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The UK’s biggest retailers will next week warn Rishi Sunak that the government’s waste strategy risks forcing prices up for consumers even as continued inflationary pressures exacerbate the cost-of-living crisis.

Sky News has obtained the draft of a letter from the British Retail Consortium (BRC) – expected to be sent to the prime minister next week – which will outline industry concerns about the costs associated with new packaging and bottle recycling measures.

The letter will urge Mr Sunak to intervene with the Department of the Environment, Food and Rural Affairs (DEFRA) to redesign a Deposit Return Scheme that is close to being introduced in Scotland and would subsequently be extended south of the border.

Industry sources said the letter was likely to be signed by a swathe of retail bosses, with the UK’s supermarkets profoundly concerned about the new initiatives.

The draft letter calls on the PM to adopt “a more pragmatic approach” to the government’s waste strategy.

“The immediate concern is Extended Producer Responsibility (EPR) for packaging due to come into force in 2024,” it said.

“The current policy proposal will add to inflationary pressures and fail to deliver a fit for purpose scheme. It will significantly increase the costs of packaging which, in the current economic climate, will increase prices for consumers, without seeing the desired increase in recycling.”

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It warned that the increased charging would equate to £50 for every UK household, and said a DRS in England would add another £2bn to industry costs.

The DRS will oblige retailers to offer collection points for bottles as well as administering the scheme, with different requirements in England and Northern Ireland to those in Wales.

Retailers believe that the Scottish version will not be ready to launch smoothly in August, as planned, and will say in their letter that they are concerned that different schemes across the UK would not be aligned.

“Whilst retailers and Government are focused on reducing inflation for consumers, and with the backdrop of huge increases from EPR charges, we do not understand why Defra is continuing to pursue the DRS scheme at this time,” the draft said.

“And when it is implemented there must be alignment and interoperability of DRS schemes across the UK, including on things like labelling requirements, as a fragmented approach puts even higher costs onto businesses, and leads to higher prices, reduced choice and confusion for consumers.”

“We would also ask you to raise our concerns on the design of DRS with Defra, where we have struggled to convince ministers of the need for pragmatic implementation that works with the businesses which will deliver it.”

The BRC declined to comment.

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Post Office to set out plans for branch closures and job cuts

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Post Office to set out plans for branch closures and job cuts

The Post Office is drawing up plans to close dozens of branches and axe hundreds of head office jobs as it tries to place its finances on a sustainable long-term footing.

Sky News has learnt that the state-owned company is preparing to announce in the coming days that it will shut or seek alternative franchising arrangements for more than 100 wholly owned branches.

The affected branches collectively employ close to 1,000 people and are said to be significantly loss-making.

A significant number of jobs – believed to be in excess of 1,000 – are also understood to be at risk at the Post Office’s headquarters. Further details of where the axe would fall were unclear on Tuesday afternoon.

Whitehall insiders said that the government had been consulted on the plans, which come as ministers explore the possibility of handing ownership of the network to thousands of sub-postmasters across Britain.

They added that union officials had also been briefed on the proposals, with one suggesting that an announcement could come as early as Wednesday or Thursday.

The cost-cutting measures are said to be designed to help the Post Office stem substantial financial losses, with the company requiring an annual government subsidy to stay afloat.

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Ministers to mutualise Post Office

One government source said the plans should be seen in the context of comments made by Jonathan Reynolds, the business secretary, on Monday at the public inquiry into the Horizon IT scandal.

Giving evidence, Mr Reynolds said: “I think despite the scale of this scandal, the Post Office is still an incredibly important institution in national life.

“I look at the business model of the Post Office, and I think even accounting for the changes in the core services that are provided … there’s still a whole range of services that are really important.

“But I don’t think postmasters make sufficient remuneration from what the public want from the Post Office, and I think that’s going to require some very significant changes to the overall business model of the Post Office.”

Improvements to the pay and working practices of sub-postmasters are expected to be announced imminently, the government source added.

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The 364 year-old institution has been engulfed in crisis since the scale of the Horizon scandal became clear, with hundreds of sub-postmasters wrongly prosecuted for theft and fraud offences.

Brought to a wider public audience by the ITV drama ‘Mr Bates vs The Post Office’, it has been labelled Britain’s biggest miscarriage of justice.

Many of those affected suffered ill health, marital breakdowns or died before they were exonerated.

Former chief executive Paula Vennells, who insisted for years that the Horizon system was robust, was effectively stripped of her damehood in disgrace earlier this year.

Last month, Sky News revealed that the Department for Business and Trade (DBT) has asked BCG, the management consultancy, to examine options for mutualising the Post Office.

BCG’s work is expected to include assessing the viability of turning the Post Office into an employee-owned mutual, a model which is used by the John Lewis Partnership.

The Post Office is Britain’s biggest retail network, with roughly 11,500 branches, with the public’s shareholding managed by UK Government Investments (UKGI).

In recent months, calls for a review of the company’s ownership model have grown amid a corporate governance fiasco at the company.

In January, Henry Staunton, the chairman, was sacked by Kemi Badenoch, the then business secretary.

Mr Staunton subsequently disclosed an investigation into bullying claims against Nick Read, the Post Office’s chief executive, which the organisation said in April had exonerated him.

Mr Read, who has since resigned, was accused of constant attempts to secure pay rises, even as sub-postmasters were facing protracted delays to their entitlement to compensation after being wrongfully convicted.

As part of their efforts to repair the Post Office’s battered finances and reputation, the government has parachuted in Nigel Railton, a former boss of National Lottery operator Camelot, as its chairman.

