The packaging and retail sectors told the government last year that they should not pay more for producer responsibility on packaging because they are paying massive sums in business rates.
The business rates case was made by the sector as it looked to avoid paying more towards the cost of recycling packaging in the UK. The sector’s reasoning was revealed in documents released by the government this week. The documents were published just hours before the launch of the Plastics Pact which sees a greater focus on the environment and recycling by a range of businesses.
In the documents form 2017, organisations such as the Industry Council on Packaging and the Environment (INCPEN) and the British Retail Consortium tell government there should be no radical change to the current system, which has PRNs at its heart.
The organisations, which represent most of the blue chip businesses in the retail, packaging and supply sector – and include the Food and Drink Federation – claim that the UK’s systems is cost-effective, fit-for-purpose and that higher producer responsibility costs “would add considerably to the costs of UK producers”.
The comments came in documents through which the sector has been trying to lobby Dr Therese Coffey, minister for recycling and resources, over the UK’s stance on producer responsibility and the European Union’s Circular Economy package.
In contrast to the packaging and retail sectors’ desire to avoid contributing more to producer responsibility, local authorities consider that the producers should pay more.
Last week, Lee Marshall, chief executive of recycling officer’s group LARAC, told the Recycling Association conference in London that producers currently only made a contribution of about 15% of the costs of collections which had to be undertaken by local authorities.
Mr Marshall pointed out that the packaging was needed by the producers to meet their PRN obligations and that local authorities deserved a larger contribution to their work, including for communications.
But, INCPEN and the British Retail Consortium and the other trade bodies say that their members have an “existing burden of business taxation” which has become “increasingly weighted against people and property intensive business such as retail”. They point out that these pay an estimated £10 billion per annum in business rates and this is redistributed to councils and used to fund local services such as waste collection.
In their letter, the producers tell Dr Coffey that the existing UK systems means they pay £50-100 million a year whereas some of the changes planned under the Circular Economy package could see them paying £1 billion per annum. And, they note that costs in Germany to producers are “ten times higher than in the UK”.
The debate over funding is crucial ahead of the Waste and Resource Strategy due out later this year.
It is widely expected that the strategy will relate to the life-cycle of products and so producers may well find that they have to fund recycling and collections in some form to an extent higher than they do now. It is expected that the PRN system will be modified and may include support for publicity work to encourage recycling.