THE BLOG

The Sugar Tax Is in the Political Graveyard, Isn't It?

19/07/2016 17:27 | Updated 19 July 2016
VICTOR DE SCHWANBERG

The sugar tax is surely in the political graveyard now, given what has happened with the 'Brexit' vote. Does anyone seriously think it's going to happen given all the uncertainty that lies ahead for business and consumers?

When it was announced in March, the health campaigners (one of them in particular) were jumping around in celebration of this regressive tax, because the prospect of a 'Brexit' vote seemed so remote and unlikely. The 'Remain' camp were in the lead, and it was more than three months away from polling day.

Well, the 'Brexit' vote has happened, and the political environment we face is very different to the one we faced on in March. Sorry if the health campaigners aren't aware of this, but the 'Brexit' decision is one of the biggest political events in recent decades.

Consumers and businesses face months of uncertainty. As I write this article, the IMF is reportedly set to downgrade growth forecasts, and inflation rates are on the rise. Consumer spending has dropped since the referendum too.

The sugar tax, also known as the soft drinks levy, would have caused extra financial strain for hard-working families.

And then there is the concerns of business. Just last week, the Food and Drink Federation called for the sugar tax to be scrapped because of the uncertainty. This tax has the potential to cause financial strain on many businesses, large and small, and could even result in job losses.

Do the health campaigners care? Not one bit. Just in the last couple of days, they have been jumping up and down (in anger this time) saying that the forthcoming childhood obesity strategy is going to be watered down. They are upset because their demands and diktats are not being listened to by politicians. They're almost at the point of throwing their toys out of their pram.

The health campaigners have become so hostile to business that it is increasingly more about business bashing than about improving public health.

Health campaigners need to accept that the obesity strategy needs to take into account everyone's views, not just their own. It also has to take into account views of other government departments too (some of whom are reportedly in disagreement with the Department for Health).

The sugar tax is looking increasingly vulnerable. We have a new Chancellor, we have a new Prime Minister, the whole make-up of the government has changed.

The new government has to be able to have the freedom to look at some of the decisions made by the previous government, like the sugar tax, and has to have the freedom to say 'actually, we don't think we will go ahead with this'. And bravo to them if they have the guts to do this.

Phillip Hammond, the new Chancellor naturally will be keen to make his mark, and to show himself as a different type of Chancellor. Part of this will be to establish his authority with Treasury officials. Scrapping the sugar tax would be a perfect way of doing just that.

Comments

CONVERSATIONS