Motion to Consider
My Lords, Schedule 6 to the Climate Change Act 2008 enables Ministers to make an order to bring in charges for single-use carrier bags. I shall explain the main elements of the charge but, first, I should like to remind the Committee why the Government are legislating for a modest charge on single-use plastic carrier bags.
We are committed to reducing the number of these bags in distribution. This will in turn reduce the environmental impacts of the production of these oil-based products. It will also reduce the impact of plastic bags at the end of their lives, particularly on the visual environment and wildlife when they are littered. Similar charges in other countries have demonstrated how effective this simple measure can be. Customers are encouraged to reuse their bags, rather than incur the charge. When bags are charged for, we expect the profits to be directed to good causes.
There are currently too many single-use bags being needlessly distributed. Efforts to reduce the number of single-use plastic bags without resorting to legislation have led to a good deal of success in the past. Such voluntary initiatives by retailers saw a reduction in the distribution of single-use plastic bags by 48% between 2006 and 2009. This was significant progress, but the number of single-use plastic bags given out is on the rise. In England between 2010 and 2013, there was an increase of 18%, which is just over 1 billion bags. In 2013 alone, England’s main supermarket chains issued more than 7 billion single-use carrier bags to their customers. As we all know, far too many of these bags made their way on to the streets and into the countryside as unsightly litter. They were also discarded on beaches and in the sea, where they can cause harm to wildlife.
Plastic bags also have a negative impact on the environment through their production and disposal. The oil that is used in their creation and the tonnes of plastic that go to landfill mean that we must take action to reduce the use of plastic bags. Where they are used, these bags should be reused as often as possible and then recycled.
The Environmental Audit Committee’s report on plastic bags last year was carefully studied by the Government. There may be some details of the scheme on which we agree to disagree, but we are all in agreement that reducing bag use has real environmental benefits. It will mean lower carbon emissions, more efficient use of valuable resources and less litter.
The order introduces a requirement to charge for single-use plastic bags. There has been a largely positive response to the announcement of the charge, which is a proven tool. In its first year, the Welsh charge resulted in a decrease of 76% in the number of single-use plastic bags distributed by the seven big supermarkets. We have been able to use the experience from the Welsh charge to help shape our scheme. A similar charge was introduced in Scotland last October. The English charge will commence in October 2015. It will require retailers to charge a minimum of 5p for every new single-use plastic carrier bag—the same as in Wales and Scotland. Bags used for deliveries will incur the charge, as well as those used to carry purchases away from a store.
Small and medium-sized businesses will be exempt from the charge in England. We recognise that some wanted SMEs included but we concluded that we need to avoid administrative burdens on start-up and growing businesses in England at a time when we want to support new growth in our economy. It is also worth bearing in mind that the current UK retail market is dominated by a comparatively small number of large stores with over 500 employees, employing 65% of people working in retail with 69% of all annual turnover of retail businesses. Any retailer that is not covered by the legislation will of course be able to charge for bags voluntarily.
As in Wales and Scotland, we hope—indeed, expect—retailers will give the proceeds of the charge to good causes. The Climate Change Act does not give the Government the powers to determine what retailers do with the proceeds of the charge. However, we will require them to report to the Government the number of bags they give out, the amount raised by the charge and what they do with the proceeds. We will then make this information public and expect that pressure from customers will ensure that the net proceeds—once reasonable costs have been deducted—go to good causes. Many of the large retailers have already stated that they will be giving the proceeds to charities or community groups and will publish details on their websites.
It would, of course, be fitting if some environmental causes were to benefit from the charge in England. In Wales, charities such as the RSPB, Keep Wales Tidy and Save the Children have benefited from the proceeds of the Welsh charge. Keep Wales Tidy has used the funding to support a Routes to School project, which aims to address litter problems on school routes by engaging and educating children and their families. It is not only charities that stand to gain from the charge. When littered, carrier bags cost taxpayers in England about £10 million every year in clean-up costs.
Of course, there will always be a need for some plastic bags. People may forget their reusable bags, or they may require a new bag—for example, to avoid contamination if they are buying raw meat. At the same time, we should aim to reduce the visual impact and harm to wildlife if these bags were littered.
A bag that biodegrades into harmless products is clearly desirable. That is why we are working with industry and academic experts to review existing standards and will report to Parliament before the charge comes into force on 5 October 2015. The report will state whether it appears that there is an existing industry standard or standards appropriate for excluding biodegradable bags and, if so, how that exclusion is to be implemented. We are keenly aware that the success of a biodegradable bag will also depend on more sophisticated ways of separating plastic waste. We need to ensure that the quality of recycled plastic does not suffer as a result of contamination with biodegradable bags.
We are focusing the charge on plastic bags as part of a targeted and proportionate approach to this issue. Plastic carrier bags take the longest to degrade in the natural environment, can harm wildlife and are extremely visible when littered in our towns, parks and the countryside. Paper bags make up less than 0.1% of carrier bags distributed in the UK by the seven major supermarkets and can biodegrade naturally in the open air. Of course, paper bags should still be reused a number of times before being recycled and should never be littered.
