Philip Hammond has announced a new tax on the manufacture and import of packaging with less than 30 per cent recycled plastic but refused to introduce a widely expected levy on takeaway plastic cups.

He reiterated previous comments that the UK must become a world leader in tackling “the scourge of plastic littering our planet and our oceans”.

To help achieve its aims, the UK Government will “introduce a new tax on the manufacture and import of plastic packaging which contains less than 30% recycled plastic … transforming the economics of sustainable packaging”.

Mr Hammond added: “Billions of disposable plastic drink cups, cartons, bags and other items are used every year in Britain: convenient for consumers, but deadly for our wildlife and our oceans. Where we cannot achieve reuse, we are determined to increase recycling.”


Mr Hammond claimed his new policy would “transform the economics of sustainable packaging”, and said the Government would consult on the details and timetable of implementation.

He said the move, alongside wider planned reforms of the Packaging Producer Responsibility System (PPRS), would “transform the economics of sustainable packaging”.

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The new tax is expected to come into effect from April 1, 2022, subject to consultation, and will cover UK and imported plastics.

But his commitment did not extend to a so-called “latte levy”, which has been suggested as a means of dealing with the waste of disposable cups – 2.5 billion of which are thrown away every year in the UK.

The latte levy, first floated by the Environmental Audit Committee, would add 25p to the price of each purchase to encourage reusable alternatives and provide a fund for better waste management.

But Mr Hammond said: “I have concluded that a tax in isolation would not, at this point, deliver a decisive shift from disposable to reusable cups.”

The Government introduced a 5p charge for plastic bags in 2015, in a move that has cut plastic bag sales by 86% and cut the number entering the environment. Many have since called for the move to be repeated with coffee cups and plastic bottles.

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The 106-page Budget document pledges to reform the PPRS, but rules out any the widely called for levy on disposable cups. Ministers do not believe it is “effective in encouraging widespread reuse”, following a consultation on the issue.

Last year’s Autumn Budget outlined the Government’s intention to consult on a plastics tax, before the 25-Year Environment Plan pledged to eliminate all “avoidable” plastic waste by 2042.

Yesterday’s Budget also pledged £20 million of new funding to boost plastic recycling, £10m for plastics R&D, and £10m to fund innovative approaches to recycling, such as smart bins.

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The planned tax was welcomed by Jacob Hayler, executive director of the Environmental Services Association (ESA), who said the recycling industry “has long been calling for measures to support end markets for recycling”.

He said: “The Chancellor has listened, and We welcome proposals to introduce a new tax on plastic packaging that contains less

than 30% recycled content. Without stimulating the demand for recycled material, higher recycling rates will be unachievable”.

However, environmental groups complained of a lack of ambition in the targets, with Greenpeace UK executive director John Sauven saying: “Three weeks since the world’s leading climate scientists said governments have just 12 years to turn the tide on the catastrophic and irreversible consequences of climate change, the Chancellor has delivered a Budget that reads as though he missed the memo.

“We’re currently in the middle of a plastics pollution crisis and yet the Chancellor failed to take even small steps towards stemming the flow of single use plastics by choosing not to introduce a tax on disposable coffee cups and ignoring calls for a tax on brand new plastic.”