August 10th, 2018
by Iona Horton
There’s no doubt that England’s 5p plastic carrier bag charge has had an impact. We’ve all either been or seen the person who, on forgetting to bring a bag to the shops, refuses to pay for one and proceeds to cram their groceries into every available pocket. After some near escapes involving eggs, I never go anywhere without my trusty reusable.
The primary intention of the charge, introduced in October 2015, is to be an economic instrument that changes behaviour. The charge of 5p for each single-use plastic carrier bag (SUPB) is a disincentive for shoppers to use a new bag and encourages them to reuse those they have. As the number of new SUPBs in circulation reduces, so does the potential for them to become litter.
But the charge isn’t as effective as it could be in achieving its aims, because of its limited scope and the way that the money it raises is spent.
A mixed bag
The charge is estimated so to have taken over nine billion bags out of circulation. The seven biggest supermarkets have reported an 86% reduction in plastic bag usage in 2017/18 compared with before the charge. A recent CEFAS study estimates that one knock-on effect has been a 50% reduction in plastic bags found in our coastal seas.
However, retailers with fewer than 250 employees do not have to charge for SUPBs – a “business friendly” exemption introduced despite objections from small business representatives. Defra estimated that SMEs have 27% of the relevant market, so excluding them from the charge is likely to have diluted its overall effect.
An equally important missed opportunity is the way that the money raised is spent. The sums involved are significant: in 2017/18 alone, after retailers costs were deducted, nearly £60 million from SUPB sales was given to charities and good causes. However, it’s up to retailers to choose whether to keep or donate the money, and which causes (if any) to support: under two-thirds of retailers currently donate.
Almost £15 million of potentially donatable funds was kept by retailers in 2017/18. Since the charge began in 2015 almost £35 million of potentially donatable funds has not been given to good causes, out of nearly £190 million raised in total. The opportunity to retain this income is something of a windfall for retailers, and there doesn’t seem to be any compelling reason why they shouldn’t be required to give it away, which would increase the positive impacts of the charge.
Nevertheless, the money given to good causes is substantial. To place it in context, the donations made from last year’s SUPB charge are more than double the £30 million additional funding announced in the November 2017 budget for the Environment Agency to tackle waste crime over the next four years. Alternatively, it’s nearly 10% of the £778 million local government spent on street cleaning services in 2015/16. But how effectively is the money being used?
People might be surprised to learn how little of the money is going to environmental causes. It’s difficult to disaggregate the figures, but of the 249 organisations that reported their proceeds from the charge in 2017/18, only 23 can clearly be seen to have donated (at least some of) the money to environmental causes. At least 190 donated to unconnected causes, including local charities chosen by customers or staff. Some registered charities whose shops are subject to the charge, such as Cats Protection and Sue Ryder, did the obvious thing and donated the proceeds to themselves.
Defra estimates that, over its first decade, the charge will raise up to £730 million for good causes: on the one hand, that’s significant potential to do good, but on the other it suggests that SUPB consumption is not expected to continue to fall due to the charge. Isn’t this a missed opportunity? Mightn’t the proceeds be better spent on measures that will further encourage behaviour change, or mitigate the harm caused by littered SUPBs?
So far this question of how best to spend the proceeds has not been given adequate attention. This is not to say that the causes that currently benefit are not worthy of donations, simply that it seems a little peculiar to use the SUPB charge as a means of generic fundraising. Wouldn’t the charge be more effective at achieving its intended outcome, reducing the negative impact of plastic bags, if the money raised was spent on litter-related activities?
The 5p charge is not a tax and the money from the charge does not go to the government. However, government could implement a system that directs where funds raised by the charge go or how they are spent. One option could be a restriction – retailers decide from an “approved list” of related causes, or must donate to causes that meet certain criteria. Alternatively, the money could go into a fund analogous to the Landfill Communities Fund, with approved organisations able to bid for funding for projects. Another option would be to give the money directly to existing organisations – or a new body – engaged in dealing with litter and its impacts.
Point of review
Fortunately, a measure of change is in prospect. The government’s 25 year environment plan includes a proposal to extend the plastic bag charge to small retailers, initially through voluntary agreements but with the option to make this compulsory if deemed necessary.
Government has also committed to a review of the charge before 5th October 2020. This would be a good opportunity to address the questions raised in this article and to explore possible solutions.
It is critical for the review to investigate whether the original aims of the charge – reduction in costs associated with littered SUPBs and a reduction in the greenhouse gas emissions associated with their production – are being achieved. If SMEs remain excluded from the charge, the impact of this decision compared with a more comprehensive approach should be examined.
To ensure that we have the best information possible on which to base decisions regarding the charge’s future, the review could consider the ways and areas in which we might best increase the monitoring of how many SUPBs are being issued.
But a truly valuable review would also make an assessment of the wider benefits to ecosystems and wildlife resulting from fewer plastic bags in the environment, and the potential additionality that would result from targeting the funds raised by the charge in ways that further advance that objective.
The charge has already had a big direct impact on bag consumption, but it appears that it could achieve considerably more. Until the charge is independently reviewed we won’t know the full extent of the benefits that could be realised; and without the evidence for policy change the true potential of the charge is likely to remain untapped.