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Britain's sugar tax is a sweet idea

Free market think tanks and the food industry may grouse, but similar measures have reaped benefits when they've been tried overseas and they don't 'clobber the poor' 

James Moore
Chief Business Commentator
Friday 06 April 2018 12:15 BST
The sugar tax on the soft drinks industry comes into force today
The sugar tax on the soft drinks industry comes into force today (PA)

Welcome to the first day of the sugar tax, a sweet idea despite the bitter taste its opponents have been trying to leave.

An example of the latter came from the Institute of Economic Affairs. “The sugar levy is a cynical revenue raising device that will clobber people on low incomes,” it growled. “The British public are being treated like children.” If you think you can hear cheering in the background it’s probably from the food and retail industries.

It always rather amuses me when Thatcherite think tanks try and portray themselves as defenders of the poor, but does the IEA have a point? Particularly when it contends that while the consumption of sugary drinks has been falling, obesity has not?

Taxing sugar won’t, on its own, tackle Britain’s obesity epidemic. That requires a multi-pronged approach. But it won’t hurt.

Refined sugar is unhealthy. It contributes to obesity, rots teeth, and plays a role in other malign health conditions.

Where taxes have been introduced on it, and other unhealthy products, there is plenty of evidence based research to suggest that they yield positive outcomes.

Take the experience of Hungary, which in 2011 introduced a public health product tax levied on food containing unhealthy levels of sugar and salt.

Four years later, the World Health Organisation took a look at its impact and concluded that, allied with education, it had “achieved its public health goal in both the short and the long term”.

Consumption of the taxed products decreased, and the decrease was maintained. Those in lower socioeconomic groups switched products.

US researchers who looked at the Mexican experience (you can find the study online at the US National Library of Medicine) also remarked on “the positive effect” there, stating that “households with greater preferences for taxed foods showed a larger decline in taxed food purchases”.

The two countries’ levies led to better choices that benefited rather than “clobbered” the poor.

When you consider that the UK’s Longevity Science Panel found that boys born in one of the richest 20 per cent of neighbourhoods in 2015 could expect to outlive their counterparts in the bottom 20 per cent by a staggering 8.4 years, anything that does that here has to be welcome.

You would hope the UK government will closely monitor the charge, with a view to tweaking, and/or extending it based on results. In the meantime, there should be some extra money for school sports, which is a sensible enough place to direct the revenue.

I understand why people grouse about “sin taxes” and complain about bossy governments. But let’s be clear here, such charges are generally imposed upon activities that carry a social cost.

Most often the tab is picked up by health services. In some cases law enforcement plays a role (I invite you visit a provincial town centre on a Friday night if you want to see an example of what police officers have to deal with when it comes to alcohol). Sometimes the budgets of other services are called upon.

It’s not unreasonable, therefore, to levy a charge to help recoup the costs. If it changes behaviour so much the better. But no one’s saying that people can’t indulge.

When I suggest raising a glass to the sugar tax, you can fill it with all the cola if you want. You’ll just pay a little more for doing so.

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