Extended Producer Responsibility is a boring name for a boring regulation, but it is worth understanding if you want to see how the government squeezes the life out of British industry and contributes to the cost of living “crisis”.
The story begins, as such stories often do, with Theresa May and Michael Gove. After watching too many David Attenborough documentaries, Gove became obsessed with recycling. His first idea was to introduce a bottle deposit return scheme, which would have had huge operational costs and been largely pointless since everybody has a recycling bin at home. His second idea was Extended Producer Responsibility (EPR), which he said would “cement our place as a world leader in resource efficiency” by taxing businesses for every tonne of packaging they produce, on the basis that “the polluter pays”. Seven years and four Prime Ministers later, EPR came into force last April.
The logic of EPR is not entirely without merit. A company that produces packaging is not actually a “polluter” — although the end user might be — but there is an argument for making companies internalise the costs of recycling the packaging they produce. In effect, the policy takes billions of pounds from manufacturing firms and gives it to local authorities to spend on recycling and landfill.
The problem is one that is often overlooked by politicians. Since businesses get their money from consumers, an increase in costs to business is bound to lead to an increase in prices. Since it is consumers who pay the higher prices, the real question is whether it is better for recycling of widely used packaging to be paid for by individuals as taxpayers or by individuals as shoppers.
Read the rest at The Critic.
