Wrapper tax could add extra £96 to household cost of living

Embargoed: 00:01 Saturday 19 March 2022

The TaxPayers’ Alliance (TPA) has calculated that packaging waste charges could cost households an extra £96 a year on their shopping bills, despite rubbish collection already being covered as part of council tax. 

The proposed reforms from the Department for Environment, Food and Rural Affairs (DEFRA) to the extended producer responsibility (EPR) scheme mean producers would have to pay the full cost for recycling packaging waste, approximately £2.7 billion. This was due to come into force in 2023, but DEFRA recently announced the first phase will be delayed.  

Food and drink industries are the largest users of packaging, meaning the tax is likely to hike the cost of grocery shopping. This could see households paying an extra £5,280 on shopping bills over their lifetimes. And it comes despite the costs of rubbish collection already being included in council tax bills, which cost households around £79,415 across their lives. 

The EPR reforms pile onto other government policies which will put pressure on the cost of living. The TPA estimates that the wrapper tax, plastic bag levy, and online sales tax could together cost £284 a year, the same as two months of shopping for the poorest households.

The TaxPayers’ Alliance is calling on the government to scrap the wrapper tax and protect consumers from an even higher cost of living, or at least commit to a commensurate cut in council tax.

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Key findings:

• Under proposed extended producer responsibility changes, the annual packaging waste management costs that producers will have to pay will be approximately £2.7 billion.

• It seems likely that impacted producers will have to increase prices for consumers, thereby increasing the cost of a weekly shop.

• If all affected producers across all industries decided to pass the entire £2.7 billion cost onto taxpayers, it would amount to each household paying an extra £96 per year.

• Without direction from the government, taxpayers will likely be paying twice for waste collection, through both council tax and higher prices.

• With taxes rising and the energy price cap also going up to almost £2,000, taxpayers are facing a cost of living crisis.

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John O’Connell, chief executive of the TaxPayers' Alliance, said:

“The wrapper tax would hit struggling families who are already facing rising food, energy and council tax bills. 

“It will squeeze the poorest households by hiking up the cost of everyday essentials at the shops, yet the government hasn't announced any plans to soften the blow. 

“Ministers must ease the burden on Brits before proceeding with this wrapper tax.”

TPA spokespeople are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)

Media contact:

Danielle Boxall
Media Campaign Manager, TaxPayers' Alliance
[email protected]
24-hour media hotline: 07795 084 113 (no texts)

Notes to editors:

1. Founded in 2004 by Matthew Elliott and Andrew Allum, the TaxPayers' Alliance (TPA) campaigns to reform taxes and public services, cut waste and speak up for British taxpayers. Find out more at www.taxpayersalliance.com.
   
   

2. TaxPayers' Alliance's advisory council.
   
   

3. Previous TaxPayers’ Alliance research found average households will pay over £1 million in tax in a lifetime, including £79,415 of council tax.
   
   

4. The TaxPayers’ Alliance found that increasing the plastic bag charge to 10p would cost consumers £1.03 billion over the next decade.