Shoppers face £1bn ‘toaster tax’ under plans for new set of net zero rules

Shoppers face a £1 billion “toaster tax” under plans for a new set of net zero rules, retailers and Conservative MPs have warned.

The Department for Environment, Food and Rural Affairs (Defra) has unveiled plans to require larger shops to “take back” used electrical items such as toasters, for recycling, even if the items were bought elsewhere.

The plans would also see online and high street retailers required to provide a “free of charge collection on delivery service” under which they would have to take away a customer’s old appliance, such as a washing machine, television or fridge, if they were delivering a new one.

Helen Dickinson, the chief executive of the British Retail Consortium, told The Telegraph that the new requirements could cost firms “£1 billion or more” per year – a figure that would be passed on to consumers via higher prices.

The Government insists the measures are needed to avoid millions of household electrical items ending up in landfill each year.

Plans are ‘awful’

The plans threaten to reignite Tory rows over burdensome net zero regulations, which the Prime Minister promised to eschew in favour of a “pragmatic and proportionate” approach to decarbonising that would avoid undue pressures on households and businesses.

David Jones, the Conservative MP and former Brexit minister, described the plans as “awful” and akin to a stealth “toaster tax”.

An official analysis accompanying the Government’s consultation document admits that the cost of the scheme, while paid up front by retailers, “could then be passed back to consumers through higher prices” – despite Downing Street insisting that its current focus is easing the “pressures” of the high cost of living.

“It will become an invisible charge that everybody pays,” Ms Dickinson said, adding that, contrary to Rishi Sunak’s pledge to take a “pragmatic and proportionate” approach to net zero, “It doesn’t feel pragmatic.”

The Government’s consultation document setting out the planned changes – which would be rolled out from 2026 – states they are part of a series of measures that will “influence the transition of the whole economy towards net zero.”

Ms Dickinson said: “We think [the bill would be] in the hundreds of millions of pounds plus, and could be £1 billion or more.” The cost would be borne by retailers rather than funded by revenue already raised via business rates and council tax.

Mr Jones added: “This is exactly the sort of burdensome regulation that we thought we were getting rid of when we left the EU.

“This is an extraordinary imposition on businesses and the Government should have nothing to do with it. I think it is completely unreasonable that they should expect retailers to do that.”

Already ‘packed to rafters’ with stock

The most contentious proposal is for “retailers with a turnover of over £100k of electrical sales each year to provide free takeback of unwanted electrical equipment in store without the need to purchase a new item”.

Ms Dickinson said some shops might simply stop selling electrical items in order to avoid being bound by the requirements. If a large chemist sold electrical items such as hair tongs and hairdryers then they would be obliged to accept equivalent items bought at other shops.

Ms Dickinson said: “If retailers have to take in more than they sell, some who only sell small volumes may stop selling them at all and larger supermarkets may also reduce the ranges offered, both reducing choice for customers.”

Richer Sounds, the television and hi-fi retailer, warned that its 50 shops were already “packed to the rafters” with stock. Julie Abraham, the firm’s chief executive, told The Telegraph that the chain did not have “huge empty rooms for storing every broken TV, radio, and speaker that might be left in our stores under the proposed changes to the electrical recycling rules.”

She added: “This means we would have to increase collections from our stores in order to take away these items, increasing our carbon footprint and creating new costs to our business, the environment and ultimately our customers.”

‘We can’t do it for free’

The plans are also opposed by Currys, whose chief executive, Alex Baldock, said the firm’s existing recycling policy meant that it accounted “for nearly half of all retail technology recycling in the UK”.

Speaking earlier this month, Mr Baldock warned that retailers were already only making £3 on every £100, adding: “we can’t do it for free.”

The row comes after The Telegraph revealed last week that ministers had angered Tory MPs by quietly introducing legal changes that amounted to a significant expansion of New Labour’s Equality Act, which Rishi Sunak once claimed had “allowed every kind of woke nonsense to permeate public life” and “must stop”.

The latest revelations centre on a consultation underway over plans to require the “producers and distributors” of electrical items to fund “the full net cost” of recycling or otherwise discarding used electronic products, to avoid them ending up in landfill.

Ms Dickinson said the cost shouldered by retailers would include the “opportunity costs” of lost space that would otherwise be used for storing, displaying and delivering stock.

Currently, retailers with a turnover of more than £100,000 of electrical sales have to take back unwanted electrical equipment when a customer purchases a new equivalent version of the same item. The service is rarely advertised because of the additional costs that shops would face if it became a popular alternative to disposing of old items at local authority recycling sites.

‘Plans will make it easier for people to recycle’

The Government wants to expand the existing rules so that the obligation on shops would no longer “be linked to the purchase of a new item”. Shops would also be legally required to tell customers about their obligation to accept old electrical items.

The consultation document suggested that one option is for the “takeback” service to be restricted to “equivalent” products to the items that each shop sells. That option “would avoid a scenario, for example, where a specialist electrical store only selling lighting products would be required to take-back a toaster,” the consultation document states.

Ms Dickinson criticised the Government for failing to engage more extensively with businesses over the proposals before they were published. The consultation closes on March 7.

She said: “The Government has dithered for years and now announced proposals which are flawed as they chose not to collaborate with the retailers – who are vital to the success of increasing electrical recycling.”

Steve Pendleton, the services director at Currys, said: “At Currys we already operate a scaled and successful solution that meets the aims of our customers, the planet and is sustainable for our business. We strongly urge the Government to focus on harnessing the innovative and competitive nature of the whole retail industry in support of everyone achieving the same position.”

A Defra spokesman said: “Every year millions of household electricals across the UK end up in the bin rather than being correctly recycled or reused. These proposals will make it easier for people to recycle electricals and drive the much needed move to a more circular economy.

“We have been consulting widely on these plans, including with industry leaders and we will fully consider all consultation responses before setting out next steps.” Some 155,000 tonnes of smaller household electrical items, including cables, toasters and kettles are thrown away in conventional bins each year.