There are a few specific circumstances described in the legislation in which bags will not incur the charge. These include, for example: bags used solely to carry uncooked meat or unwrapped food and goods contaminated by soil, where there would be issues with food safety from contamination; bags for prescription medicines, where pharmacists have an obligation to protect the privacy of patients; and reusable bags for life. Purchases made on board planes and boats and in airports will also not incur a charge as it would be unreasonable to expect people to be carrying reusable bags in those transit places. The charge will be enforced by local authority trading standards officers. It will be light-touch, pragmatic and complaints-led. We are funding training for local authority officers.
A full assessment of the costs and benefits has been carried out. The total net impact of the scheme over 10 years is calculated to be a positive benefit of more than £780 million. That figure includes savings from reduced costs associated with littering and carbon dioxide-equivalent emissions.
Although consumers may incur an initial cost in purchasing reusable bags, these are designed to be reused many times and the supermarkets will replace them for free. Although single-use bags will now cost 5p, anyone who wants to avoid paying the charge will be able to do so by taking their own reusable bags to the shops. We encourage people to do this.
We expect that there will be an increase in sales of bin bags, as there was in Wales, as people currently often reuse single-use plastic bags to line their bins. However, even when this is taken into account, the impact of the charge in Wales has been a dramatic overall reduction in the amount of plastic used. We anticipate that the charge will reduce plastic bag distribution in supermarkets by between 70% and 80%, and overall in England by between 50% and 60%.
The order includes a review of the legislation to be carried out within five years of the charge coming into force. It will be at that stage that the reporting requirement will prove essential in assessing the effectiveness of the charge. Any changes to the legislation could also be considered at that time.
We are pleased that the European Union has reached agreement on a robust plan for tackling the blight of plastic bag pollution, with each member state doing what works best in its own circumstances.
In summary, the Government consider that the approach set out in the order provides a fair means of charging that supports the Government’s aims of minimising waste and resource use. I therefore commend the order to the committee.
My Lords, the Minister began his speech with a ringing declaration: “We must take action”. He set out a very convincing case on financial and environmental grounds for the action that the Government propose to take.
I recall the dedication in the magnum opus of a regius professor: “To my wife, at last, at long, long last”. The key observation is on the process of government and why there has been such a long delay on what is clearly an overwhelming case for action. It is not as though this is some startling brave new initiative on the part of the Government. No, as the Minister said, the proposal is already in force in Wales and has been since 2011. There has been ample time to see the results. It is not some laboratory experiment. We can see the results in Wales already; in Northern Ireland, since 2013; and in Scotland, since last October. It is not as if the results are uncertain. If we have eyes to see, we can clearly see the results. Given the very close nexus between Wales and England, do the Government seriously think that the response of the public and retailers would be different in England? All this vast expenditure on research and consultation in England is surely otiose. The views of the Welsh public are already well known. Do the Government have any strong indication that Welsh public opinion is different? The effect of all this is further cost and degradation.
I recall that in my Parliamentary Question on 14 May 2013, I asked,
“the pilot scheme in Wales has lasted for several years. Will the Minister spell out very clearly the objections to the implementation of the scheme in England?”.
The Minister answered:
“My Lords, as I just said, we are monitoring the charging scheme in Wales and data from the first year will not be available until the summer”.—[Official Report, 14/5/13; col. 264.]
That response was given in May. Now almost two years have passed and, even for the limited scope of the Government’s plan, they have been two wasted years. Since we know that 7.9 billion bags were given out in 2013, the two wasted years effectively amount to almost 16 billion bags. There was a successful test in Wales, which was clearly accepted by the public.
To give my personal position, I shop in supermarkets and retail stores in both Wales and England. There were no concerns in Wales when the charge was introduced. People fall quickly into the habit of taking along shopping bags to the supermarkets. When I shop in London, I do so with exactly the same habit and take along a shopping bag. I am sure that the bulk of people in Wales would do the same.
I note also that in Article 1(d) the Government have suggested an end date of 5 October 2022, as though they are not wholly convinced. What is the purpose of having an end date for this long experiment? It is something that is already working successfully in Wales. Does this mean that the Government are not wholly convinced? We know that a Government can review or end such a situation at any time if they choose to do so. Why include a sunset clause when the evidence is so clear?
Perhaps I may make a few comments on the Explanatory Memorandum. We are told in paragraph 2.1:
“The Order will ensure that retailers with 250 or more employees charge a minimum amount for unused single use (lightweight) plastic bags”.
What proportion of the total number of plastic bags will be covered by stores employing 250 or more employees? It means that a fairly sizeable number will not be covered, even though the Government are convinced at last of the environmental and financial benefits. Indeed, we are told in paragraph 5.1 that there is,
“a smaller number of retailers located outside England who supply lightweight plastic bags for the purpose of enabling goods to be delivered to persons in England”.
