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Business groups warn of raw material crunch

A coalition of business groups has warned of the threat to the UK economy from increasing pressure globally on material supplies.

In a letter to Government, the Material Security Working Group called for the Government’s Resource Security Action Plan to be strengthened with the formation of a new ‘Office of Resource Management’ to coordinate Whitehall activity and improvements in recycling.

The group, which includes the EEF manufacturers’ organisation, British Glass, British Plastics Federation, Confederation of Paper Industries, the Resource Association and Friends of the Earth, said increasing global demand and degrading ecosystems are putting pressure on material supplies. It said commodity price rises over the past decade had wiped out a century-long decline, with prices projected to escalate, despite recent fluctuations.

A recent survey by EEF found that 80% of manufacturing executives think access to materials is already a business risk and a threat to growth.

EEF head of climate and environment policy, Gareth Stace, said: “Whilst the government’s Resource Security Action Plan was a step in the right direction, it falls short of meeting the challenges we will face when obtaining new resources will become more difficult and costly.

“Government must now step up its ambitions and produce a bolder plan of action that deals with the challenges not just now but in the longer term. This is vital not just from an environmental perspective but to ensure a long term sustainable future for manufacturing and the wider economy.”

The Material Security Working Group called for:

  • An Office for Resource Management to deal with the crisis consistently;
  • A task force to review existing targets and recommend policy changes to improve recycling;
  • A ban preventing recyclable materials being sent to “energy from waste” plants and landfills unless there is an environmental and economic case for doing so

Friends of the Earth resource campaigner Julian Kirby, said: “The UK buries and burns at least £650m a year of valuable materials - wasting billions of pounds of business and public money.

“David Cameron must address the incoherent approach to resource security his Government has taken so far. A new Office of Resource Management would ensure all departments create jobs and boost the economy by slashing the waste of natural resources.”

Resource Association chief executive Ray Georgeson said a lack of co-ordination in Government policy was becoming a serious issue for manufacturers using recovered materials.

He said: “On the one hand, Government says it supports the growth of the UK green economy. On the other it makes it harder for UK manufacturers to compete fairly and obtain consistent high quality feedstock, through its low-key approach to improving the quality of MRF-derived recyclates and effectively allowing a PERN premium to accrue on plastics exported for reprocessing which discriminates against UK reprocessors. This is one reason why policy co-ordination through an Office for Resource Management is necessary.”

But one industry economist told MRW: “The EEF rightly recognises that resource prices have risen in the past decade. Commodity prices have always been cyclical though and this doesn’t tell us where they are going to go next. 

“Markets are the best way of allocating resources, not governments and policy makers. Keeping global markets open is the best way for government to help UK manufacturers secure resource supplies, not opening a new office.”

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