The Conservatives have vowed to scrap the extended producer responsibility (EPR) packaging tax if they return to power, branding it as an “administrative nightmare” for businesses.
Shadow chancellor Andrew Griffith told the party’s conference in Birmingham yesterday the tax had hit companies fighting the cost of living crisis with a huge tax burden, and put pressure on food inflation with the price hikes being passed on to consumers.
Retail bosses welcomed the pledge, saying EPR had saddled producers with a £3bn burden which was making the task of containing food price inflation harder.
Griffith told the conference EPR was an “administrative nightmare that puts up the price of every supermarket shop”.
”We will scrap Labour’s packaging tax,” he vowed, even though it was under the Conservatives and then environment secretary Michael Gove that the tax was first proposed.
“It’s a tax that most people have never heard of. But it’s the sort of thing the old Conservative party went along with,” Griffith added.
“We are unafraid to tell the truth and when we see Labour doing economic self-harm or adding cost to businesses we will never hesitate to call them out.”
EPR has been hugely controversial with businesses. The first bills landed last year and large producers are currently submitting their packaging figures which will decide next year’s bills, with several major businesses already blaming the tax for a drag on profits.
The move came as the Tories promised to cut at least one tax in every budget if they came back to government.
The party also pledged to scrap the Environment Agency as part of a massive “bonfire” of regulation, with the agency responsible for EPR enforcement, as well as the govenment’s HFSS promotions restrictions among other regulations.
BRC CEO Helen Dickinson welcomed the party’s pledge to ditch EPR.
“Packaging costs have soared, and producers are now paying three taxes to recycle the same materials to the tune of nearly £3bn a year – costs which push up prices and hold back hiring,” she said. “It’s high time to review these taxes and end the triple taxation once and for all.”
The shift in policy means the Conservatives have now backtracked on two major sustainability policies introduced under Gove, with the party also axing its support for the deposit return scheme (DRS) at the start of last year, less than a year after the Tory government announced the October 2027 start date.
Then shadow business secretary Griffith told parliament the scheme would have a net cost to business of £288m a year, describing the plans as an “anti-growth measure”.
“That would be another unsustainable cost heaped onto business, which would be an unwelcome addition to the growing headwinds on enterprise that this government has created,” he said at the time.
Karen Betts, Chief Executive, Food and Drink Federation said: “With EPR, DRS, PRNs, and PPT, we’ve ended up with an alphabet soup of overlapping packaging taxes.
“They are adding billions to the cost of making food and drink. This is pushing up prices in shops and deterring investment in UK manufacturing. Government urgently needs to get a handle on spiralling costs by streamlining these policies and getting behind recycling reforms that are value for money.”
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