Surely they cannot be from Wales, Northern Ireland or Scotland. Where do these bags actually come from? It is made clear in paragraph 7.6 that,
“requiring 5p to be paid for each single use plastic bag supplied will significantly reduce the number that people use. As yet unpublished, social research has suggested that this is acceptable to consumers”.
We could have told the Government that without any recourse to social science research because it is there in plain sight for them to see in the way that this has been accepted in Wales.
I am wholly unconvinced by the Government’s reasons for the delay. We are told, of course, that those with fewer than 250 FTEs will be able to charge on a voluntary basis if they wish, as set out in paragraph 7.8, and that,
“we know of one franchiser who is already encouraging its outlets to do this”.
What sort of reporting and administration will there be? What will happen, for example, if these smaller retailers choose to pocket the sum? Will there be any review of the money that is given to charity?
I could go on analysing all the elements here, but it is clear that the Government should have taken this action a very long time ago. Now they have gone part of the way along the road with much ado. Any sensible Government would have looked not at a laboratory experiment, but at the actual result in Wales of how the public have responded to the initiative taken there. However, the Government have chosen to ignore that and to carry out their own research, which was both unnecessary and otiose. They should not be applauded for this belated initiative.
In speaking, I declare an interest as a non-executive director of BPI, which is one of Europe’s largest manufacturers and recyclers of polythene film. However, I stress that BPI has no interest in single-use carrier bags. I welcome this order and its overriding purpose is admirable. However, it is of concern that some of the details of the order go against the unanimous advice of the Environmental Audit Committee, the advice of the British Retail Consortium and a number of other retailers outside the BRC, and the advice of a number of industry organisations. I should stress that it is the detail of the order, rather than its overriding purpose, which has caused a number of organisations and the Environmental Audit Committee some concerns.
In addition, I believe that the detail of the order is, in parts, at odds with the Environment Agency’s own life cycle analysis. Therefore, it is regrettable that, while there may have been—as the noble Lord, Lord Anderson suggested—a delay in bringing forward the proposal, the order itself has been rushed as regards the opportunity to discuss with other parties what the detail of the order should contain.
The EAC held exhaustive investigations into the proposals, and concluded by flagging a number of concerns to Defra in its report, including the fact that the exemptions proposed in its charging scheme for small retailers, and paper and biodegradable bags, would make the scheme too complex. More specifically, the Environmental Audit Committee ruled that an exemption for biodegradable carrier bags was not viable because of the damage such an exemption would cause to the UK plastic films recycling industry. I will focus on the exemption relating to biodegradable bags, because of its unintended consequences.
The summary of the EAC’s report states:
“The options for disposal and recycling of bags are complex, with significant risks around contamination, and must be coherent with the Government’s wider approach to reducing and managing waste. The proposed exemption for biodegradable bags risks damaging the UK plastics recycling industry, could undermine the reduction in bag use, and is not necessary. It should not proceed”.
The Packaging and Films Association agrees, pointing out that if biodegradable or oxodegradable plastic carrier bags are used, they will result in an adverse impact on the recycling process of plastic, rendering recycled plastic totally unusable for certain applications and severely reducing its performance for others.
It is not just the PAFA. Studies by universities have proved that with inclusion rates in recyclate of biodegradable and/or oxodegradable materials at very low levels—between 2% and 5%—the quality of the recyclate is severely impaired. There are also concerns, incidentally but not unimportantly, that such an exemption would send a confusing message to consumers, whom the industry wishes to encourage to reuse and recycle products at the end of their life.
The industry is wholly committed to the reuse of its products, and many in the industry have no problem with the proposed levy and support this order. However, they are widely concerned about the scale of the impact that an exemption for biodegradable and/or oxodegradable products would have on the UK’s existing plastics recycling industry. Those concerns have been recognised in Europe, where oxodegradable technology has now been recognised by almost every major European retailer and every other major western EU member state as not being a suitable alternative to biodegradable materials.
The UK polythene film recycling industry, which supports thousands of UK manufacturing jobs and is an excellent example of advancing the circular economy, has no financial or business interest in the manufacture or sale of single-use carrier bags and thus has no competitive interests in those products. The oxodegradable manufacturers’ association, which I understand is promoting such an exemption, supports just 32 jobs in the United Kingdom.
It is inevitable that if an exemption for biodegradable or oxodegradable single-use carrier bags is included in any regulation at a future date, as anticipated by this order, it will result in an increase in these products becoming included in the UK plastics recycling waste stream. My noble friend pointed out that more sophisticated methods are needed for separating biodegradable from non-biodegradable materials—he is right. Not only are more sophisticated methods of separation needed, but we have to be economically realistic. This difficulty is likely to play into the hands of exporters, whose recyclers can hand-sort, and would undermine the UK recycling business, which has been driven towards automation and cannot afford to add labour to hand-sort.
