Following HM Treasury’s call for evidence on single-use plastics earlier this year, the Chancellor yesterday announced plans for a new tax on plastic packaging which contains less than 30% recycled plastic, subject to consultation.
The Treasury have clearly taken note of Wrap’s Plastics Pact commitments for 2025 and sought to bring forward the time interval for delivery by introducing a tax in April 2022. Over the last few years, I have been vocal about the need for government to speed up voluntary efforts, ensuring a level playing field for all producers.
However, as this tax will only affect packaging, it puts a great deal of pressure on Defra. They currently have a live consultation on banning plastic straws, plastic stemmed cotton buds and plastic drink stirrers, but further bans will be required to improve the environmental performance of non-packaging plastic items, now the Chancellor has chosen not to use taxation.
It is obvious that the Treasury have listened to the thousands of consultation responses, including our own feedback, which supported a cross-government approach. With Defra’s Resources and Waste Strategy imminent, it is sensible to kick the can down the road by choosing not to introduce anything too drastic at this stage.
They will, of course, claim this “demand pull” mechanism will create markets for secondary material. To a large extent they are correct, however, modulating producers’ fees based on additional factors, such as recyclability, will be needed if a dramatic shift in the waste management of plastic is to occur.
There was a nod towards other mechanisms required, with black plastics cited as a problematic waste stream that would be tackled through reform of the Packaging Producer Responsibility system. The indication that this reform and the new tax will be consulted on together in the coming months is further evidence of a joined-up approach.
Funding for innovative approaches
Given our efforts to increase collection of “on the go” packaging, the government’s pledge of £10 million to pioneer innovative approaches to boosting recycling and reducing litter is very welcome.
Furthermore, £10 million additional funding, added to the £20 million from earlier this year, for plastics R&D will go a long way towards helping to develop recycling innovation projects like this one.
No incineration tax
The government decided that now is not the time to introduce an “incineration tax”. However, they have left the door open to such a tax in future. It seems logical that once more recyclable products are designed, a measure to disincentivise material from being burned will be needed.
The “landfill tax” is widely regarded as the most successful mechanism in UK waste management of the last few decades and it will be increasingly hard for government to ignore it’s draw.
Coffee cup distraction
Despite the attractiveness of “latte levy” headlines, the government has not been distracted by this very minor waste management problem. Voluntary efforts, led by Costa, were recognised and no tax implemented.
But will the continued watchful eye of the Treasury encourage others to join the scheme?
You can find out more about the Budget here and also read this excellent report on single-use plastics here. If you'd like to discuss how anything in the budget may affect your compliance, please contaact our team.
Head of policy
Having gained a wealth of experience in regulatory affairs, waste issues and secondary commodity market analysis, Robbie uses his skills internally as an operational board member and externally to influence legislation change as head of policy. He is responsible for liaising with government, regulators and industry organisations to articulate complex views and interests and to provide high-level policy expertise, industry insight and market analysis to our members.
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