A Post Office spokesperson said: “We will set out a “new deal” for postmasters and the future of the Post Office as an organisation.

“It will dramatically increase postmasters’ share of revenues, strengthen our branch network and make it work better for local communities, independent postmasters and our partners who own and operate branches.”

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Leap in unemployment rate raises question of Labour own goal

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Leap in unemployment rate raises question of Labour own goal

The UK’s jobless rate has risen by more than expected, raising questions over whether the new government’s early warnings on the state of the economy have backfired.

Official figures from the Office for National Statistics (ONS) showed the unemployment rate at 4.3% over the three months to September.

That was higher than the 4.1% figure expected by economists and up on the 4% reported a month earlier.

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The data also showed that average regular earnings growth had fallen to its lowest level since April-June 2002, easing to 4.8% from 4.9%, though it continued to outstrip the pace of inflation.

Wider figures showed a fall, of 5,000, in the numbers in payrolled employment during the month of September.

Commentators on the economy suggested that the jobless rate figure could be a blip – a consequence of continuing poor engagement with the ONS Labour Force Survey which collects the information.

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They also said that the earnings growth rate – a key concern of the Bank of England’s in the inflation battle – was propped up only by public sector pay rises, suggesting that private sector awards were continuing to ease.

However, others said there could have been an influence from the new government’s claims, since late July, of a dire economic inheritance including a £22bn black hole in the public finances.

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July: Chancellor outlines ‘black hole’

Both Prime Minister Sir Keir Starmer and his chancellor, Rachel Reeves, stated widely during the election campaign their priority was boosting economic growth through a new partnership with business.

But they warned within weeks of taking office of “tough” decisions ahead, while taking some immediate action including cutting the universal winter fuel payment.

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‘Mini fiscal event was unnecessary’

A budget was slated for 30 October.

That first major fiscal event for Labour in 14 years, delivered three months after the gloomy messages first emanated from Downing Street, prompted a business backlash as it put employers firmly on the hook for part of a £40bn additional tax take.

The private sector has since warned that the measures, which include hikes to national insurance contributions by employers, will hit investment, hiring and pay awards, leaving all the talk of partnership with the government in serious doubt.

Danni Hewson, AJ Bell’s head of financial analysis, said of the ONS data: “This latest set of jobs data puts in black and white what businesses and workers have been feeling… Over the last few weeks, businesses have been warning that the increase in national insurance coupled with another chunky hike in the national living wage could result in job cuts.

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“Even before the budget, uncertainty about what taxes might rise eroded confidence and many employers pushed back investment decisions or halted hiring plans until they could assess the road ahead.”

Isaac Stell, investment manager at Wealth Club, said: “A pickup in the unemployment rate may start to ring alarm bells in the halls of Westminster as the rate for September exceeded expectations by some margin.

“This increase serves as a warning sign to the government following on from the budget where businesses saw a large increase in the level of national insurance contributions they will have to pay.

“If these additional costs restrict hiring and cause jobs to be lost, its so-called growth agenda will be further scrutinised,” he wrote.

Work and Pensions Secretary Liz Kendall said of the pay data: “While it’s encouraging to see real pay growth this month, more needs to be done to improve living standards too.

“So, from April next year, over three million of the lowest-paid workers will benefit from our increase to the national living wage.”

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Shell wins appeal in landmark emissions case

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Shell wins appeal in landmark emissions case

Shell has won its appeal against a climate court ruling that it must sharply reduce its carbon emissions.

The oil and gas producer went to the Court of Appeal in the Netherlands following a decision in support of environmental campaign groups in the country, including Friends Of The Earth.

That ruling, in 2021, ordered Shell to cut its carbon emissions by 45% by 2030 compared to 2019 levels in order to protect Dutch citizens.

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The emissions curbs included those caused by the use of Shell’s products.

The judge in the appeal dismissed all the claims against Shell.

The company, which exited its dual headquarters structure in The Hague in 2022 to reside only in the UK, had argued that the original district court decision was flawed on many grounds.

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They included that only nation states can set such sweeping demands and that such a cut to its business would only shift output towards its competitors without any benefit to the planet.

The ruling was handed down as the COP29 climate summit is staged in Azerbaijan and just months after Shell weakened a 2030 carbon reduction target and scrapped a 2035 objective, citing expectations for strong gas demand and uncertainty in the energy transition.

Tuesday’s judgment may not be the end of the matter.

The climate groups, which saw the case as a human rights issue, have the option to bring their own appeal to the Netherlands’ Supreme Court.

The only boost to their legal fight came from the court agreeing with the activists that Shell had an obligation to cut its greenhouse gas emissions to protect people from global warming.

The appeal court, in its findings, added however that the company was on its way to meet required targets for its own emissions though it was unclear if demands on it to reduce emissions caused by the use of its products would help the fight against climate change.

Shell chief executive, Wael Sawan, responded: “We are pleased with the court’s decision, which we believe is the right one for the global energy transition, the Netherlands and our company.

“Our target to become a net-zero emissions energy business by 2050 remains at the heart of Shell’s strategy and is transforming our business. This includes continuing our work to halve emissions from our operations by 2030.

“We are making good progress in our strategy to deliver more value with less emissions.”

Friends of the Earth director in the Netherlands Donald Pols said of the ruling “This hurts.

“At the same time, we see that this case has ensured that major polluters are not immune and has further stimulated the debate about their responsibility in combating dangerous climate change.

“That is why we continue to tackle major polluters, such as Shell.”

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