It costs more to recycle them

I lambaste government often enough for doing stupid things so I should also praise when there’s something sensible on the cards. As with this, the government has rejected the idea that there should be a 25p charge on single use coffee cups. Yes, rejected, even though a Commons committee said it should be done. The reason to praise this excellent idea, no tax, is because it was a stupid idea which wouldn’t work.

No, really, this has been tested. The work has been done into whether such a levy would work – work as in solve a problem rather than work as in parade Teh Feelz of those proposing it. And it won’t, therefore it’s good not to be doing it:

The government has rejected calls for a “latte levy” to be introduced on takeaway cups to reduce the amount of waste they create.

Good. But why good?

Publishing the government’s response to her committee’s call for a 25p levy on takeaway cups, Creagh, a Labour MP, said: “The UK’s throwaway culture is having a devastating impact on our streets, beaches and seas. Our report recommended practical solutions to the disposable packaging crisis. The government’s response shows that despite warm words they plan no real action.”

Consultation by the Department for Environment, Food and Rural Affairs (Defra) on a plastic deposit scheme was carried out last autumn but has not yet been published. A consultation announced in November by the chancellor, Philip Hammond, into taxes and charges on takeaway packaging and plastic bottles has yet to be launched.

The committee’s key recommendation of a 25p levy on cups to help fund recycling measures was judged the most effective way to change consumer behaviour.

Ah, but, you see, we already know that doesn’t work. We went and tested it:

A new report from Cardiff University tells us that we’d have to be blithering idiots to insist that people stop using disposable coffee cups. (Not that the authors of the report seem to have realised.) Yet, of course, we still have a government campaign and even, whisper it, the possibility of a Task Force to make it happen.

Idiocy may not be a word contained within the report, but the research found that a charge of 25p per cup only gets a few per cent of people to take a reusable one. The vast majority of people shrug and take the standard ones which, after that 20 minutes of use, pile up in a landfill site.

Think this through for a moment. The idea of the committee is that 25p means that fewer people will use the disposable cups. This isn’t so, therefore the committee is wrong. Not only wrong but provably so. But it gets worse too. We don’t even want to recycle the cups in the first place. Because to do so makes us poorer:

The charge doesn’t change behaviour. So, that’s one justification of such a Pigou Tax out the window. The other possible justification is that the revenues raised should be spent upon dealing with the problem. Yet we can also calculate what is the cost of the problem. That’s some £3 million a year. For that is what the cost, as measured by the Landfill Tax, is to stick the nation’s discarded coffee cups into holes in the ground.

A decent enough stab at the revenue raised from this tax is some £625 million (2.5 billion cups, 25 pence per cup). That is, there would be a charge of £625 million to solve a £3 million problem. This makes us poorer.

This is not a good idea.

The basic idea from the committee, that there should be a 25p tax on disposable coffee cups, is a bad one. It makes us poorer to no good effect. Therefore the government’s quite right in rejecting it. Assuming they do continue to reject it of course…..

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3 COMMENTS

  1. AMT Coffee secures Fair Tax Mark and becomes first coffee retailer to offer a Fair Tax choice across coffee bars nationwide

    AMT Coffee, which has 53 bars across the UK and the Republic of Ireland, has secured the Fair Tax Mark, becoming the first coffee company with a nationwide presence to provide consumers with a Fair Tax choice across its coffee bars.

    AMT Coffee’s fair tax certification is significant given the findings of recent research from Populus*, which found that the UK public not only still mistrust companies such as Starbucks on tax matters (and that this is still negatively impacting their reputation), but that this mistrust has now also extended to other Food & Drink brands.

    AMT Coffee has a presence in railway stations, airports and NHS hospitals. They join a growing list of retailers that have achieved the Fair Tax Mark, putting them alongside The Co-op, Lush Cosmetics, Richer Sounds and many others.

    Alistair McCallum-Toppin, an original founder of the company and Managing Director of AMT Coffee, said: “AMT Coffee was the first national coffee company to support Fairtrade, and I’m delighted that we are now the first coffee retailer to offer customers a Fair Tax choice across our quality coffee bars nationwide. Consumers are becoming much more discerning, especially when it comes to the ethics of a company. They want their brands to reflect their own ethical stances. The strength of feeling on companies paying their fair share of tax has really gained momentum over the last few years and the Fair Tax Mark allows us to respond to this overwhelming demand for clarity with our customers.”

    Paul Monaghan, Chief Executive of the Fair Tax Mark said: “Consumers are rightly angry when they hear of multinational coffee shops paying little or no corporation tax in the UK – sometimes year after year after year. Many consumers have boycotted the likes of Starbucks, but up until now they have not had the option of supporting a brand with locations nationwide that has independent assurance that it pays the right amount of tax in the right place, at the right time.

    “AMT Coffee do not make use of tax havens or abusive tax avoidance schemes, and would appear to be a natural fit for public sector procurers who want to ensure that taxpayers monies actively support tax justice. With more retail opportunities being made available in the likes of NHS hospitals and town halls, it seems only right and proper that the companies operating in the public sector should pay their fair share of tax and help contribute to these vital services on which we all rely.”

    As part of their Fair Tax Mark certification, AMT Coffee have provided additional clarifications on their economic activity and taxes in the UK and the Republic of Ireland. Their accounts provide detailed current tax and total tax reconciliations, as well as a narrative deferred tax explanation.

    Consumers looking to support businesses committed to paying their fair share of tax can find the more than 1,500 shops and offices of Fair Tax Mark accredited organisations at http://www.fairtaxmark.net/map.

    http://www.taxresearch.org.uk

  2. @Tim,

    Did you miss this?

    Link: Philip Hammond draws up plans to tax single-use plastics including coffee cups to avoid waste being dumped on beaches

    Eh? How would a tax on the item stop people throwing it away after they’ve purchased, used it and no longer want it?

    Sheer idiocy, green virtue signalling and a blatant tax grab.

    Hammond needs to be sacked, everything he does contradicts May’s claim to help “the just about managing”.