Lancashire packaging company goes into administration, blames plastic bag charge

A British packaging company in Lancashire has gone into administration following the introduction of a 5p charge for plastic bags in England.

Forty workers have been made redundant at Nelson Packaging.

Recent legislation passed in October made is mandatory for retailers to charge 5p for bags in England after similar laws were introduced in Wales, Scotland, and Northern Ireland. The charge in England only applies to shops or chains with 250 or more full-time employees.

The scheme aims to reduce the use of single-use plastic carrier bags, and the litter associated with them, by encouraging people to re-use bags.

Nelson Packaging, which began operating in 1975, was acquired by Cheshire-based packaging firm Intelipac three years ago.

Michael Flynn, managing director of Intelipac, was quoted by the BBC as saying that the business suffered because of “the English bag legislation and corresponding impact on customer and retailer demand for plastic carrier bags”.

“Added to aggressive overseas competition this ultimately proved too devastating for the ongoing viability of the business, despite the continued efforts of the loyal workforce.”

One worker told BBC Radio Lancashire that the legislation had a “slight but not a massive impact” on the firm.

Staff at the factory were told last Wednesday that they were being made redundant and were told to leave immediately.

Union representative Robert Copeland told the BBC:

“It’s daunting as I have no interview skills. I’m 49 years old and I’ve got to now go into a new working environment and start again. It is scary.

“I was 19 when I started and… you were seeing the children of people you have been working with for 30 years starting to come through so you had parents and children [at the factory].”

Wales, the first country in the UK to introduce a plastic bag charge, has seen a 71% drop in the number of single-use carrier bags handed out by shops since charges were introduced in 2011.

Similarly, Scotland reported an 80% drop since the charges were introduced in October last year.

The redundancies are an unfortunate effect of the new plastic bag charge in England. However, the scheme promises to provide a number of benefits.

What are the benefits of the plastic bag charge?

The Department for Environment Food & Rural Affairs estimates that over the next 10 years the benefits of the scheme will include:

  • an expected overall benefit of over £780 million to the UK economy
  • up to £730 million raised for good causes
  • £60 million savings in litter clean-up costs
  • carbon savings of £13 million