The government’s £2bn a year extended producer responsibility strategy has become a retrograde “plastic tax”, without any levers for the industry to deliver environmental or operational outcomes, a major new cross-party report has warned.
The report by the Policy Exchange think tank calls for an “immediate” review of the embattled strategy and urges ministers to design alternative proposals to allow a producer-led system.
Policy Exchange’s report highlights a raft of government regulations it says have been introduced with the best of intentions but risk causing huge harm to the food and drink sector and food security.
Last month, Defra unveiled the “eye-watering” fees companies will pay under EPR when the first invoices go out in October next year. It put the range of fees at £130 to £655 per tonne, depending on material type, aimed at making the industry responsible for the cost of packaging recycling.
Read more: Packaging tax: Defra’s eye-watering EPR recycling fees shock
The Policy Exchange report says: “Shifting to more sustainable packaging is increasingly supported by consumers and NGOs, who understand this as a way to reduce negative impacts on the environment.”
But it adds: “Under the current UK government’s approach for packaging EPR, whilst producers have the financial responsibility and legal accountability to meet recycling targets, all the key operational functions will reside with a public sector scheme administrator, at least initially.
“Without any ability to directly control any of the operational levers of the system, EPR risks becoming essentially a transfer of costs from local authorities to producers and therefore akin to a tax.
“Therefore, the decision to appoint a public sector body as the scheme administrator for the UK EPR scheme should be reviewed immediately and certainly within the first year of the scheme being launched in favour of moving to a producer-led model.
“Having a fully producer-led scheme working in tandem with the rest of the value chain is the only way that producers will be able to meet the government’s ambitious recycling targets and wider environmental goals.”
Policy Exchange, whose report is backed by a cross-party group of MPs and peers, as well as industry leaders, calls for the government to place food security at the heart of its industrial strategy and plans for growth. It warns policies like EPR instead risk piling extra costs on manufacturers, which will be passed on to consumers.
It argues food manufacturing has absorbed major additional costs over the past couple of years, including increased energy and input costs, reducing available funds for future investment.
“The burden of regulation has been substantial… including changing trading rules, environmental and packaging legislation, and food labelling requirements as well as standard consumer regulation, where even if the policy goals are important, the repetitive and duplicatory nature of reporting becomes a burden,” it says.
“Well-functioning and flexible free markets have historically been the best guarantor of food security at both a national and global level. Yet the impact of well-intentioned regulation means that we risk de-commoditising commodities within the food sector by turning standard products into bespoke ones, reducing flexibility and increasing costs for consumers.”
Other key recommendations include the development of a Food Security Transformation Fund focusing on technology investment, a fast-track approval process for products that have been approved by trusted regulatory regimes in other countries, and a contingency framework for major food supply crises, to allow food suppliers to modify their inputs during periods of geopolitical disruption.
Fiona Kendrick, former CEO of Nestlé UK & Ireland, one of the industry leaders backing the report, said: “Strengthening UK food security must be a national economic priority along with defence and energy security.
“Against the backdrop of increased geopolitical instability and climate change, we cannot assume that our food system will always withstand shocks.
“The UK government should take forward these specific recommendations, including the development of a National Food Security Strategy, in collaboration with the entire food value chain to deliver a more secure and resilient food system that invests for the future.”
FDF CEO Karen Betts said: “We welcome this insightful report from the Policy Exchange, which rightly puts food and drink at the heart of Whitehall policymaking.
“The UK has a highly sophisticated food system, which supports everyone’s daily lives by providing a wide range of affordable, safe and nutritious food and drink. But we must not take it for granted.
“Challenges lie ahead which need investment if our food system is to remain secure – from the innovation needed to tackle climate change, raise productivity, and invest in new products, to keeping prices fair for suppliers and consumers, and ensuring the UK strikes the right balance between domestic production and trade.
“Taking the right policy decisions now, weighed across Whitehall departments and as recommended by Policy Exchange, will lay the foundations for UK food security into the future.”
BRC director of food and sustainability Andrew Opie said: “It is important the new government strengthens the UK’s food security, ensuring we maximise UK food production.
“Supermarkets already source the vast majority of their food from the UK, but would increase this further if barriers were removed to allow more production.
“Customers can already choose from a wide range of British produce, in-store and online, all of which is clearly labelled to allow them to make an informed decision when doing their shopping.”
No comments yet