To allow those products to enter the UK plastic films waste stream would have other regrettable consequences as regards the existing reuse of plastic and plastic films. I will give noble Lords just one example. One of the major uses for recycled plastic pellets is the manufacture of building films and membranes used in the construction of all new housebuilding. From June 2015, all materials supplied to the UK housing and construction markets will be required to include a lifetime guarantee. To give such a guarantee will not be possible if the raw material used in the manufacture of these products could include bio or oxodegradable content, which could cause product failure within the lifetime guarantee. This will result in the manufacture of these products reverting from using recycled sources to using prime or virgin raw materials, and thus reduce the available market for UK-manufactured recycled plastic pellet. It has been suggested that this is a small price to pay for the inclusion of a biodegradable exemption. However, with so many UK manufacturing jobs at stake, such a suggestion is viewed as being incomprehensible. I could cite plenty of other examples of similar unintended consequences.
I must restate that the UK plastic films recycling industry does not have any interest in the manufacture or sale of single-use supermarket carrier bags and supports the Government’s purpose in introducing a charge on single-use bags. However, the proposed exemption for bio or oxodegradable bags will have a detrimental impact on the UK plastic films recycling industry and will lead to immediate problems and unintended consequences. Also inherent in such an exemption are real difficulties in terms of policing and the opportunities for fraud. I do not know whether Defra has considered this inevitable dimension and the resourcing of this oversight. Can the system be properly administered? I am not sure.
The chairman of the British Plastics Federation’s recycling group said recently:
“Over the last three years, the UK has seen the emergence of significant infrastructure to support plastics recycling. This is at a critical stage where it is necessary for these investments to demonstrate profitable growth and to meet the needs of higher overall recycling targets. This policy exemption could undermine these businesses due to the potential for contamination”.
The director-general of the British Plastics Federation, speaking on behalf of the wider industry group, Plastics 2020, said:
“All this will spell a loss of jobs in what has been a potentially thriving plastics recycling sector and put paid to further progress in meeting Government’s ambitious recycling targets”.
Let me finish with a quote from the British Retail Consortium. It stated:
“Biodegradable bags can be really confusing for the consumer and very challenging for the retailer to be able to communicate how to dispose with these bags correctly. Biodegradable bags cannot currently be recycled along with single use carrier bags—a challenge for those supermarkets providing front of store carrier bag recycling points. There are serious doubts about the environmental benefits of oxo biodegradable plastics. They cannot be composted, they add nothing to incineration, there is mixed opinion about their fate in landfill, and reprocessors do not want this material because their customers have doubts about the effect on the longevity of constructional plastics”.
I strongly urge the Minister to think carefully about how the review that the order requires to be carried out by 5 October 2015 is carried out. The requirements of that review, which are set out in the order, should include a cost-benefit analysis of the effect of implementing an exemption for bio or oxodegradable plastics.
I am sure that one would not want a bishop to put himself forward as a paragon of virtue, but I have in my hand a bag that I have used for the last 20 years, which my Danish mother-in-law bought in Copenhagen. It is a shopping bag, and I walk around your Lordships’ House with it. There it is. I have two of them, which I treat as one might treat one’s pet cat or dog.
I welcome the order and hope that cathedral shops, which do not employ anything like 250 people, and other such places involved in the life of the church, will join the spirit of the change, make the charge and not just pocket the benefits for their own charitable purposes.
I have a couple of questions for the Minister. Will the exemptions in this order parallel exemptions that apply in Northern Ireland, Wales and Scotland? If not, why are some greater than others? It would be helpful to have that information and the logic of that. Also, the figure of 250 seems quite high. How easily would the Government be open to a reduction in that figure? Indeed, what is the equivalent figure in the other parts of the United Kingdom? Are other materials used in packaging single-use? Lots of vegetables are presented in plastic packaging that is essentially single-use. As I look around the roadsides at this time of year, when you especially see all the plastic debris before spring comes, the litter is by no means only single-use plastic bags from supermarkets.
My final question relates to the remarks of the noble Earl, Lord Lindsay. If a plastic bag biodegrades, what does it biodegrade into? I had a misspent youth as a chemist and my guess is that the bag biodegrades into carbon dioxide, inasmuch as there is carbon in the plastic. Other people here will probably have greater scientific skills than me, but that is what happens. When plastic biodegrades, the carbon in the plastic becomes carbon dioxide—as I understand it and unless I can be corrected. Why make this order under the Climate Change Act and provide an exemption for biodegradable bags when they biodegrade into carbon dioxide? That is, if I have got my primitive chemistry correct, some decades on from when I last practised. I want to welcome this but some broader questions should be asked around the order.
My Lords, I rise to raise a number of issues with the order. I do not think anybody would disagree that plastic bags, when chucked out of car windows or off cliffs, are unsightly, dangerous to marine life and wildlife, and generally a bad thing. However, the bags themselves do not find their way off the cliffs or out of car windows. It is a person who throws the bag out of the window. When a murderer stabs somebody to death with a Stanley knife, it is not the Stanley knife that kills the person but the murderer who pushes the Stanley knife into them.
