Sugar tax will double funding for sport in primary schools, says chancellor

BMJ 2016; 352 doi: (Published 17 March 2016) Cite this as: BMJ 2016;352:i1602
  1. Nigel Hawkes
  1. London

The government will introduce a tax on soft drinks containing sugar, the chancellor of the exchequer has announced.

George Osborne said that he expects the new tax, included in the 2016 budget proposals, to raise £520m (€658m; $744m) a year when it comes into force in 2018. The revenue will be used in part to double the amount primary schools spend on sport, to £320m a year. Public health bodies welcomed the announcement warmly, while the food and drinks industry denounced it as “political theatre” that would cost jobs and slow down innovation.

Under the proposals, producers and importers of soft drinks will pay a levy based on the total sugar content of drinks. One rate will apply to drinks with more than 5 g of sugar per 100 mL, which is expected to add about 6p to the price of a 330 mL can or bottle, and a higher rate will apply to drinks with more than 8 g per 100 mL, which is expected to add 8p a can. Small operators will be excluded from the tax.

Details of how the tax will be levied will be discussed over the summer, with legislation proposed for the 2017 Finance Bill and implementation planned in 2018.

The announcement came as a surprise because, although the government has been under pressure to tax sugar, it has previously shown little sign of acceding. But Osborne pulled no punches in his budget speech, saying, “Children are consuming their body weight in sugar every year. Experts predict that, within a generation, over half of all boys and 70% of girls could be overweight or obese.”

One of the biggest contributors to childhood obesity, said Osborne, was sugary drinks. “A can of cola typically has nine teaspoons of sugar in it,” he said. “Some popular drinks have as many as 13. That can be more than double a child’s recommended added sugar intake.”

He was not prepared, he said, to look back at his time in parliament and say to his children’s generation, “I’m sorry. We knew there was a problem with sugary drinks. We knew it caused disease. But we ducked the difficult decisions and we did nothing.”

The tax will be delayed for two years to give drinks companies time to change their products, he said, and pure fruit juices and milk based drinks would be excluded. The companies can choose to promote low sugar or no sugar brands and avoid the levy, or they can pay the levy and pass on the cost to the consumer, which “will be their decision and . . . will have an impact on consumption, too.”

Duncan Selbie, chief executive of Public Health England, said that the levy was “fabulous news” for children and families in helping them to cut back on sugar. “This will reduce the risks of obesity, tooth decay and other life threatening diseases,” he said. “This is public health in action and a great foundation ahead of the child obesity strategy later this summer.”

Neena Modi, president of the Royal College of Paediatrics and Child Health, said she was delighted that the government had heeded the grave dangers of childhood obesity. She said, “Our poll of the British people last year showed there was majority support for such a measure. I applaud this step as a powerful message that will underline to the world that the UK intends to show global leadership in tackling childhood obesity.”

Those affected by the levy were less enthusiastic.

Ian Wright, director general of the Food and Drink Federation, said that he was extremely disappointed, adding, “For nearly a year we have waited for a holistic strategy to tackle obesity. What we’ve got today instead is a piece of political theatre. The imposition of this tax will, sadly, result in less innovation and product reformulation, and for some manufacturers is certain to cost jobs.

“Nor will it make a difference to obesity. Many of those singled out today by the chancellor have been at the forefront of efforts to provide consumers with healthy choices. The industry will now ask whether such efforts are still affordable.”

Gavin Partington, director of the British Soft Drinks Association, said, “We are extremely disappointed by the government’s decision to hit the only category in the food and drink sector which has consistently reduced sugar intake in recent years—down 13.6% since 2012.

“We are the only category with an ambitious plan for the years ahead: in 2015 we agreed a calorie reduction goal of 20% by 2020. By contrast, sugar and calorie intake from all other major take home food categories is increasing—which makes the targeting of soft drinks simply absurd.”

Nutritionists expressed some scepticism about how effective the levy would be. Tom Sanders, professor emeritus of nutrition and dietetics at King’s College, London, said, “The use of the sugar tax to support sport in schools is welcome. Whether it will have any impact on sugar intake is uncertain.”

And Susan Jebb, professor of diet and population health at the University of Oxford, said that further analysis was needed to understand how the tax might work. Changing products was costly, she said, and businesses may decide to just take the tax or may raise the costs of products to offset it.

“Increasing prices of soft drinks across the board would be expected to lead to a small decrease in consumption, but ideally this levy needs to result in a clear price difference in the shops between drinks containing added sugar and those without,” said Jebb.

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