Leader of the pack
During his time as Secretary of State for the Environment, Lord Deben cultivated an impressive portfolio. Speaking to Resource, he recalls introducing the Packaging Recovery Note (PRN) system and landfill tax. He also reflects on the UK’s prospective Deposit Return Scheme (DRS) and the role of today’s waste industry.
During his time as Secretary of State for the Environment within John Major’s government (1993-97), Lord Deben saw the formation of several significant policies – the Environment Act, the Landfill Tax, and the PRN system – all of which still have a lasting effect today.
Now a member of the House of Lords, Lord Deben continues to influence the environmental sector, chairing sustainability consultancy Sancroft International and recycling compliance scheme Valpak. He also serves as a trustee of climate change charity Cool Earth and ocean conservation charity Blue Marine Foundation.
Described by Friends of the Earth as ‘the best Environment Secretary we’ve ever had’, his experience in the field prompted his appointment as chairman of the Committee on Climate Change in 2012, overseeing the independent body in advising the UK and devolved governments’ progress on emissions reduction.
The PRN system: ensuring producers pay
As Environment Secretary, he launched the PRN system that is still in place over 20 years later. The scheme, which places an obligation on producers to purchase PRNs to offset the packaging they place into the UK market, has played a pivotal role in packaging recycling.
Recalling its inception, Lord Deben explains how the PRN system was influenced by recycling policy on mainland Europe: “The Germans produced this system that insisted upon people recycling but they didn’t have the resources to do the recycling itself, so they started to export their materials, particularly plastics, to Britain and France. And they did so with a [significant domestic incentive], so they undermined our own system.”
He continues: “And so we decided to invent a market-based system, with competition to lead prices down, that enabled producers to do whatever they liked, so long as they met the recycling targets.”
While Lord Deben believes in the efficacy of a free market system, this needs to operate within constraints to price in any downstream failings. He observes: ”If producers are going to sell a cup, then they mustn’t do it in a way which means that the public has to deal with the remains of it after it’s used. The producer must pay for its recycling. That’s got to be part of the market.”
As chairman of Valpak, the UK’s largest packaging compliance scheme, Lord Deben has a track record of working with producers. These companies that put packaging on the shelves, he contends, are now ‘beginning to realise’ the logic of the producer responsibility system that has many players.
He adds: “I have to make sure that we can deliver our offering. We’ve got to deliver it to the price which is at least the same as, or less than, the competition. You’ve got to fight in the marketplace all the time for your spot.”
Any changes made to the PRN system, Lord Deben maintains, must be underpinned by that same competitive market structure: “We need a system whereby the Government sets the parameters and polices those parameters, but it’s up to the market to deliver. If the market delivers, then the price will be as low as it can be.”
Would a UK DRS deliver?
Defra opened a consultation about a proposed DRS for England earlier this year, which would see consumers paying a small deposit for plastic and glass bottles, refundable on the packaging’s return. A critic of DRS, Lord Deben remarks that they are ‘a nonsense’ and an example of ‘gesture politics’. With 74 per cent of plastic bottles already being recycled, the remaining 26 per cent – largely made up of litter – could be tackled by a more effective DRS that simply targets single-use ‘on the go’ bottles: “There’s a simple and cheap way of doing [most recycling] called kerbside, and that will be damaged. Local authorities will derive less financial benefit from recycling.”
A central concern he has for the proposed DRS is that it will hurt confidence in environmental policy, with the potential to be a ‘very expensive’ system that ‘won’t actually deliver what it should deliver’. He also believes that such a scheme will be ‘very, very tough for the poorest families’ who would ‘pay upfront and receive the money afterwards’, adding ‘if that’s the best way of doing it, then we have to do something about our support system to accommodate that’.
Lord Deben says that the Government’s development of the DRS has been influenced by several voices including the Scottish Government, young people, and (‘puritanical’) Greenpeace. In response, he sees his role to be the counterpoint and ‘keep people’s feet to the fire of facts’.
“We have to use our reason to do things in the most cost-effective way, and to not be carried away by supplementary theological ideas, which is exactly what I think some of the campaigners have.”
The Landfill Tax: rehabilitating the ‘dirty man of Europe’
Another significant product of Lord Deben’s tenure as Environment Secretary is the landfill tax. This lasting policy sees organisations paying an additional fee on top of regular landfill charges, deterring landfill use.
Reflecting on the UK’s environmental record before the tax, he recalls how others viewed this country as ‘the dirty man of Europe.’ The decision to introduce a fiscal mechanism to drive waste out of landfills is something he generously credits to his former colleague Ken Clarke, Chancellor of the Exchequer from 1993-97.
Lord Deben was keen that the revenue from landfill tax would be associated with environmental improvements. Still, it was a challenge to get support for this: “There was a huge argument about part of the text, which described our plan to invest in the areas around the landfill sites that we needed, using proceeds from the tax alongside revenue from waste companies.”
The ring-fencing of tax for a particular purpose, known as hypothecation, presented an obstacle in the development of the policy: “I always remember the Mandarin who was with us saying, ‘It’s a good idea, but of course, we couldn’t possibly do it because that would be hypothecation. And I remember Ken saying, ‘Well, we are going to do it. I don’t care what it’s called; we are going to do it.’ The man almost hit the floor. I had explained how this would be good for the improvement of the environment of birds. Ken Clarke is a very keen bird watcher.”
This provided a foundation for creating what would become the Landfill Tax Credits Scheme (LTCS), but Lord Deben recounts, it was not an easy pill for Clarke’s department to swallow.
“The Treasury wanted to narrow the hypothecation, so the tax had to be associated directly with the improvement of the immediate environment. We had one particular thing about churches. There was one church I knew about in Frindsbury, a lovely medieval church, which was now stuck between two huge chalk pits. As they were filling these chalk pits [with landfill], I wanted it to be possible for some money to go to the maintenance of this church.
“Phillip Oppenheim was the junior minister responsible in those days, and he said, ‘The whole purpose of this is to enable people to make decisions about their own environment. And if the thing they want is to have the church bells ringing, then that’s what the money should be spent on.’ But the moment the new government came in, the treasury stopped the hypothecation, so all the proceeds went into the treasury.”
As a result, the idea emerged to create categories in the LTCS to support community buildings and churches. These have since proved to be the most enduring after the Government reformed the scheme in 2003.
Waste and recycling: an ‘environmental’ industry?
Fearing that the word ‘environmental’ has become more of a sales term to the waste industry rather than a central driving force behind it, Lord Deben notes an inherent contradiction in the industry: “I always find it suspicious when organisations refer to themselves as environmental. If you go around the countryside, you’d see these large collecting lorries from various companies, all of which have the word environmental written on them.”
As he sees it, the problem is that leaders in the waste sector don’t see themselves in an industry that needs to report on their individual environmental performance. However, Lord Deben believes that the blame lies, to some extent, with the Government.
“The Government hasn’t played that governmental card of saying you [the waste industry] matter, and we want to have a proper program for you, right across the board. It is a difficulty because the big companies are the ones in the end who have to set those standards and are competed with at every point by small companies.”
He continues: “The problem the waste industry is going to hit is it’s going to have to provide [environmental] information increasingly. First of all, to its customers, who will demand it because they’ve got to have an explanation for their customers, and above all, to their finances, because the financial world has suddenly understood this.
“Sustainability and climate change are now key issues that people who lend you money talk about. So, if you’re a business, you’re going to have to answer to your finances on this sort of subject. And if you can’t measure it, it won’t count. That’s why it’s so important.”