There is a great deal of inconsistency, incoherence and muddle with this rushed order. I turn to the material itself. Plastic comes up pretty favourably in terms of overall impact as against paper, unless paper is considered to be used multiple times, which for shopping bags is highly unlikely. First, how can we have an order that applies to one material while discriminating against many other materials? Secondly, how does it fit in with EU law to single out one material for special treatment while leaving other materials unfettered? Similarly, on the 250 employees point, that is an interesting figure but pity the poor seagull choking to death on a plastic bag, only to be told, “I’m really sorry, pal, but it came from a local store of only 50 employees in the overall chain”. Or imagine the same seagull on another occasion, choking on a supermarket plastic bag only to be told, “It’s not great for you, pal, but someone did pay 5p for it so at least we have moved on there”.
Similarly, and on a point previously raised, how do these regulations sit alongside those already made in the devolved nations? If we are to have an approach to single-use plastic bags, it would seem sensible to have coherence across the country. We are the United Kingdom of Great Britain and Northern Ireland. This really could be one small measure to connect across that United Kingdom.
Another point that has already been raised but is worth reiterating is the one about oxo- and biodegradable. What is the Minister’s view on how this can be effectively transitioned into the overall plastic bag policy and approach, and what will this do to the recycling process, apart from throw it into complete and utter chaos?
My noble friend the Minister described the 5p charge as a modest charge. He set out eloquently in his introduction the magnitude of this problem, but we have a modest charge. If you pay 5p, you can carry on with this behaviour quite happily. A 5p entry fee to chuck a bag out of a window—whatever you choose to do with it—is not really a high price. Does it really go to the heart of the stated aim of this order?
With regard to the redistribution, as set out by Defra, there are no powers for Defra to say anything about the redistribution of these funds. Who can say where they will go and what they should go on? Why should we create something that effectively gives businesses of more than 250 employees the right to set up a brand new branch of their corporate social responsibility policy, where they can choose wherever these 5ps go? They are not their 5ps, they are the 5ps of the customers who have been having to pay this to get the groceries they have already paid for home from the supermarket. It is a 5p tax on carrying your stuff home rather than having it in your arms or other bags because you happened to turn up with no bags. Those 5ps will be multiplied to give supermarkets and other businesses the right to set up virtue funds on whatever they choose to spend them on. Who will decide, who will determine and who will measure? Who will say whether these are good charities or organisations to have this money spent on? Who can say whether the so-called environmental causes that a lot of this money is likely to go to have a positive impact on the environmental aims so stated? Who can say?
Who can say whether the money even gets redistributed at all? As set out in the Defra paper, there is an “expectation” that that is where these 5ps will go. An expectation—what a marvellous concept. I apologise for coughing: a single-use bag got stuck in my throat to highlight the problem we are discussing. What sort of impact does an expectation have? We can save a lot of money with the new super-prisons and other institutions we are building by not putting any walls around them because we can have an expectation that the prisoners will stay within the grounds. An expectation—what oomph does that really have?
In conclusion, we are talking about single-use bags but what we have as currently drafted is a ragbag of an order that is incoherent and inconsistent. Does it really go to the heart of any environmental matters? I ask the Minister: what percentage of overall landfill is made up of single-use plastic bags? I hope my noble friend will be able to consider some of these points and get the order into a more coherent shape by the time it is laid.
My Lords, I broadly welcome this proposal. Some of us have been arguing about it for years and years. I remember that when I raised it with another Minister, I was slapped down and told that the Government had no intention of doing this, even though I pointed out that it was a benefit and the Government might even raise some revenue. At the time we were talking about a tax on the bags rather than a donation to the supermarkets.
This is a good idea. I think Ireland started this even before Wales and it seems to work pretty well there. Despite the objections of the noble Lord, Lord Holmes, the system works pretty well where it has been in used in Wales, Ireland and Scotland. But I welcome the Government as a repenting sinner. The Government were against this in the past, but it is pretty good that they are in favour of it now.
Some supermarkets—Sainsbury’s or Marks & Spencer or both—charge 5p already. But, of course, they do not publicise the fact at the till. It is only when one does a self-service transaction, by putting one’s purchases against the barcode—you see, I go shopping myself; how many others go shopping?—that, occasionally, it asks you to indicate whether you have no bag or that you should be charged for the bag. Sometimes, for very small bags, there is no charge. The system needs more publicity, both at the point of sale and more generally. If people know that they are being charged—sometimes it is easy not to notice, they might pay more attention.
I remember some years ago, when Ireland introduced the scheme, I was at a conference with Irish politicians in Oxford. We looked out the window and saw somebody walking along the street with 15 plastic bags—I think they were the orange Sainsbury’s ones. The Irish politicians said, “That wouldn’t happen in Ireland any more”. They have stopped it, and it works there. We are following on a bit late, but we are doing it.
My other specific point on publicity is this: I am trying to interpret the exemptions. If, say, somebody buys six loose oranges, does that enable them to have a bag without the charge or would the charge apply? It is not clear to me. Sometimes fruit is packaged and sometimes it is sold loose. It is slightly less expensive if it is sold loose. I wonder how that will be handled.
