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.”
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