A tax on fat, sugar and salt

The next Labour government will face very tough decisions on tax and spending because of the Cameron/Osborne austerity disaster.

Raising the overall tax burden at all will be politically difficult and is likely to be economically unwise. Yet the cost of providing health and social care will continue to grow. There will be pressure to introduce charges – perhaps means tested – for more, not fewer, health services. But there is an alternative. We could have a fundamental re-think of our taxation system, which for far too long has been driven by Treasury short-termism. We could look at how to move away from taxing virtuous things like work and wealth creation to bad things like unhealthy or environmentally damaging behaviour as well as unearned, unproductive wealth.

As part of this, Labour should commission an independent review on fat, sugar and salt taxes. Britain is suffering an obesity epidemic. The latest estimates say obesity will soon cost more in ill health, premature death and costs to the NHS than smoking. At least a quarter of British adults are obese. The role that saturated fat, sugar and salt consumption play in a range of ‘lifestyle’ diseases including diabetes, stroke, heart disease and cancer is not contested. The UN Secretary General has said ‘lifestyle’ diseases associated with obesity are now a bigger threat to the world than infectious diseases. Globally, 30 per cent more people are obese than undernourished.

A number of other European countries have already introduced taxes or duties on products containing high levels of refined sugars and saturated fats, or are thinking of doing so. Denmark has excise duty on confectionery and soft drinks and Holland has one on carbonated soft drinks. Laws in France restrict advertising of foods high in fat, sugar and salt unless they are taxed and carry a health warning. France saw a fall in obese children following the introduction of these measures. Hungary has a tax on fat. We’ve had duties on tobacco and alcohol in Britain for generations. They have helped contain and, in the case of tobacco, drive down consumption while raising huge sums for the Treasury.

The argument that is often made on the left against such a move is that it would be regressive. The less well-off spend a bigger proportion of their income on food and on food high in fat, sugar and salt in particular, and so would be hardest hit. But you could make the same argument about tobacco and alcohol duty. As long as a Labour government was busy implementing redistributive policies more generally there is no reason why poorer families should lose out. The least well-off would also benefit the most in health terms from reductions in consumption of fat, sugar and salt, as they suffer a higher incidence of most diet related diseases.

The ‘nudging’ policies of the current government have not worked. They amount to little more than tinkering around the edges. Using a proportion of the funds raised to invest in health education and fitness programmes would show that this was about health improvement and not just a fund-raising exercise. We would face a charge of ‘nannyism’ from some quarters, as we did over the public smoking ban, now widely judged one of Labour’s most successful policies. We could also measure success quickly in a reversal of the inexorable rise in obesity. Labour governments have always risen to the health challenges of the day. We should not flinch from this one.