RICHARD ELDRED
A new “grocery tax” designed to achieve the Government’s Net Zero targets will push up household shopping bills by up to £1.4 billion a year. GB News has more.
The green tax will add as much as £56 to annual household shopping bills, according to Government calculations.
The scheme, which charges retailers and manufacturers based on their packaging materials usage, has been quietly passed into legislation as part of the U.K.’s waste reduction and Net Zero strategy. Critics warn the measure will increase food costs for families while creating additional bureaucracy for businesses.
Under the Extended Producer Responsibility (EPR) scheme, which comes into legal force on January 1st, 2025, businesses will face charges for packaging waste collection and disposal.
The system, originally devised by Michael Gove during his tenure as Environment Secretary, was previously put on hold following opposition from Conservative MPs and retailers. The first charges will be implemented in autumn 2025, shifting the cost burden from local authorities to manufacturers and retailers.
Despite the change in funding responsibility from council tax to businesses, there are no indications that councils will reduce resident taxes. According to Government forecasts, the scheme will increase household bills by £28 annually in a “low scenario”.
In the Government’s “central scenario”, costs will rise by £48 per year, while a “high scenario” could see increases of up to £56 annually. The British Retail Consortium believes Labour’s £1.4 billion cost estimate is too low, suggesting the true cost to retailers will be closer to £2 billion.
The Government expects 85% of costs will be passed on to consumers in a “central scenario”, rising to 100% in a “high scenario”. Lord McKinlay, chair of the Net Zero Scrutiny Committee, criticised the “rapidly introduced, yet little noticed grocery tax legislation”.
“It heaps more than a billion pounds of new and unnecessary costs on consumers, but as ever when Government departments estimate implementation costs, these are often hopelessly underplayed,” the Tory peer said.
He added: “It needs to be called out for what it is: yet another Net Zero tax which adds to consumer cost inflation, and further adds to the administrative burden on U.K. businesses. Another growth-destroying measure by an inept government.”
The Government has published a schedule of “base fees” showing varying charges for different packaging materials in 2025/26. Plastic packaging will face the highest charge at £485 per tonne, followed by “fibre-based composite” at £455 per tonne.
Paper or board packaging will incur the lowest fees at £215 per tonne. Alternative materials such as bamboo or hemp will be charged at £280 per tonne. The Government’s impact assessment acknowledges the policy will contribute to inflation, raising it by 0.07 per cent.
Lord Frost condemned the policy, stating: “Rishi Sunak’s government came up with this plan and then rightly realised it was too expensive to introduce. Keir Starmer’s Government doesn’t care about that.”
“They are obsessed with green politics and are quite happy to impose these new burdens on business which will boost inflation and push up food costs for every family,” he said. He added: “Starmer claims to care about growth but his actions show the opposite.”
Worth reading in full.
This article (‘Grocery Tax’ to Hike Britons’ Shopping Bills by £56 in Labour Net Zero ‘Inflation Boost’) was published by Daily Sceptic and is republished here under “Fair Use” with attribution to the author Richard Eldred
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Net zero ‘grocery tax’ to push up shopping bills by £1.4bn
Ministers accused of ‘quietly’ pushing green levy onto businesses for packaging waste, which will add up to £56 on yearly household costs
A new “grocery tax” designed to achieve the Government’s net zero targets will push up household shopping bills by up to £1.4 billion a year, The Telegraph can reveal.
Ministers have been accused of “quietly” passing legislation that will see as much as £56 added to household costs annually, according to the Government’s calculations.
The green levy – which will see retailers and manufacturers charged per tonne of packaging materials they use – is aimed at helping the UK to reduce waste and meet its net zero targets.
Under the scheme, they will be charged more for using plastic wrapping than for using paper or cardboard.
But critics have warned that the measure will “push up food costs for every family” while imposing red tape on businesses.
Families have already been hit by rising food prices in recent years, with inflation rising for the second month in a row last week in the wake of Rachel Reeves’s “Budget for Growth”.
According to the impact assessment of the incoming policy, published by the Department for Environment, Food and Rural Affairs (Defra), the new tax will lead to “retail sales increases of around £1.4 billion” in the first year.
The Government expects that in a “central scenario” 85 per cent of the costs will be passed on to consumers, rising to 100 per cent in a “high scenario”.
‘Another growth-destroying measure’
However, the British Retail Consortium (BRC) believes that £1.4 billion is an underestimation of the costs faced by retailers and the true cost will be closer to £2 billion.
The scheme – formally called the Extended Producer Responsibility (EPR) – will increase household bills by £28 a year in the low scenario, £48 in a central scenario or up to £56 in the high scenario, according to the government forecasts.
Lord McKinlay, a Tory peer and chair of the Net Zero Scrutiny Committee, said: “The rapidly introduced, yet little noticed ‘grocery tax’ legislation has quietly landed.
“It heaps more than a billion pounds of new and unnecessary costs on consumers, but as ever when government departments estimate implementation costs, these are often hopelessly underplayed.
“It needs to be called out for what it is: yet another net zero tax which adds to consumer cost inflation, and further adds to the administrative burden on UK businesses. Another growth-destroying measure by an inept Government.”
The scheme effectively places a tax on manufacturers and retailers for the cost of collecting and disposing of packaging waste, which is currently borne by local authorities and funded by council tax.
However, there is no suggestion that councils will reduce taxes imposed on residents when they begin benefiting from the funds.
The levy was originally devised by Michael Gove during his time as environment secretary. But after a backlash from Tory MPs and retailers over the costs it would add to household shopping bills, the Conservative government put the scheme on hold.
‘Obsessed with green politics’
Earlier this month, secondary legislation was passed that will see the levy come into legal force on Jan 1 2025, with the first charges for retailers due to be rolled out in autumn 2025.
Lord Frost said: “Rishi Sunak’s government came up with this plan and then rightly realised it was too expensive to introduce. Keir Starmer’s Government doesn’t care about that.
“They are obsessed with green politics and are quite happy to impose these new burdens on business which will boost inflation and push up food costs for every family. Starmer claims to care about growth but his actions show the opposite.”
On Friday, Defra published a schedule of “base fees” to indicate how much retailers will be charged for the collection and disposal per tonne of packaging in 2025-26, the first year of the scheme. The highest-cost material is plastic, for which they will be charged £485 per tonne, followed by “fibre-based composite” at £455 per tonne.
Meanwhile, paper or board packaging is the cheapest, costing £215 per tonne, with materials such as bamboo or hemp costing £280 per tonne.
The Government’s impact assessment of the policy also admits it will drive up inflation by 0.07 per cent.
‘World-class recycling system’
The Bank of England warned last month that Britain is already facing a fresh spike in inflation as Rachel Reeves’s tax-and-spend Budget piles extra pressure on households and businesses.
In his assessment of the Chancellor’s maiden Budget, governor Andrew Bailey said a “substantial” increase in public spending and tax changes that “clearly raise the cost of employment” will drive prices higher over the next three years.
The Telegraph: continue reading
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