A senior Labour MP is calling on the government to abandon the Extended Producer Responsibility (EPR) scheme, a new packaging tax that retailers warn could lead to job losses and higher consumer prices. Sarah Champion, chair of the Commons international development committee, is set to lead a parliamentary debate opposing the policy, which is being gradually introduced and could cost shops and manufacturers up to £1.6 billion this year.
The EPR scheme aims to shift the financial responsibility for recycling household packaging from local councils to producers and retailers. However, the British Retail Consortium (BRC) has raised concerns that the tax will increase food inflation by 0.5%, adding further pressure on the high street amid ongoing economic challenges.
Champion criticized the design and implementation of the policy, describing it as fundamentally flawed and counterproductive. She emphasized that charging companies based on the weight of their packaging risks penalizing glass manufacturers, despite glass being more environmentally sustainable than plastic alternatives. “It cannot be right that a plastic bottle should be a more cost-effective packaging choice than an infinitely recyclable glass bottle as a direct result of a government policy designed to encourage sustainable and environmentally friendly packaging choices,” she said.
Andrew Opie, director of food and sustainability at the BRC, noted that domestic cost pressures have been compounded by external factors such as the conflict in Iran. He urged government action to mitigate the impact ahead of Christmas, highlighting the substantial costs the packaging tax will impose on retailers.
The EPR model has been introduced alongside a range of other cost increases affecting businesses, with a recent Commons business and trade committee inquiry reporting that small retailers are experiencing stress levels comparable to those during the pandemic.
On the other hand, Environment Minister Mary Creagh defended the policy, stating that the scheme shifts the financial burden of managing packaging waste from taxpayers to producers. She noted that the funds collected help local authorities and encourage producers to reduce packaging waste and use materials that are easier to recycle.
When questioned about the potential employment effects, Creagh acknowledged ongoing monitoring of the policy’s implementation and its impact. She added that the government will continue to evaluate evidence from the scheme’s rollout and engage with industry groups, including representatives from the glass sector, as the process unfolds.