Yesterday, Theresa May chaired the first meeting of a new cabinet committee focused on building “an economy that works for everyone", which will prioritise developing a strong industrial strategy, encouraging innovation, boosting productivity and creating opportunities for the young. This newly-created Economy and Industrial Strategy Committee will look at addressing long-term productivity growth, encouraging innovation, and focusing on the industries and technologies that could give the UK a competitive advantage. Surely this is a fabulous chance to ensure that the principles of the circular economy are firmly embedded in the future plans for the country?

A successful economy builds resilience, efficiency, and opportunity, supports innovation, and stimulates business growth, supports the development of new employment opportunities, and generates demand for new skills. And though the phrase ‘circular economy’ hasn’t featured in the mainstream headlines, surely that’s the term which puts the Economy and Industrial Strategy Committee’s goals into a nutshell?

Last week I was privileged to be invited to attend a two-day event at MVV Environment Devonport Ltd’s facility in Plymouth, which was hosted by the Prince of Wales’s Corporate Leaders Group, with BITC guests, and attended by HRH Prince of Wales himself. Thirty industry leaders, from across a range of sectors, came together to discuss how to enhance progress towards circularity by innovating and maximising value from raw materials and resources. Collectively we agreed, very early in the debate, that this period of political change should be viewed as an opportunity to amend some of the current deficiencies in our policies.

The best chance to drive change towards a circular economy would be for the Committee and the incoming ministers – the new Secretary of State for Environment, Andrea Leadsom MP, and the appointment of Thérèse Coffey as the new waste and recycling minister – to view the availability of the secondary commodities, which could potentially arise in the UK as post-consumer ‘waste’, as a chance to re-invigorate British (re)manufacturing sectors and onshore parts of some supply chains for raw materials. This, however, needs a change in policy thinking to recognise the business potential, rather than the current waste-focused regulation. There are examples of countries around the globe where this change has been successfully realised; in 1990, Japan launched a fundamental restructuring of all areas of economic activity nationally, from manufacturing, to building and construction, and food service. In essence, Japan has established policies which have at their heart the principle that the waste from one process becomes the feedstock for another.

To achieve this in the UK we need a number of significant changes. We need:

• a comprehensive policy framework for resource management to support sustainable production and consumption
• resource efficiency indicators which can be applied across the whole economy and which are supported by resource flow accounting
• a move towards a consumption hierarchy which mirrors the waste management hierarchy, which these circularity policies can be plugged into, including both materials and energy within its vision.
• regulation and incentives which drive better sorting and reprocessing to improve the quality of material, such that it is suitable for the demands of the manufacturing sector, and addresses the disconnect between secondary commodity prices and virgin prices. (Secondary commodity prices tend to track virgin material prices and not reflect the cost of manufacture. To kick-start greater procurement of secondary raw materials and protect the recycling industry while it grows and develops, this link needs to be broken).
• to support the resource management sector by encouraging greater public sector procurement activity in the secondary commodity market place.

The circular economy is about more than just the reprocessing of material streams; it also embraces reuse and repair of products, to keep them at their maximum potential for as long as possible. This activity is costly, and requires specific skill sets, but it also represents a fantastic opportunity to grow the UK’s workforce and skills base. It needs a re-balancing of labour costs to achieve this, but the resulting opportunities for increased apprenticeships could be significant; and, at a time when some of our industries are starting to experience ageing workforces, there has never been a better time to look at innovative ways to get younger people involved.

Changes to producer responsibility legislation to develop extended obligations could be a solution to increasing both repair/reuse and recycling. Yet, it’s clear that in a period of potential economic slowdown (as has started to be indicated by some of the recent economic polls for research agencies and the media), any environmental costs or ‘taxes’ must be carefully balanced, to avoid unnecessary impacts on business productivity and economic performance in other sectors. There is a temptation therefore, to consider the option of less regulation at this time, and hope that the freeing up of resources within the private sector could in turn generate greater innovation in the circular economy space. But, in truth, the situation is more complex and requires a combination of policy, legislation and financial incentives to drive the necessary change. To this end, it clearly needs the involvement of multiple government departments from Defra and the new Department for Business, Energy and Industrial Strategy (BEIS) to Treasury, and consultation with a wide range of industry and professional stakeholders.

In the short to medium term, the UK needs to be in a strong position to address the real and likely day to day issues associated with the implementation of circular economy principles in the changing political and economic climate. Waste and secondary material exports, along with addressing the issue of material specifications for secondary material markets, could become more problematic if and when border controls change and if waste definitions and material specifications vary between the UK and European end markets; and support is needed to de-risk recycling business models while there is volatility in the value of pound sterling on the global currency exchange.

Further ahead, could it be possible to imagine policies that would actively reduce resource consumption in the UK, and develop a harmonised approach to the collection of recyclable materials from households, as well as the commercial and industrial sectors? Could the UK take a lead in adding jobs and value to the economy through the adoption of the tenets of the circular economy?

Whatever your views on what the various and diverse stakeholders in the circular economy supply chain(s) need to do to bring about a more sustainable model of production and consumption, it is apparent that, as professionals in the industry, we have a small window of opportunity to influence the next resource revolution. And within that window of opportunity, we need to move it closer to the wisdom economy model which preserves resources for future generations, while at the same time, allowing citizens of the world to continue to consume the goods and services that they desire as our collective demand for a better quality of life continues.

Debbie Hitchen is a Director of Anthesis.

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