Stephen Jardine: Sugar tax a surprise ingredient of Budget

'Moaning' drinks companies were drowned out by 'jubilant campaigners.' Picture: John Devlin
'Moaning' drinks companies were drowned out by 'jubilant campaigners.' Picture: John Devlin
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When delegates gathered for the annual Scotland Food and Drink Conference in Edinburgh on Thursday, something unexpected was on the breakfast menu.

Amongst the fruit and pastries was a surprise announcement from Chancellor George Osborne in his Budget.

In recent months the campaign for a sugar tax has been gathering momentum way but no one expected the government to move so quickly.

The Chancellor explained it away as a personal decision. “I’m not prepared to look back at my time in this Parliament and say to my children’s generation, I’m sorry, we knew there was a problem with sugary drinks but we ducked the difficult decisions and we did nothing,” he said.

His solution is to impose a levy on soft drinks with more than 5g of sugar per 100ml with a higher rate for those with more than 8g per 100ml. In its first year the tax is expected to raise about £520m.

Opposition from the sugar industry was always going to be the biggest obstacle but in a smart piece of political maneouvring, the Chancellor announced money raised by the tax will be used to fund sport in primary schools.

The soft drinks manufacturers moaned and groaned but they were drowned out by jubilant campaigners. “This is a tax for good, this is a tax that will send ripples around the world,” said Jamie OIiver who has led his own sugar tax campaign. “It’s rare that a measure I’ve written about and campaigned for gets govt backing. Now, watch the sugar corps fight,” tweeted Scottish sugar tax campaigner Alex Renton.

Fight they might but the surprise decision and overwhelming public support so far suggests the battle has been lost by the big sugar corporations. So the big question now is, will the tax work ?.

It has been tried overseas with varying results. In Mexico it changed consumer behaviour but in France, after an initial drop in consumption, shoppers became used to the tax and reverted to previous consumption.

The Office for Budgetary Responsibility suggests the UK levy will add 18p or 24p per litre, or about 6p or 8p to a standard 330ml can. The concern is that manufacturers will vary can and bottle sizes to absorb. The licensed trade, already hard hit by changes to drink drive limit, also fear they will suffer most from any price increases as the big soft drink brands try to shield consumers from the rise.

Critics of the tax say it is regressive and will impact on the poorest in society most. That is true, but sugar is also regressive with the worst effects of the obesity crisis in low income groups.

The sugar tax does not offer a magic answer to that but along with mass public health campaigns, it could be part of the solution. One thing is certain, doing something is better than doing nothing.

In Scotland, problems resulting from tooth decay are the number one reason children are admitted to hospital. In 2016 that is not acceptable. If we believe government has a responsibility to intervene to look after the health of the population, then the sugar tax can only ever be a good thing.