Levy 'needed to fund mass recycling': Leading companies want new laws to back green programme. Nicholas Schoon reports

A PLAN to make household recycling of waste packaging material the norm by 2000 is challenged by major uncertainties, it emerged yesterday.

One of the most important concerns the need for new recycling laws which would compel all manufacturers using packaging to pay a levy. The money raised would be used to boost recycling. The costs would be passed on to consumers and amount to about 1p in every pounds 10 of goods bought.

The consortium of 28 leading companies which devised the plan has told John Gummer, the Secretary of State for the Environment, that legislation is essential in the next parliamentary session in order to prevent unscrupulous firms dodging the levy and obtaining an unfair advantage.

Mr Gummer may agree, but he was unable to make any promises when he met senior executives from the 28 on Monday. In fact, it was Mr Gummer's threat to legislate for compulsory recycling which pressurised the consortium into devising the plan. Now the tables have been turned. The consortium includes leading supermarket and high street names, plastics, detergents and food and drink manufacturers. It intends to set up a company called Valpak this year to run the levy and introduce the charges in 1995, raising pounds 100m a year for the next few years. The levy would be paid either by packaging material manufacturers - glass, plastic, cans, paper - or the companies which fill the containers, such as food, drink and detergent manufacturers, or both.

Some of the money would be used to subsidise the prices of waste packaging material, such as waste plastics and cardboard, to encourage local councils to collect them.

Progress in recycling depends heavily on steady, long-term prices for waste packaging material. But the supply (provided by an increasingly 'green' public) has sometimes exceeded demand, leading to gluts and price slumps. Matters have been made worse by a chaotic German national recycling scheme which has disrupted waste material markets across Europe and beyond.

Peter Hindle, a Proctor & Gamble executive who played a leading role in devising the plan, said if market conditions were favourable the levy would have to provide less than pounds 100m a year by 2000. But if they continued to be unfavourable, the amount might have to rise to pounds 500m a year.

Andrea Davies, of the National Recycling Forum, said the local councils that collect Britain's household rubbish would be sceptical about the plan and challenge many of its assumptions. Ms Davies, the recycling officer for the London borough of Hounslow, believes the Government will have to play a leading role if recyling is to grow, posssibly encouraging it by taxing the use of virgin materials and energy.

The plan declares that by 2000 up to 85 per cent of homes should either be within a couple of minutes walk of recycling banks or be served by a door-to-door collection service taking away their recyclable packaging waste (which households would have to keep apart from the rest of their rubbish).

In total, just over one third of the 3.7 million tons of bottles, cans, cartons and wrapping material reaching homes each year would be recycled. At present less than one seventh is.

Recycling of the 4.3 million tons of commercial packaging material (used when goods move between factories and shops) would be at a higher level. Eight per cent of total packaging waste would be burnt in incinerators, producing heat and electricity.