of two material-specific targets, for example the business target for glass was reduced in 2014 based on the updated figures. These reviews have also led to the extension of plastic and glass targets to 2020, which was announced in the March 2016 Budget. The extension of the targets for a longer time frame assists industry planning, including stability of investment and greater stability in the market.

7. The market based system to achieve the targets in the UK (the PRN system) requires any changes to be included in the Budget each year. This can therefore reduce flexibility as if the Budget deadline is missed, amendments to the targets are not able to be made and implemented until the next Budget.

Tackling Waste Crime

8. The Landfill Communities Fund was introduced in 1996, at the same time as Landfill Tax. The Landfill Communities Fund is a tax credit scheme which allows communities in areas in close proximity to landfill sites to access funds for environmental projects. In the 2015 Autumn Statement it was announced that funding would be made available to the Environment Agency to tackle Waste Crime (£20 million over a 5 year period) (https://www.gov.uk/government/publications/spending-review-and-autumn-statement-2015-documents). This is in line with one of Defra’s aims to reduce waste crime outlined in “Creating a great place for living: Defra’s strategy to 2020” (https://www.gov.uk/government/publications/defras-strategy-to-2020-creating-a-great-place-for-living).

What impact has Treasury policy had on the ability to finance recycling and waste projects over the course of the last Parliament?

WRAP

9. WRAP completes a number of bespoke projects, including projects about recycling and recyclability of products and also manages voluntary agreements such as the Courtauld Commitment. WRAP also provides information to a wide range of organisations, including Local Authorities, the waste management sector and businesses. WRAP is partially funded centrally by government but this funding is now reducing significantly and therefore the scope of WRAP’s activity is also reducing.

Reduction of departmental budgets

10. The reduction of departmental budgets has an impact on operational functions, for example Local Authorities may reduce the number of Household Waste Recycling Centres (HWRCs) and/or restrict opening times. The reduction of departmental budgets also has an impact on Enforcement Agencies which may have less resource for enforcement actions. Both of these aspects could have a negative effect on the achievement of the National recycling rates.

What impact is current Treasury policy likely to have on the achievement of national and local recycling and waste targets?

Government policy to reduce cost and administration burdens on industry

11. Defra are currently working on their position to the proposed European Commission Circular Economy Package. This could be an area where Defra and HM Treasury could work closely, for example to assess the possible impacts to business proposed by the minimum EPR requirements. The two departments could also work closely in order to maintain the freedom of choice for Member States to implement EPR as suitable to their National situation.

June 2016