The Institute of Economic Affairs (IEA) has called for the UK government to scrap its proposed deposit return scheme (DRS) due to high costs in a report by IEA head of lifestyle economics Christopher Snowdon .

The report states that the running costs of the governments DRS for drinks cans and bottles make it a very expensive way to achieve very little. The scheme is expected to cost around £1bn to set up and £814m per year thereafter to collect recyclables worth just £37m.

Snowdon says in the report that the DRS needs a more strong economic justification and if it is to proceed, glass bottles should be omitted due to their low recycling value, which could persuade manufacturers to replace disposable plastic with reusable glass. He adds that containers larger than 500ml should be omitted and to make out-of-home recycling easier by providing better street bins over using costly and inefficient deposit services.

Snowdon said: “A bottle deposit scheme is a nice idea in principle, but it doesn’t make economic sense. The government’s own estimates show that it will cost over £800m to collect recyclables worth just £37m. It is a loss-making enterprise, which consumers will ultimately pay for.

“In addition, everybody is going to have to start traipsing off to collection points with bottles and cans, which would otherwise be recovered with a minimum of hassle through kerbside collection.

“To make the scheme appear worthwhile, the government has put an unfeasibly large figure on the value of a modest reduction in littering, while totally ignoring the unpaid labour that will be expected of every household. Increasing recycling rates is a noble aim but it should not be done at any cost.”