A ‘sugar tax’ on soft drinks brought a less-than-enthusiastic reaction from my dining companions this evening.

George Osborne’s announcement today that he plans to impose a ‘sugar tax’ on soft drinks brought a less-than-enthusiastic reaction from my dining companions this evening. We were a disparate group, united by a passion for riding horses, and – myself excepted – with no professional connection to the food industry, although we certainly all love food. Various comments ensued along the lines of “will the sugar we treat our horses to also be taxed?” to which the answer at the present time is “no” since only sugary soft drinks are to be targeted, although as an aside it is interesting to note that humans are not the only animals to become easily addicted to sweet treat food. “Will the tax work?” was perhaps the most pressing question.


According to Mr Osborne the tax will generate around £530 million in revenue, which equates to 18-24p tax per litre of drink sold. This is less than the fuel duty payable on petrol at the present time of just under 58p per litre, considerably less than the 273p per litre levied on wine of average alcoholic content. However, the present tax on beer of average alcoholic content is just over 18p per litre i.e. less than the proposed tax on sugary drinks. Figures released last year indicated that alcohol-related problems now costs the NHS £3.5bn per year, whereas type II diabetes, which is induced by excessive consumption of sugar and associated obesity, is estimated to cost the NHS £10bn per year. In this sense the numbers add up, but the government is not proposing to direct the sugar tax revenue into the NHS, but to invest it in primary school sports to encourage children to lead an active and healthy lifestyle. Nice idea, but will a simple cash injection really change behaviours and choices? History suggests that simply presenting people with information and an option to make the ‘right’ choice doesn’t work. Jamie Oliver’s campaign for healthier school meals only really worked when unhealthy options were removed from the menu so that the children had no option but to be exposed to new types of foods. Choice editing in this way – making the healthy choice the only choice – works, but humans are notoriously bad at making the ‘right’ dietary choice given freedom of selection. We all are aware that we should be eating at least five portions of vegetables and fruit per day, but on average we consume 2-3 portions. Sugar and fat taste good, and it takes a very strong will to turn away from something we find hugely attractive to our palettes in favour of a healthy alternative.


Facilitating sport in schools isn’t going to turn the next generation into health gurus or Olympic athletes, or stop them drinking sugary drinks.  As with all lifestyle choices, children will be influenced by their parents and celebrities they admire, so imagination and creativity will be needed to make any cash injection work. Interestingly, sports drinks typically contain 30-40g sugar (7-10 teaspoons) per 500ml bottle, which is fine if you have actually been doing hard physical exercise, but less good for you if they are consumed in isolation from exercise. By comparison, a 500ml bottle of cola drink contains 55g (13 teaspoons) of sugar. If doubts exist over the efficacy of using the revenue to encourage activity in our younger generations then will it work by any other means?


The straightforward argument is that if the cost of purchasing sugary drinks becomes more expensive then consumers will look for alternative options that are more healthy. Again, history suggests that this argument is a fallacy. Denmark imposed a ‘fat tax’ on its population in October 2011, with similar aims of inducing healthier dietary choices by consumers. The tax was abandoned some 15 months later, having cost at least 10% of the revenue in administrative costs and generated extremely negative public opinion. Rather like the rising cost of fuel in the UK, the additional taxes tend to cause anger rather than action, we still kept driving our cars and the Danes continued to eat high-calorie food to the extent that the fat tax actually raised more revenue than expected since an estimated 80% of people didn’t change their consumption habits at all but either took the hit on their wallet or sourced these foods from neighbouring countries which did not have the tax.


In my view the most likely outcome of the sugar tax is that companies manufacturing sugary soft drinks will spend the next two years before the tax is imposed reformulating their products so that they contain less sugar. The Scientific Advisory Committee on Nutrition (SACN) recommends that no more than 5% of daily calories should come from added sugar – equivalent to about seven teaspoons - which is a fraction of the present average person’s consumption of added sugar. The sugar reduction target recommended by Action on Sugar is a whopping 40% by 2020. This is only achievable through reformulation and there is evidence from the salt campaign that this a strategy that works, since people in the UK have reduced their salt intake by over 15% over the last ten years, largely by reformulation of products. Drinks companies have seen the writing on the wall for some time and are already marketing reduced sugar alternatives using natural flavourings such as Stevia to maintain sweet taste. This approach may well improve the health of the nation, but it is going to play havoc with George Osborne’s figures, since the reformulated products will generate far less in tax revenue and he will not therefore be able to make his intended funding contribution towards encouraging sport in primary schools.


So what is the answer? For those of us round the table this evening it was to conclude that eating a bit of everything in the form of a balanced diet was the safest bet, that we had made an ample contribution to the treasury coffers through the alcohol duties, and that we will get our exercise tomorrow when we are riding our horses.


Carol Wagstaff

17th March 2016.

Our partners

Our funder