Put the sugar tax on hold after Brexit, says FDF
Speaking at the Food and Drink Federation’s conference last week, director general Ian Wright said: “The sugar levy - and any other fresh burdens - should both now be put on hold.”
Implemented in its current form, a sugar levy would add unwelcome additional burdens on hard-pressed industry at a moment of crisis, he said.
Finance minister George Osborne announced in March this year a tax would be imposed on sugar-sweetened beverages with two bands in place, one for total sugar content above 5 g per 100 ml and a second band for the most sugary drinks with more than 8 g per 100 ml.
It is expected to raise £520m (€662m) which will be channeled into funding sports in schools.
“Government has an obligation to act quickly to support confidence and competitiveness – and to provide reassurance and stability. So I believe implementation of the proposed apprenticeships levy and the sugar levy - and any other fresh burdens - should both now be put on hold.”
The chief of the food industry lobby, whose members include soft drink manufacturers Coca-Cola and PepsiCo, also questioned whether there is currently enough staff to actually implement the tax given the new challenges Brexit has thrown up. “It seems to me inconceivable that the small number of civil servants with expertise in excise duties within HM Revenues and Customs (HMRC) would, at this time, be working on the sugar levy and not on the replacement for the customs union.”
A short report by Harry Fairhead, policy analyst at the Taxpayers’ Alliance, a campaign group whose stated mission is to “change the perception that big government is necessary and irreversible”, claims that if Britain’s sugar tax has the same effect on jobs in the UK as it did in Mexico, there will be 5,624 fewer jobs which would equate to the Treasury receiving over £17.4m (€ 20.6m) less in employment taxes.
Jonathan Isaby, chief executive of the TaxPayers' Alliance, said: “The government should be focusing on policies which encourage economic growth, so the sugar tax should be immediately scrapped."
‘Brexit didn’t make obesity disappear’
But public health campaigners, who fought to see the sugar tax come into existence, do not agree.
Malcolm Clark, co-ordinator, Children's Food Campaign told FoodNavigator: "The UK's very high levels of childhood obesity, dental decay and diet-related ill-health did not magically decrease after the Brexit vote. For the Food and Drink Federation to use the referendum aftermath as an excuse to call for the weakening of the Government's commitment to tackling these problems shows how quick they seem to put short-term profits ahead of the longer-term physical and economic health of the nation.”
Labour MP for Birkenhead, Frank Field, tweeted that Brexit made it more important than ever that the sugar be implemented, while other social media users slammed FDF’s response as opportunistic.
But given that many analysts and food business operators are predicting that food prices in the UK will rise, will a levy that raises the price of certain products even further retain the same amount of public backing?
Clark said: "Nobody knows what Brexit will do for food prices, or what the impact will be now of the liberalisation of the EU trade rules on sugar from
next year. But the evidence since 2008 suggests that in economically uncertain times, consumers are more likely to vote with their wallets - hence why a tax that might increase the cost of sugary drinks can be a particularly useful tool in changing what people buy."
And what of the Childhood Obesity Strategy?
Wright said FDF would continue to plan for publication of Childhood Obesity Strategy even among all the current uncertainty.
Publication of the much-anticipated and much-delayed strategy was first expected in the autumn of 2015. In February the government said ti would be published this summer but this is now looking unlikely.
"Whenever it comes, we will be there to support our members and promote the industry's excellent work around health and wellbeing," said Wright.
"We continue to oppose the sugar levy which is not evidence-based and will not be in the least bit effective."
A spokesperson for FDF said this opposition would include highlighting to the government the costs of introducing and collecting the tax;the complexities inherent in its design;and its economic consequences at a time when business confidence is fragile.
Some of the uncertainty faced by the UK in the past weeks - the Brexit result followed by the subsequent resignations from Prime Minister David Cameron, widely presumed successor Boris Johnson and UKIP leader Nigel Farage - came to an end yesterday as it was announced Theresa May will become the UK’s next prime minister, the second Conservative woman to do so.