As the Guardian reports this morning:
All drinks containers in England, whether plastic, glass or metal, will be covered by a deposit return scheme, the government has announced.
The forthcoming scheme is intended to cut the litter polluting the land and sea by returning a small cash sum to consumers who return their bottles and cans.
This suggestion is obviously welcome but some questions need to be asked.
The first is who gets the non-refunded deposits? Surely not the retailer? This isn't a scheme to increase corporate profits, is it?
Second, is the deposit going to be enough to change behaviour? If not, it will not work. 5p may have changed plastic bag behaviour but returning cans and bottles will require more effort: a higher charge will be needed.
Third, surely it will be compulsory? That is not clear at present.
Fourth, who will direct the use of the funds raised?
I ask because this is very clearly a tax. It is, admittedly an unusual tax because the aim will be that it collect minimum revenues, but that is exactly what tax on ‘bads' should do.
But the point remains that to be effective this must be a charge imposed by government sanction on all retailers without exception with the revenues raised to go to public benefit and with the costs of its operation to be borne by an industry that ultimately sells an anti-social product. The objective must be to quite deliberately to change consumer behaviour.
In that case to make this look like anything but a compulsory, but avoidable, tax would be a big mistake. The government must create and enforce this scheme. It must also make clear tax is being used for a strong social purpose. And it must take the plaudits for doing so. There is a Joy of Tax, after all. One such joy is it can deliver good things. This is one of them.
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This will ultimately push prices up for consumers. I expect the justification will be to pay for setting up the process of collecting, storing and disposing of cans and bottles, and once they go up they will stay at the higher price. If it is to be effective doesn’t it also require a concerted effort by retailers to reduce other damaging wrapping at the same time?
a) Yes it will push up prices. So it should. The current price does not reflect an externality
b) Yes, it should
What are we to do with containers from online purchases, I wonder? I buy almost all my stuff online. Am I supposed to fund posting back every single can of coke, empty, this after paying more for them in the first place? Will we be fined if we try to dispose of such items in our usual way through wheelie bin rubbish collection? Perhaps this will become clearer with time 🙂
This is why it must be a tax so you can take it anywhere to recycle and not the place where it was bought and so the funds must not belong to the retailer who must, however, bear the costs of the scheme and recover them from the consumer
A better scheme would be to convince consumers to give up many of the unhealthy, obesity-inducing products that come in cans, plastic and glass containers. I’ve heard that water is a reasonable substitute for the empty calories found in many sugary drinks and apparently it’s piped into most homes at a reasonable cost, can be made fizzy and is easily recycled via a public network, or in the compost bin. As a side effect it would ease pressure on the NHS. We also need an effective anti-litter campaign. Tax them like fags?
I note the suggested premium is 22p
Is that enough?
Are none of you old enough to remember previous DEPOSIT schemes. This most definitely is NOT a tax. Apart from responsible people taking back bottles they have purchased it will encourage anyone (usually children) to collect discarded plastic bottles and take them to a machine that will pay back the deposit paid by the original purchaser. There is no likelihood that the place of purchase has to be the place of return.
If you frame it as a tax then people will be discouraged from taking the bottles back. Please do not do so.
Yes, I do remember the 3d deposit on what I recall to be Corona bottles
And yes, it is a tax. What the heck else is it?
And of course that will not mean people will not take it back.
They’ll love getting tax back
We have a whole financial services industry largely dedicated to that right now
That’s how I know this will work
When my kids were wee in the 1980s they supplemented their pocket-money with enthusiastic lemonade
bottle-collecting. UK may have given up on such schemes long ago, but when I was working in Switzerland in the early 2000s it was still in widespread use. Mind you, since everything in Switzerland seems to be either compulsory or forbidden, recycling of just about everything was de rigueur, even down to roadkill.
Am I being really dim here? Everyone I know sorts recycleable waste as required by the Council and puts it out for regular collection. Does this fit into this scheme in any way?
Unfortunately a lot of people don’t
Norway has had this scheme going for years. I lived there 1982-85 and 97-98 and the deposit is 1NOK – about 10p. If the UK administer it like the Norwegians it’ll be OK. Unfortunately we probably won’t.
What do you classifiy the payment the customer recieves when they return their bottles as?
A tax refund
Tax issue aside, I remember when I was living in Michigan MANY moons ago (about four or five decades) and a glass bottle return deposit was introduced there. It was a huge success, mainly because even thought the charge was small, it made the empties worth something. Kids and others who wanted pocket money collected them and turned them in.
At the time, the glass bottles were actually washed, sterilised and re-used, not recycled …another good environmental scheme. After that, empty bottles (beer and fizzy drinks) which used to be strewn along roadsides, etc, vanished–and ditto when a similar deposit was introduced for cans as well, although I think the cans were recycled rather than re-used.
This approach does work, even if the people who buy the drinks can’t be bothered returning the containers themselves. Other folks will do it for the money. If 5p isn’t enough to spark interest in returning the containers, perhaps the deposit charge should be higher? 20p per can or bottle? I reckon the collectors will get busy for that kind of return. Theoretically, you get the money back when you return the bottle or can, so it doesn’t raise the cost of the drink itself. It does raise the cost of dumping it, though.
The biggest practical problem will be finding room at the various selling points to store the returns awaiting pickup. These can pile up, especially on small premises, so that’s an issue that needs to be dealt with before this scheme gets going.
Thanks
I am just old enough to remember the routine REUSE of bottles. And I worked I. The early 1980s for a brewery, specifically with responsibility for RETURNABLE containers.
There was largely standardisation of beer bottles across the industry (the exception being Newcastle Brown Ale) so it didn’t much matter who bottles were returned to. A bottle was reused on average 11 Times before it was scrapped – and from memory the return rate was over 90%.
Thinking of this as a system to encourage REUSE not recycling, the deposits need to go through the whole supply chain. If bottles aren’t returned, then the deposit sensibly can be regarded as a contribution to a new container.
That raises an issue where the deposit (22p being suggested) is significantly higher than the cost of production. So how is the deposit scheme going to switch containers UP the waste hierarchy from recycling to Reuse?
I love it
Is there anywhere that I can reference for this evidence?
Slightly tongue in cheek, but:
Its an asset swap!
So you buy a bottle of soda, the government swaps some of your currency, for a new financial asset contained within the bottle, then, at a later date, they agree to exchange this bottle back for sterling. So, an empty bottle is a form of government issued fiat. A zero-interest paying gilt! (that is, assuming the deposit refund doesn’t later increase in line with inflation….?!…at which point, could bottles become a hedge against inflation?)
Rhetorical Questions !
Can bottles be used to settle future tax demands?
How does the government confirm that the bottle returned is legitimate? 22 pence per bottles (in some instances), must surely be more that in costs to manufacturer the bottle?. RFID Maybe? (low cost tags can cost pennies)
Will the total of all deposits on bottles issued, but not yet cashed in, be included in the National Debt figures?
(correct me if I’m wrong, but national debt only includes non-sterling debt?)
Interesting question…
Highly unlikely that this will get anywhere near the national debt figures or the tax figures. ONS who compile the debt and tax figures had a very similar case to consider when the 5p minimum charge was introduced on plastic bags and they deemed that this was not a tax but the sale of a good. Further at an international level these government enforced bottle deposit schemes already exist in many European countries including the Netherlands where they are also not recorded as tax.
Good argument can be made that these are taxes and should be recorded as so but under the current accounting guidance for national economic statistics they will not be seen that way.
🙂