I understand that there is higher energy content in making a paper bag than a plastic bag but there is a good argument against plastic bags.
A lot of us were brought up to go out with a shopping basket—I am old enough to remember that—or bag and would not dream of expecting the shop to provide the packaging. There is no harm in going back to that.
I add one other plea about the amount of plastic wrapping on products, which is not directly concerned with the order. Buy a simple toothbrush and try to open it without a pair of scissors or a knife; it will be too firmly packaged. The Government should move on from this to look at other forms of packaging, which are totally excessive and add to the amount of plastic in the environment.
My Lords, I did not intend to speak, but I think I should, following my Welsh cousin’s contribution. Some time ago, I went on holiday to Wales and found myself being charged 10p for a plastic bag. I made some inquiries among my Welsh friends. It cost 10p in north Wales, 5p in mid-Wales, 2p in south Wales and nothing if you knew the shopkeeper well. I had my doubts about the whole system already, but I remembered that, in north Wales, I had looked at where the money from the plastic bags was going—into the shopkeeper’s till. There was no way that you could tell where the money from the plastic bag went eventually or how the shopkeeper paid it. There was a little box on the counter where you put the money for the plastic bag, but the shopkeeper took the money and put it in the till. That was my experience in Wales. When I went back home to England, I had a good look around for these plastic bags that the Welsh had been tossing around on the seashore, in the streets and everywhere else—supposedly. In one month, I found one plastic bag blowing around in a car park. That was the only sign I had that plastic bags were being thrown around.
I think the whole idea is nonsense. It is the customer who is paying again, and paying twice. The shopkeeper has already paid for the plastic bag and covered that in the cost that he is charging for whatever you are buying. You are paying twice, and the shopkeeper is getting back the money that he has already paid for the plastic bag. Everybody should be happy but the customer should never be happy about being charged for plastic bags.
My Lords, I want to make a couple of quick points and press a couple of questions similar to ones that have already been made. What we are talking about is known in economics as a Pigovian tax. I know this is not a tax but Pigovian taxes are intended to discourage activity. The one thing economists say about them is that they should be as technology-neutral, as transparent and as even as possible, otherwise they simply push down something that pops up somewhere else. I worry that we are talking about dealing with what is a very small part of the amount of plastic litter that ends up in the countryside. The point has been made that there is an awful lot of litter on roadsides, particularly at this time of year, and relatively little of it consists of supermarket plastic bags. I have heard the figure of 1%, although I do not know if that is right. Is it not possible to come up with something much more neutral about plastic technology generally across the board, to see whether we can discourage it without picking on this one bag?
I find it very hard to believe that the savings in littering and CO2 will be in the region of £780 million— I think that was the number I heard. This is only a relatively small part of the litter that is around. I cannot believe that 10 minutes less spent picking up litter on the side of the road because there are no plastic bags there will add up to £780 million. On the CO2 point, I echo what the right reverend Prelate the Bishop of Chester said. It is not at all clear that the alternatives will produce less CO2—unless we all use the equivalent of the right reverend Prelate’s bag and I am not sure that everybody will. We know that more energy often goes into making paper bags by the time that transport and everything else is taken into account, whether or not, as my noble friend Lord Holmes said, that paper bag gets reused. We also heard from my noble friend Lord Lindsay that oxydegradable plastic bags will have an impact on the recycling chain. Can we make absolutely sure that, when we quote figures for the amount of carbon dioxide that will be saved by this measure, they are honest and properly audited? One hears some claptrap in this area and it would be nice to be sure that the figures are right.
The hypothecation of taxes—that is, when a tax automatically goes to one use rather than just into the Treasury—is something that the Treasury has always resisted. I know that this is not a tax—it is a charge—but none the less it has been hypothecated to certain good causes. On the whole, that is quite a good idea, as long as the customer is allowed to direct where it goes. I hope that that becomes a slightly more general point across government.
My Lords, I suspect the Minister was hoping for full approval for this government initiative. I am gratified that the Government have finally got around to it. I have been campaigning on this front for at least 15 years, so I am glad that, 13 years after the Republic of Ireland, and then following the devolved Administrations within the UK, we have at last reached this position. To continue the scriptural allusions of my noble friend Lord Dubs, there is always much joy in heaven for a sinner who repenteth, and we should all appreciate that. Nevertheless, we could have had a much clearer policy announced today—one that would have been better understood by the public. I was struck by the point made by the noble Lord, Lord Holmes, that it is people who litter, not bags. That is absolutely true. However, as the noble Viscount, Lord Ridley, said, the whole point of this tax is effectively to change behaviour. It is not a tax; it is a levy.
