Harry Fairhead is a Policy Analyst for the TaxPayers’ Alliance.
The mandatory five pence charge on plastic bags to be introduced at all large retailers in England this October is a sad example of the attitude too often prevalent in politicians that “something must be done”. Sadly, the consequences of this on-the-hoof policy championed by Nick Clegg during his time in government will almost entirely land on we consumers.
As TaxPayers’ Alliance research published this morning shows, over ten years the costs of this charge will be just shy of £1.5 billion. This is made up of a combination of the 5p charge, increased purchases of bin liners and ‘bags for life’ and an additional £70 million of VAT.
The Government assumes that much of this cost will be offset by lower prices on the shelf, the hidden cost of providing plastic bags no longer being passed on by retailers. But this seems very unlikely given that profit margins are notoriously low in supermarkets (where this charge will be most prevalent); and if costs have previously been hidden, then there is little incentive to suddenly reveal them.
Moreover, supermarkets are expected to give the proceeds of this charge to unspecified ‘good causes’ and are only allowed to retain the (again unspecified) ‘reasonable costs’. According to DEFRA guidance, these do not include the costs of providing the bags, so there is little cost reduction for the retailer and consequently few savings to be passed on to the consumer. By any objective measure, this charge will hit consumers’ wallets.
The policy is supposed to mitigate the environmental impacts of plastic bag use, but even this does not stand up to scrutiny. Plastic bag use will probably fall; in Wales and Northern Ireland (where there are similar charges) it fell by over 70 per cent, but the substitution of more resource intensive ‘bags for life’ and increased bin liner use mean that the environmental aims of the policy largely go unfulfilled. For example, you have to use a cotton bag 131 times to give it less environmental impact than a single plastic bag used just once.
And it should be remembered that between 2006 and 2009 a concerted effort by retailers reduced plastic bag use by 48 per cent without having to impose a charge. Clearly, it is possible to achieve this policy’s aims without putting additional burdens on consumers.
The criticism that plastic bags make up a vast amount of waste is also ill-founded. Friends of the Earth found in 2006 that just 2 per cent of household waste was made up of plastic bags and bin liners. So any reductions in plastic bag use are unlikely to dramatically reduce the amount of waste produced by UK households.
Lastly this legislation is incredibly poorly designed. There are all sorts of exemptions ranging from bags without handles to paper bags to woven plastic bags and yet none for biodegradable bags. Moreover, retailers are expected to enforce this charge at self-service checkouts, an onerous task in some major supermarkets where there are banks of such machines. The fine if a retailer fails to enforce the charge or does not keep adequate records can be £5,000 rising up to £20,000 if they are judged to have failed to assist the local authority.
Understandably, polling for this legislation shows that the charge is very poorly understood, with over 70 per cent of respondents effectively unaware of the charge’s introduction. And the exemptions for small- and medium-sized businesses are considered “confusing” by 59 per cent and “surprising” by 61 per cent of respondents.
What can we say of this charge in conclusion? It is very costly to the consumer, it probably will not achieve its eco-friendly aims and the exemptions will just make life difficult. Like the universal free school meals programme (which the Government is rumoured to be considering scrapping), this policy is a hangover from Nick Clegg’s time in government and another case where we should not be afraid to break with the past.