New green tax labelled ‘own goal’ ahead of Budget
A new green tax coming into effect this week has been labeled an “own goal” for the Labour government and stoked fears it could lead to prices soaring.
The Extended Producer Responsibility (EPR) levy is designed to increase increasing recycling rates among local authorities, by passing on the costs onto the companies selling the products.
The government’s scheme will tax packaging based on its weight, meaning sustainable forms of packaging made in the UK such as glass, will be hit hardest.
Under the new tax, a standard bottle of wine will cost an additional 9p, while the cost of a 330ml beer bottle will rise by around 4p.
Spirit bottles will cost an extra 11p under the levy.
John Lewis said earlier in September that the EPR could contribute to its overall costs increasing by an extra £29m. Half of that total is expected to be due to the EPR with the rest because of National Insurance contributions.
At the end of June, senior industry figures warned that the tax could encourage firms to relocate their production abroad.
Most of the final fees, which are split by packaging type, are less punitive than indicative charges released by the government last year, but retailers, producers and hospitality firms sounded the alarm on the damaging effect a further levy will impose on struggling British firms.
In a rare joint statement, lobby groups for the glass, pubs, whisky, wine, spirit and hospitality industries warned the levy “goes against the UK government’s plans for growth” and accused ministers of ignoring frenzied representations from affected sectors.
‘This tax will hit everyone’
Sean Murphy, managing director at Encirc, said: “The new glass bottle tax is an economic and environmental own goal, hitting UK firms producing packaging that is far better for the environment than plastic.
“This tax will hit everyone – in the supermarkets, pubs, and glass factories that create thousands of jobs.
“It is a bitter blow for businesses such as ours which are investing heavily in green technology.
“The government must hit the pause button on this.
“Encirc is leading the industry in low-carbon manufacturing, from successful biofuel trials in Northern Ireland, to pioneering investment in hydrogen furnaces in Cheshire.
“An arbitrary measurement based on the weight of materials unfairly penalises glass and just doesn’t work.”
Encirc employs 2,000 people across the country, with sites in Cheshire, Bristol and Northern Ireland.