My noble friend Lord Anderson referred to the experience in Wales. I happened to be in Tesco in Dundee on Sunday with a young lad. I would not say that he had great green credentials nor that he was always affected by prices, but he had already—this is relatively new in Scotland—changed his behaviour and brought a bag with him. That is the point. Yes, in the end, it is people who create litter and, by using these plastic bags, not only cause unnecessary carbon emissions but bring desecration to our countryside, wildlife, marine life, beaches and many of our city centres. I am glad that my noble friend Lady Golding found only one plastic bag in her car park, but I must say that that is not the general experience in either urban or rural car parks, or in other open spaces. It has been reported that some 2,000 of them can be found on every square kilometre of beach. That is atrocious from the aesthetic as well as the environmental and economic point of view.
I welcome the principle, but it has been unnecessarily curtailed, and in such a way that it does not do what it alleges it intends to do. The big exemption is for retailers with fewer than 250 employees, which exempts quite large retailers and represents around a third of all retail outlets. These exemptions do not exist in the devolved Administrations, but the exemption for very small retailers from completing the reporting mechanisms—the real red tape and administrative burden—is set at 10 employees. That seems to be a sensible approach. The exemption should be from the reporting and administrative burden, not from the requirement to impose the charge.
The exemption makes a big difference to the figures in the Government’s own impact assessment. The net present value of this over 10 years, according to the impact assessment set out on page 7 of the Government’s report and as indicated by the Minister, is £782 million. However, it would rise to more than £1 billion if all retailers were included. The Government’s position would be understandable if the retailers themselves were strongly pressing for this exemption, but I am sure that other noble Lords have seen the representations from a number of organisations that represent retail outlets, all of whom are saying, “This is daft and will actually impose a burden on retailers that will put them at a competitive disadvantage in certain respects”.
The British Retail Consortium has said that it is unfair to put smaller retailers in a position where they have to choose whether to charge. There are doubts about having an inconsistent position across the UK. The Association of Convenience Stores has said that some 60% of its members support a single-use carrier bag levy being applied, and in Wales, where it has actually happened, more than 80% of convenience stores support it. The association would strongly support its own membership being covered by this in England as well as in Wales, Scotland and Northern Ireland. The British Independent Retailers Association, which is the voice of the independent retailer and is often critical of the red tape of government regulations, has said that this should cover businesses of all sizes and that the only exemption should be on the administrative burden, to which I have referred. The Government do not have the support of those who would allegedly benefit from the substantial exemption this order provides for.
There are other exemptions or potential exemptions which can also be queried. The noble Earl, Lord Lindsay, has spelt out comprehensively why the issue of oxo-biodegradable bags is not worthy of being considered as an exemption because of their knock-on effect on waste management and the reusability of plastics in general. Others have queried whether other sorts of bags that are being exempted should have that exemption. The big issue I refer to in that respect is: why should non-reused paper bags be excluded when they themselves have a very high carbon content and are a significant part of the litter around our towns and countryside?
Given, therefore, that there is now a general acceptance of this approach, and that the alleged beneficiaries of the exemptions do not seem to be in favour of the Government’s position, why do the Government persist in doing this? Why, in particular, do they do so when the rest of the United Kingdom does not provide for those exemptions, or most of them, and when we may well be faced with a European directive at some point, which will probably not have those exemptions either?
As I say, we should give at least two cheers for the Government for coming forward with this at last. Nevertheless, it is a pity that they have botched it a bit, and I hope that maybe they will fairly rapidly rethink this, and that, even if we adopt this statutory instrument today or when it is considered in the Chamber, they will come back and say, “Actually, these exemptions are pretty much a nonsense. Let’s make it straightforward so that everybody can understand it, and it will have the effect on everybody, whether they are a customer of a small or large business, whether they have a plastic bag or a paper bag, and whether they are in the country or the centre of our towns”. I hope that the Minister will take that at least as partial support, but some rethinking would be appropriate in his department.
My Lords, I thank all noble Lords for their comments, but in particular I thank those noble Lords who have given at least the partial support that the noble Lord, Lord Whitty, offered. I will see how many of noble Lords’ questions and comments I can address, bearing in mind that our process may shortly be interrupted. However, I will see how far I can get.
The noble Lord, Lord Anderson of Swansea, asked why there had been a delay in getting to where we have. I know that I will not satisfy him entirely, and I suspect that he may have heard me say this before. However, I will say again that we carefully considered the situation and looked at the effect of the scheme in Wales to enable us to design what we considered to be the most appropriate scheme in England. As he knows, we first used voluntary industry initiatives to reduce bags, which proved successful up to a point. The other point it is worth making is that we needed to work with retailers to give them time to prepare. I know that I am not satisfying him entirely, but he will allow me to make that point.
He also asked what the purpose of an end date to the legislation is. It is standard practice from the perspective of Better Regulation to include a sunset date. It gives the Government of the day the opportunity to review the legislation to decide whether it is fit for purpose, and indeed to amend it if they wish to do so. Seven years is standard practice in that regard.
