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Green levies to be imposed in the UK from April next year will increase food prices within months, pushing up shopping bills.

Families are already facing spiralling food and drink prices as grocery bills will on average be £1,000 above 2020 levels by July 2023, according to calculations by the Resolution Foundation.

The levy was devised by Michael Gove during his time as environment secretary and billed as helping the UK to reduce waste and meet its net zero target, alongside a separate scheme to introduce a returnable deposit system for the purchase of drinks bottles and cans. The scheme is formally called the Extended Producer Responsibility (“EPR”).

EPR is a strategy to add all of the estimated environmental costs associated with a product throughout the product life cycle to the market price of that product. The Organisation for Economic Co-operation and Development (“OECD”) published a guidance manual about EPR in 2001 to “inform national governments about the potential benefits and costs associated with EPR.”

OCED is an international organisation of 38 countries established in 1961 which includes, in addition to European countries, the UK, the USA, Canada, Australia, New Zealand, Mexico and a few South American nations.  Its forerunner was the Organisation for European Economic Co-operation and Development (“OEEC”).

In an open letter to The Telegraph, the British Retail Consortium suggests that a scheme to charge retailers and manufacturers for the cost of councils recycling their packaging will increase the cost of household goods when it is rolled out in April next year.

Taken together, the schemes could increase household shopping bills by up to £140 per year, based on the consortium’s estimate of an overall £4 billion cost, The Telegraph reported on Saturday.

The disclosures come after The Telegraph revealed that Downing Street was seeking an agreement with firms to cap the price of basic foods.

Lord Frost, the former minister, said: “It makes no sense at all to try to cap food prices on the one hand and implement a new tax on food on the other. In a cost-of-living crisis, what people absolutely do not need is for food prices to go up because we are putting more unnecessary costs on business with the spurious justification of net zero.”

Craig Mackinlay, who chairs the net zero scrutiny group of Conservative MPs, added: “If we want hard-pressed families to manage the cost-of-living crisis, this grocery tax needs to be abolished.”

In the letter sent to The Telegraph, Helen Dickinson, chief executive of the British Retail Consortium, which represents major supermarkets, says: “Over the next year or so a raft of new regulations and taxes will burden retailers – and ultimately consumers – with higher costs. Just as inflation looks to be turning a corner, these new policies put this at peril. The Government needs to look at these in turn, and consider whether to implement, postpone or scrap each one.”

Featured image: Extended Producer Responsibility, OECD (left), Micheal Gove, DeSmog (right)