Rishi Sunak intends to change the packaging tax

The Prime Minister has announced a two-year postponement of the government's «buy one, get one free» junk food ban. : Brendan Smialowski/Getty

Rishi Sunak is preparing to delay a new packaging tax after objections from MPs and retailers over the costs it will add to household purchase bills.

The Telegraph understands that ministers keep talking about postponing a planned rollout of a scheme that would require retailers and manufacturers to charge boards for recycling their packaging.

This will be the second major government initiative to be delayed in recent days from for fear of its consequences. on consumer bills, amid soaring inflation and the prospect of a general election next spring.

The Prime Minister announced a two-year postponement of the government's «buy one, get one free» ban on unhealthy food deals, acknowledging that the policy would be «unfair» to shoppers during a cost-of-living crisis.

Consumer Burden

Analysis by the Institute of Economics (IEA) shows that without delay, the government's planned health and environmental measures would push consumer bills up to £1,035 from now until the end of next year. based on the government's own data.

An official analysis showed that a ban on multiple purchases of foods and drinks high in fat, salt or sugar, due to take effect this autumn, would eliminate £634 worth of «gifts» for the average household.

The Telegraph previously reported that a separate tax on packaging, formally called extended producer responsibility (EPR), would «likely» increase household bills by £40 a year, to £48. the official estimate in February 2022, before inflation soared, which further pushed those numbers up.

But local authorities insist the scheme is necessary to reduce packaging waste and protect the environment.< /p>«We can't wait.»

Linda Taylor, Conservative Council Leader for Cornwall and Local Government Association environmental spokesperson, said: “EPR is a transformational policy with broad partner support to reduce packaging waste, increase recyclability, save money and protect the environment. We cannot afford any further delays.»

The levy was developed by Michael Gove during his tenure as Environment Minister and billed as helping the UK to reduce waste and reach the net zero income goal, along with a separate introduction scheme returnable deposit systems for the purchase of bottles and cans of drinks. /p>

Together, these schemes could increase household spending on purchases by £140 a year, based on the British Retail Consortium's estimate of £4bn.

Officials say retailer funds will go to to work and improve local recycling councils, and the fees will incentivize firms to use less packaging.

But the British Retail Consortium (BRC), which represents large supermarkets, argues that many municipalities do not yet have the processing facilities needed to channel the money to its intended destination, and says it should be protected.

“Taxes burden retailers.”

Earlier this month, Helen Dickinson, chief executive of BRC, said: “Over the next year or so, a host of new regulations and taxes will burden retailers – and ultimately consumers – with higher costs .

“While inflation appears to be on the decline, these new measures put it at risk. The government needs to look at them one by one and decide whether to implement, defer or phase out each.”

The IEA's calculations also included £37 a year, which is expected to be added to consumer bills for funding for the ECO4 home energy efficiency scheme from next year, and £118 towards a planned hydrogen levy, which the government has now indicated could be waived. .

Matthew Lesh, IEA's director of public policy, said: «The hidden nanny state and zero churn measures are meant to raise bills across the board.

«These numbers are likely a perverse underestimation of additional household spending, associated with government measures.

“While British households are tightening their belts and trying to make ends meet, the government is adding fuel to the cost of living crisis.”

A spokesperson for the Department of the Environment, Food and Rural Affairs said: “As the Prime Minister stated, economic growth is an urgent priority for this government.

“Supporting business growth is an important part of this, which is why we want to provide a simple and effective system for our extended producer responsibility scheme that benefits both businesses and consumers.

“We are working closely with manufacturers, retailers and packaging companies to develop this scheme and delivery plans.”