BOSSES at a plastic bag maker have blamed the five pence carrier bag charge for forcing it out of business with the loss of 40 jobs.

Staff were ordered to stop production at Nelson Packaging’s Waidshouse Mill premises and told they were being made redundant with immediate effect.

The Townsley Street company, which specialised in making products from recycled materials and water-based inks, counted Tesco, Asda and Marks and Spencer among its clients.

Just last year former Shadow Chancellor Ed Balls toured the 35-year-old firm, where the prospective bag tax issued was raised.

A senior county councillor has spoken of his shock at the job losses which came despite offers of assistance from the county and borough council in Pendle.

Administrators being appointed ends a devastating 12-month period for the company, after encouraging results were posted by the board for the year ending May 2015.

Though turnover had dropped from £9.5million in 2014 to £7.8million in 2015, the profits before tax were recorded as £252,000, up from £90,000 the year before, with an investment in machinery cited as the prime growth factor.

But the five-pence plastic bag charge, introduced by the government last October to reduce the distribution of single-use carriers, plunged the venture into jeopardy.

Managing director Michael Flynn said in a statement: “Unfortunately Nelson Packaging had to enter into administration last week.

“This was an outcome primarily of the English bag legislation and the 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.”

Speaking after the announcement, County Cllr Azhar Ali, said: “This is shocking news, last year they were talking about how they were going to expand so this has come like a bolt out of the blue.

“I know that Pendle Council have been in touch with them, asking if there was anything that they could do to help, and Lancashire County Council could also have offered assistance.”

County Cllr Ali is now seeking reassurances over the future of the Waidshouse Mill site, as it is in the middle of a crowded residential area.

Cllr Eileen Ansar, who represents the Clover Hill ward covering Nelson Packaging, said: “This will be a sickening blow for the area.

“I hope that we can get someone else in there before too long.

“This was the kind of place where whole families will have worked down the years.

“We visited there with Ed Balls last year and they were talking about expanding then. But they did mention about the bag tax and they thought even then that it would have a detrimental effect on their business.”

Back in September 2013 Nelson Packaging, then in the hands of managing director Richard Jones, was taken over by Golborne-based Intelipac, which is continuing trading.

Union representatives were said to be in the middle of discussions with management over changing working practices when the announcement was made to the workforce.

One worker who had been there for 30 years, Robert Copeland, said: “We had been in negotiations with the company and knew things were struggling and as a union we were trying to introduce different shift patterns, so we could produce cheaper plastic bags.”

Staff are now facing the prospect of having to apply to the Redundancy Payments Office for outstanding salaries.