by Steve Watson7 minute read
Back in July, six months after England adopted a five pence charge on single use plastic bags (SUPBs), the government released the first data showing how the measure has affected consumption. The headline figure reported in the media was a reduction of 83%, which looks like a fantastic result – especially considering that Wales, Scotland and Northern Ireland reported smaller reductions of 76%, 80% and 71% in the first years of their respective bans.
However, the fact that England appears to have achieved a greater reduction through a policy which is essentially a watered-down version of those in place elsewhere in the UK should set alarm bells ringing. As the more careful media reports note, the 83% headline figure is the reduction reported by England’s seven big supermarkets. In truth, there’s a great deal of doubt over the actual rate of single use plastic bag (SUPB) consumption in England.
The five pence charge applies to a total of 285 large retailers, all of which must now provide data on the number of SUPBs they sell to customers – but any businesses employing fewer than 250 people is exempt. Defra’s impact assessment indicates that small and medium sized enterprises (SMEs) have a 27% share of the market. That allows us to roughly estimate the overall consumption of SUPBs, including those from SMEs, since the charge was introduced. Assuming that where the charge is not applied it has had little impact, instead of the impressive headline figure of 83% the likely real reduction rate may be closer to 59%.
No such de minimis threshold, exempting SMEs, has been set elsewhere in the UK – Wales has a 10 employee de minimis on reporting, but not on charging – and the decision to set one in England went against the wishes of the majority of SMEs themselves. The British Retail Consortium – which represents businesses of all sizes – argued against the exemption, favouring the establishment of a level playing field for all retailers. Large retailers even expressed concerns that the exemption would introduce a dissonant element into an otherwise largely harmonious UK-wide policy approach.
Furthermore, the National Federation of Retail Newsagents (NFRN) argued that exempting small businesses from the charge is to their financial disadvantage, as they will end up “providing more carrier bags, free of charge, for fewer items”. While SMEs are of course free to charge on a voluntary basis, the NFRN believes that most would be reluctant to do so out of fear of losing business to less environmentally minded competitors. Due to the absence of data, we simply cannot know whether NFRN’s fears have been realised, with shoppers effectively stocking up on free bags from smaller businesses to use when they do a big shop.
Defra’s impact assessment made clear that a blanket charge would result in greater benefits to all relevant stakeholders. The assessment found that consumers would experience a net benefit overall, thanks to retailer savings from reduced SUPB demand and lower VAT payments being passed on to them. Under the exemption scenario, consumers were found to bear a net cost overall, because without the contribution of the fall in hidden costs from SMEs – i.e. the costs of bags being hidden in the price of goods – the costs of the charge and purchasing reusable bags outweigh all other savings.
Furthermore, it was estimated that a charge on all retailers would bring additional benefits to charities and local authorities with the latter expected to enjoy reductions in waste management cost of £43m. Based on the estimates used in similar impact assessments in Wales and Scotland, it would also save around £78m in litter-related externalities. By contrast, excluding SMEs from the charge was predicted to deliver smaller waste management and litter savings, of £30m and £59m respectively.
Government has in the past asked what the barriers are that prevent SMEs from adopting greener practices. Perhaps the tendency to unnecessarily exempt SMEs from sensible legislation may be part of the explanation. The failure to introduce a charge on bags from all retailers is a lamentable triumph of dogma over reason. The Defra impact assessment makes clear that a large retailer-only charge is the preferred option because:
“it is government policy to avoid imposing new regulatory requirements on SMEs where possible”.
This inflexible line means that, despite:
- the evidence suggesting that a blanket charge would bring about both greater environmental and economic benefits; and
- most small retailers wanting to be involved,
we are left with a weakened mechanism that certainly fails to reduce consumption in the way that it so easily might. What’s more, while the reporting mechanisms in place elsewhere in the UK are not perfect and don’t account for all those bags given out, the situation is far worse in England with so many businesses exempt from reporting how many SUPBs they hand out.
Even amongst the businesses that do now have to apply the charge and report their consumption, we simply don’t know the actual scale of the drop in SUPB use since the charge was introduced. For most large retailers it just isn’t possible to make a before-and-after comparison. Before the charge was introduced – along with a corresponding duty to measure consumption – only the big seven supermarkets were measuring the number of bags given out to shoppers, reporting this information directly to WRAP on a voluntary basis.
However, in this case the same is true for the first year reduction figures reported by Wales, Scotland and Northern Ireland. Prior to the introduction of a charge in these countries, consumption data was reported in the same way: by supermarkets to WRAP (in fact, reporting is still voluntary in Scotland).
Looking at the English data reporting consumption since the implementation of the charge, 61% of bags consumed by customers of large retailers were from the seven big supermarkets. Adding in the SME share of the market, all we really know is that there has been an 83% reduction in 45% of the market – a drop of 37%.
Are there any reasons for thinking that the big seven supermarkets would see a greater drop in consumption than other large retailers? One important consideration is that supermarkets provide alternative, reusable bags at the counter, while many high street retailers do not. In any one retail exchange, the charge on SUPBs may plausibly lead shoppers to purchase one of these larger, durable bags; while there may be some excess purchases of these bags, many will be brought back on subsequent visits, contributing to further reductions in bag use. By contrast, shoppers are less likely to be as well prepared when visiting many of the high street retailers included under the charge – it is easy to imagine someone buying a quick lunch from Greggs being likely to just fork out the five pence rather than juggling a steak slice, pop-bottle and a bag of yum-yums.
It’s also worth noting that not all of the big seven supermarkets previously reporting to WRAP are in the top seven distributors of bags under the charge. The published data reveals that both online retailer Ocado and Iceland have a higher share of bag distribution than three of the big seven, while Aldi sits just above the lowest of the seven. Together, these three retailers contributed close to 13% of bags distributed since the charge came into effect but, unfortunately, we don’t know what they contributed before.
Of course, any reduction in SUPBs is welcome. However, we must not allow what is essentially a lost opportunity to achieve even greater environmental and financial savings to be lauded as more successful than the (in fact more effective) policies in place elsewhere in the UK. Rather, than claiming false victories, we should point to the success in reducing SUPB consumption in supermarkets and urge policy makers to extend the benefits of the charge by applying it to SMEs. Only then can we get a better handle on measuring future reductions, and help to make this policy measure something really worth shouting about.