The noble Lord raised the exclusion of SMEs, as did a number of noble Lords. I am aware that some SMEs wish to be included within the scheme, but we have chosen to exempt small and medium-sized businesses from the charge to reduce the administrative burden on start-up and growing businesses at a time when we are supporting new growth in our economy. It is important to remember that the large majority of single-use plastic bags are distributed by the large retailers, and the seven major supermarkets gave out more than 7 billion of those bags in 2013. Small and medium-sized businesses are able to charge on a voluntary basis if they wish, and we have been told about some that already charge voluntarily and are generating significant financial benefits from a reduction in the number of bags they supply. I thoroughly encourage that. There is a requirement in the order for the system to be reviewed within five years, and the scope of the review will be set by the Secretary of State at the time, but I am confident that the SME exemption will be one element of the policy that will be considered as part of that review.
The noble Lord, Lord Whitty, asked a related question. The impact assessment also states that there is an overall net benefit to society when SMEs are excluded from the scheme. The Government have therefore chosen to exempt them from the plastic bag charge to avoid placing an administrative burden on them at a time when, as I said, we are supporting growth in the economy.
My noble friend Lord Lindsay suggested that the process was rushed. The details of the charging scheme were subject to a call for evidence, which was widely publicised, and we received 185 responses to the questions. The majority of the respondents supported the introduction of a charge on plastic bags. The summary of responses was published in June. In parallel, we received just over 2,000 emails on the broader shape of the charge, predominantly as part of NGO campaigns. We also used the evidence provided to the EAC and its report as an additional source of evidence in the development of the scheme. As well as ongoing engagement with retailers, the plastics industry and NGOs, we have held workshops with the British Retail Consortium and its members, and made some changes to the draft order, based on their feedback. We have also engaged with the Local Government Association.
My noble friend Lord Lindsay also asked: why would we proceed with an exemption for biodegradable bags when this might harm the recycling industry? We recognise the concerns regarding the separation of biodegradable bags from the waste stream. We seek to develop a standard that will take these needs into account. We have in hand research under the Small Business Research Initiative, including research into separation methods. My noble friend Lord Holmes asked about the same thing. We are keenly aware that we need to assess the impact on the recycling sector before introducing an exemption for biodegradable bags. We are looking to develop standards for a biodegradable bag that can be detected in the recycling stream.
My noble friend Lord Holmes and the noble Lord, Lord Whitty, asked about charging for paper bags. Plastic bags are prolifically distributed, take longer to degrade in the natural environment, can harm wildlife and are extremely visible when littered in our towns, parks and the countryside. Paper bags make up less than 0.1% of carrier bags distributed by major supermarkets and can biodegrade naturally over time in the open air.
My noble friend Lord Holmes asked where the revenue from the charge will go. How the proceeds from the charge are spent by retailers is a matter for retailers. The Government do not have the legal power to force retailers to use the proceeds in a particular way. However, we would expect them to donate the proceeds from the charge to good causes, after deducting reasonable costs. Many retailers have already confirmed to us that they will do this, and we will require them to report on the number of bags charged for and how they have used the proceeds. This information will be made public.
The right reverend Prelate the Bishop of Chester asked about the exemptions in the order and whether they were the same as in other UK countries. My noble friend Lord Holmes asked a similar question. We looked carefully at the Welsh scheme but decided to put forward a scheme that is better suited to the local circumstances in England. We have therefore opted to exempt SMEs and paper bags, unlike in Wales and Scotland, and believe that it is better not to impose administrative burdens on SMEs. Paper bags are also not so widely used by the big supermarkets.
My noble friend Lord Ridley evidenced some scepticism over the figure of £780 million in the impact assessment. We have drafted a full impact assessment, which is available on the government website. It shows the expected impacts of the charge on consumers, businesses and others affected by it. Using the Government’s standard procedures for these things, the total net impact of the scheme over 10 years is calculated to be a positive benefit of more than £780 million. That figure includes savings from reduced costs associated with littering and carbon dioxide-equivalent emissions.
The noble Lord, Lord Dubs, asked about a bag of oranges. I can tell him that bags used solely to carry unwrapped food are exempt from the charge.
My noble friend Lord Holmes and the noble Lord, Lord Whitty, asked how this fits with EU law and whether one can exclude one type of bag over another. In fact, our scheme fits very well and is compatible with EU law. Indeed, there is a current EU proposal to take action specifically on plastic bags. I hope I have addressed most if not all of noble Lords’ questions. If I have not, I shall of course scrutinise Hansard and write to them.
Perhaps I may ask a couple of questions. One is on unwrapped fruit. If one goes shopping, one normally buys a lot of things, including, say, four oranges. That means the shopping will be automatically exempt from the charge. That seems to be an inconsistency and, to my mind, not all that sensible. My other question is about publicity for the scheme. Surely one needs to encourage supermarkets to have publicity at the point of sale and wider so that people know what they are about. That will encourage people to take reusable bags.
My Lords, my experience when buying oranges in the same way as the noble Lord, Lord Dubs, is that supermarkets tend to offer a very light bag specifically for that purpose. We are talking about a very light bag, not one into which he could put the whole of the rest of his bottles and other heavy items. I hope I made that as clear as I can. He also asked about publicity and I entirely agree with him. We very much hope that retailers will do as he suggests.
Sitting suspended for a Division in the House.