George Osborne’s sugar tax extends the reach of the nanny state, it is a punitive, regressive tax that will hit the poorest hardest. The Chancellor told the House: “We understand that tax effects behaviour. So let’s tax the things we want to reduce”. This is a naked attempt to coerce individuals into behaving how the state desires, making them pay if they don’t conform.
Extensive research from the Institute of Economic Affairs shows that sugar taxes are a highly regressive tax on the poor. They take a considerably greater share of income from the poor than the rich. Lower income consumers are also less responsive to price changes than the rich. This massively exacerbates the regressive impact.
Research also shows that rather than encouraging consumers to cut sugary drinks out of their diets, sugar taxes force them into buying cheaper, inferior products, sometimes switching to higher calorie drinks in the process. Sugar taxes have been tried in various US states, France, Hungary, Finland, Mexico and Denmark. No impact on obesity or health has ever been found as a result of a sugar tax.
Another point: a pint of cider can contain 20 grams of sugar, yet Osborne is freezing cider duty. Will he then be slapping cider drinkers with a stealth sugar tax instead? Millionaire Jamie Oliver won’t notice the sugar tax hit him in the pocket, the families to whom he preaches on telly will…