Calls for a sugar tax from the high priests of the nanny state

November 30, 2015 4:39 PM

Increased taxation, censorship, price controls and centralisation.

The proposals included in the report “Childhood obesity—brave and bold action” constitute what may be described as a nanny state full house.

“Reflecting the evidence we heard, we have made recommendations in nine different
areas. No one single area offers a solution in itself, but we see a strong case for
implementing changes in all of these areas. They are:

• Strong controls on price promotions of unhealthy food and drink
• Tougher controls on marketing and advertising of unhealthy food and drink
• A centrally led reformulation programme to reduce sugar in food and drink
• A sugary drinks tax on full sugar soft drinks, in order to help change behaviour, with all proceeds targeted to help those children at greatest risk of obesity
• Labelling of single portions of products with added sugar to show sugar content in teaspoons
• Improved education and information about diet
• Universal school food standards
• Greater powers for local authorities to tackle the environment leading to obesity
• Early intervention to offer help to families of children affected by obesity and further research into the most effective interventions.”

However, the report fails to put forward any substantive argument that these measures would provide any reduction in obesity, let alone whether they are appropriate and proportionate.

Coverage of the report has focused on calls for a sugar tax which it argues should be set at a minimum level of 10-20%.

Would a sugar tax would work?

The report is strangely lacking in evidence that a sugar tax would lead to any meaningful reduction in consumption. Its arguments rely on an earlier Public Health England report which demonstrate simply that their is some price elasticity in sugar consumption - something which had never been in doubt.

The Public Health England report in question did not consider whether a sugar tax would reduce obesity, only whether it would reduce consumption of sugar.It considered a sugar tax to be only the fourth most preferable means of reducing sugar consumption. It presented no evidence for a reduction of overall calorie intake and arguments for a reduction in obesity were assertions without firm evidence. (Chris Snowdon presents an excellent criticism of its methodology here.)

Both the Public Health England report and today’s Health Select Committee take a rather shallow and simplistic view of the impact of sugar taxes. Academic evidence suggests that even where it does reduce consumption of the specific good taxed, this is offset by the substitution effect. Any overall reduction in calorie consumption is negligible if even present.

Such taxes have been tried before and have been abject failures. When Denmark introduced its widely condemned fat tax it proved economically damaging, but had very little impact on the consumption of “unhealthy food”. 80 per cent of Danes made no change to their shopping habits.

A sugar tax would hit the poorest hardest

The poorest 10 per cent already pay an average of 45 per cent of their gross income in tax. Those in the bottom quintile spend 37 per cent of their disposable income on “sin taxes”. Since those on lower incomes spend a higher proportion of their income on food and disproportionately consume foods designates as “unhealthy” there is little doubt that a sugar tax would be highly regressive.

Public Health England’s response to this argument is as follows:

“That is not the point of the tax. The point of the tax is to nudge people away from purchasing those things towards purchasing things that are more in keeping with a healthy balanced diet”

So this tax is not regressive by the reports somewhat idiosyncratic definition so long as the poorest do what they are told and make the “correct” decisions. Indeed it seems to consider the burden falling highest on the poorest to be a positive since they have higher rates of obesity.

Is sugar even the problem?

Sugar consumption per capita in the UK is lower than it was in 1900 and has been falling while obesity has been rising. Sugar consumption is one of a number of factors that may contribute to ill health as part of a poor diet but is certainly not a sole or perhaps even leading cause.

 A sugar tax would increase the burden on family budgets, particularly for those already struggling to make ends meet and there is no evidence that it would lead to a reduction in obesity. The measures suggested in this report are an unpleasant mix of patronising and nannying - the government knows best how to live your life. The evidence base is so weak as to give a bad name to the concept of evidence based policy.

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