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…..