NFRN Face the Facts Can the Tax October 2016
Thank you for contacting me recently regarding the Government's proposal to introduce a Soft Drinks Industry Levy and the related 'Face the Facts, Can the Tax' campaign.
As you will be aware, in the March 2016 Budget, the then Chancellor announced plans to introduce a levy on the soft drinks industry in the UK, to come into effect in April 2018.
Public health experts have widely identified sugar-sweetened soft drinks as a specific, major factor in childhood obesity and the Government regards the Soft Drinks Industry Levy to be a key part of its childhood obesity strategy, which was published on 18 August 2016. The Government has committed to use revenue from the Soft Drinks Industry Levy to double the PE and sport premium for primary schools in England, expand school breakfast clubs and support more secondary schools to offer a longer school day, including more sport.
I understand that organisations such as the National Federation of Retail Newsagents and other industry groups have raised concerns about the potential impact of the levy on jobs and the economy. I appreciate these concerns.
I also note that many organisations have consistently called for a soft drinks levy to help tackle obesity, particularly amongst children. It is also the case that in a recent survey of more than 2,000 UK adults, carried out by the market research firm Future Thinking, nearly half agreed with the 'sugar tax'. It is worth noting that the estimated cost to the UK economy from obesity is approximately £27 billion per year, while the NHS spends over £5 billion per year on obesity-related costs. Obesity is ruining the quality of life for growing numbers of people, starting with children, and I welcome action to help tackle obesity.
However, I have long believed that a sugar tax will work best as part of a broader strategy to address obesity. I am concerned that the Government's long-delayed Childhood Obesity Strategy does not go far enough to reverse rising obesity trends in the UK. I am also concerned that Government spending on public health will be subject to huge cuts in the coming years which could put our ability to tackle obesity at risk.
The Government has made the case that companies will have two years before the Soft Drinks Industry Levy comes into force, to adapt, and argues that the levy is designed to encourage companies to reformulate their products so there is less added sugar in soft drinks, noting that producers that change their behaviour will pay less tax. As I am sure you are aware, the Government recently consulted on the technical details of the levy and called for views on the impact of these proposals to help determine the final shape of the levy. The consultation closed on 13 October. I hope the Government will carefully consider all views that were raised in this consultation and I will follow the outcome closely.
Thank you once again for contacting me and for sharing your views, which I will continue to bear in mind.