Government largely rejects Environmental Audit Committee recommendations
In a move criticised as ‘refusing to take basic steps to reduce the amount of food and resources we waste’, the UK government has rejected many of the circular economy recommendations from the Environmental Audit Committee (EAC).
In July, the EAC published its special report on ‘Growing a circular economy: Ending the throwaway society’, which was issued following an inquiry into whether it is possible to de-couple economic growth from natural resource use, and what roles household recycling and the waste management sector have in the circular economy.
In the report, the EAC called on government to implement a range of measures to help bring about a circular economy. In its response, released by the EAC today (1 November), central government recognised the need to move towards a circular economy (highlighting action that is already being taken by government to do so), but largely rejected the EAC’s recommendations in the areas outlined below.
Government response details
Touching on the recommendation to support the targets proposed in the European Commission’s Circular Economy Package (including 70 per cent recycling by 2030), the government response highlighted that although it supports the ‘overall ambition and vision’ of the package, it is ‘keen to make sure that the proposals… allow flexibility, ensure that costs are justified by expected impact, avoid unnecessary burdens on business and create an environment that welcomes innovation’.
It added that to ensure this happens, it will ‘work closely with the industry throughout the negotiation period’.
Differential VAT rates
Responding to the call for differential value-added tax (VAT) rates based on lifecycle analysis of the environmental impact/recycled content of products, the government commented that VAT is controlled by European law and that it would ‘not be possible’ to reach an agreement on changes to VAT. It also pointed out that government has already introduced the Enhanced Capital Allowance Scheme for water- and energy-efficient plant and machinery, as well as the Landfill Tax and argued that ‘no further reforms to taxation are necessary at this stage’.
Reuse and remanufacture
Looking to reuse and remanufacture, the government agreed that eco-design standards could ‘play a valuable role in moving towards a more circular economy’, but stated that it did ‘not have any plans to require the recyclability of all products coming onto the market’, as the EAC had recommended.
In response to the recommendation for government to work with industry to set longer minimum warranty periods, government said it ‘agreed in principle with the committee’s view of the potential benefits’, but noted that it would ‘be at direct cost to businesses’.
However, it welcomed ‘any further information that businesses can provide on any problems they have encountered’ in terms of trade barriers for remanufactured goods and said it would ‘be happy to meet with the companies involved and any trade body that is active in the area of remanufacturing’.
In one of the few proposals accepted, the government said it would consider the recommended reform to the packaging recovery note (PRN) system to include an ‘offset’ for ‘lower charge products that have higher recycled content’. It explained it is considering the proposal as part of its ‘current work looking at the PRN system’ and is ‘considering all scenarios’.
Directing standardised collections
The EAC had suggested that although councils ‘need to tailor waste services to local needs’, government needed to issue ‘clear guidance that directs local authorities in England towards a more standard approach’, including ‘separation systems that enable reliable delivery of compatible sorted waste products to all recyclers, separate food waste collections, and a ban on food waste to landfill’.
Although government agreed with the localism approach, it pointed out that from January 2015 there will be a ‘default system’ of separate recycling collections.
It also pointed to its (somewhat controversial) Weekly Collection Support Scheme and Recycling Reward Scheme as examples of its work in helping councils ‘deliver more frequent collections’ and ‘making recycling easier for households’.
However, the report states that ‘the government has no plans to compel councils to adopt household food waste collections’.
Looking to the EAC’s suggestion to introduce mandatory reporting on the electronic duty of care (edoc) system, government said it would ‘work with the industry to consider whether a mandatory system would be appropriate and beneficial and economically viable for both the sector and to government‘, but noted that it will be ‘encouraging a digital by default approach across all business’. (The Chartered Institution of Wastes Management (CIWM) suggested earlier this year that the UK government should ‘seriously consider’ making edoc mandatory to ‘provide us with much more accurate data on the waste that is being produced’.)
Embedding the circular economy into industrial strategy
Finally, the government agreed with the committee’s suggestion that the circular economy be ‘an integral part of Departmental Business Plans’ and has invited the Green Economy Council to independently review sustainable elements of the industrial strategies and make recommendations.
It added that once these have been received, government will ‘be in a position to review if additional work concerning sustainability issues within the industrial strategies is necessary’.
Government is ‘refusing to take basic steps to reduce waste’
The government response has been largely criticised by the EAC, with Chair Joan Walley MP arguing that MPs seem to be actively ‘refusing’ to take steps to end the ‘throwaway society’.
She said: “The disposable society simply isn’t sustainable in the twenty-first century. Innovative companies in the UK, like B&Q and M&S, recognise this and are already demonstrating that using resources less wastefully is the future of business. Yet our government seems to have its head in the sand and is refusing to take basic steps to reduce the amount of food and resources we waste.”
The EAC also argued that government’s claim that its hands were tied on VAT is bogus, as member states are allowed to implement a reduced rate of VAT for certain goods and services (and the UK has previously reduced VAT rates on new build construction materials, energy and the professional installation of energy-saving products).
But Walley conceded: “If the government is unable to introduce differential VAT rates on recycled products under existing arrangements, ministers should make the case for a change in the rules at an EU level as part of the discussions due to take place on the [European] Commission’s circular economy proposals.
“Breaking the link between primary resource use and economic growth is essential if we want to create a truly sustainable economic system that can cope with rising global demand and population growth. It is possible, and many businesses are showing real leadership in becoming more resource efficient. But we need the government to create a framework where companies and consumers are rewarded for doing the right thing.”
The waste and resources industry has also voiced its frustration and disappointment with the lack of government action on the circular economy.