Plastic bag charge: A little known tax that will cost £1.5bn over 10 years

Harry Fairhead
Even if the charge reduces the use of plastic bags, it fundamentally fails to address the problem of household waste (Source: Getty)

Did you know that you will soon be charged for each plastic carrier bag you use? From 5 October customers of large retailers in England will be charged 5p for each bag, but almost two thirds of people are effectively unaware of this new tax.

The total cost of this policy is almost £1.5bn over ten years - an inordinately large additional cost to household bills for a policy that is unlikely to have any meaningful impact on household waste.

It is equivalent to over £67 per household for the charge itself, additional bin liners and bags for life, VAT and taxpayer enforcement costs. This policy is certainly not consumer friendly and does nothing to reduce the cost of living.

Retailers are expected (but not obliged) to donate the proceeds of the charge to good causes. This seems unnecessarily vague. And while the aim of supporting charities is commendable, it would be easier to abolish the charge and let the public choose which causes they want to put their money towards.

Read more: Why the unhealthy relationship between charities and the state must end

The policy is hugely complicated with all sorts of exemptions being made dependent on the contents of each bag. For example, a plastic bag without handles is exempt, as is a woven plastic bag or bag intended for uncooked meats or loose seeds. Moreover, retailers are expected to enforce the charge at self-service checkouts which will be an onerous task with rows of thirty machines in some large supermarkets.

Even if the charge reduces the use of plastic bags, it fundamentally fails to address the problem of household waste.

Substitution of plastic bags for more resource intensive bags for life and bin liners mean that little resource savings are made. The Republic of Ireland’s levy on plastic bags was found by the Packaging and Films Association to have had “no overall impact” on resource use.

Read more: We should always heed the law of unintended consequences

In 2006 Friends of the Earth found that plastic bag and bin liners represented less than two per cent of UK household waste, so any reduction in use will have a very limited effect on the UK’s total household waste.

Besides, a voluntary initiative by British retailers between 2006 and 2009 resulted in a 48 per cent decrease in plastic bag use without having to charge the consumer.

Ultimately, this policy adds significant additional costs to the consumer, it is a very complicated policy which will create problems for both the consumer and the retailer and it is unlikely to achieve its eco-friendly aims.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

Related articles