The "shopping tax" will cost taxpayers £1.5 billion over a decade

September 16, 2015 12:02 AM

The TaxPayers' Alliance today reveals the real cost to families of the 5p mandatory charge for plastic bags which few realise will come into effect in less than a month's time. The charge - which all large retailers will be obliged to add to our shopping bills from 5th October - will add approximately £1.5 billion to the cost of living for English families over the next decade.

The key findings of our research are:

  • In nominal cash terms the total cost to consumers of the 5p mandatory plastic bag charge will amount to £1.5 billion over the next decade, comprising:
    • £1.1 billion for the 5p charge
    • £348 million for substitute bags for life and bin liners
    • £70 million of additional VAT
    • £5 million of taxpayer enforcement
  • This change will add £67 to the cost of living per household in England over ten years
  • The legislation is poorly targeted, with misleading use of the term "single-use plastic bag" failing to reflect that plastic bags are often re-used
  • Plastic bags account for less than two per cent of household waste and their substitution for more resource-intensive bags such as bin liners means that the stated environmental aims of the policy are unlikely to be achieved
  • Voluntary efforts between 2006 and 2009 resulted in a 48 per cent reduction in plastic bag use, suggesting that punitive, government-imposed solutions are unnecessary

Click here to read the full report

The research concludes that the mandatory 5p charge for plastic carrier bags is unlikely to fulfill its stated aim of reducing waste and resource use, while piling on additional costs that will be borne by consumers.

The report also highlights the considerable potential for the cost to consumers to rise further if the Government were to increase the charge in time, as happened in the Republic of Ireland, for example.

Jonathan Isaby, Chief Executive of the TaxPayers' Alliance, said:

"This plastic bag charge is to all intents and purposes a shopping tax which will add more to the cost of living for families throughout England. Politicians rightly identify the cost of living as a huge concern to people, yet seem oblivious to the irony that their own actions are adding to the burden.

"This is yet another example of a well-intentioned yet badly-thought out proposal which is being introduced without considering the full cost implications for consumers. Taken together with the minimal benefits for the environment and the potential for the charge to increase over time, this appears to be a very ill-considered policy which will fail to achieve its stated aims.

"Taxpayers can only hope that the Government will review this scheme sooner rather than later and conclude that there are other, more effective ways of helping the planet without burdening consumers and retailers with unnecessary costs and regulations."

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