Wednesday, 16 March 2016

The sugar tax has more holes than a fizzy drink addict's teeth - UPDATED

The Chancellor's traditional Budget rabbit-out-of-the-hat is a sugar tax.
  • Except it isn't a tax on all high sugar foods, but just on drinks. 
  • Except it isn't a tax on all high sugar drinks, as milk and fruit juice based drinks are exempt. 
  • Except it isn't even a tax on all those as drinks produced by small manufacturers are also exempt. 
The world will divide into those who think that a 'nanny state' tax such as a sugar tax is a good thing or not. Should we trust people to make their own mind up about what is healthy and what isn't or should we use taxes to put the price up on the unhealthy stuff to try to stop people buying it?

To be fair, there is already a tax on cigarettes and on alcohol in an effort to reduce consumption of harmful products. So why not sugar?

Irn Bru's maker AG Barr share price fall

But regardless of your views on that aspect, why all the caveats and get out clauses? Why should Irn Bru be subject to this new tax when Frijj will not be - despite having even higher sugar content? And why should small scale producers be let off this tax when they are not let off alcohol taxes for example?

The answer seems pretty simple. The chancellor is an astute politician. He knows that this is a debate that is easy enough to frame and so will dominate the airwaves for the next few days. And he has got telegenic TV chef Jamie Oliver on board to fight his case for him. Various people have pointed out that Mr Oliver's high sugar recipes for kids won't be affected by the tax. It means that the big holes in his budget (including a massive £3.5bn cut in public spending in two years time) won't be looked at with the same rigour. And he hopes that the general public won't realise that he has played fast and loose with the numbers, pushing and pulling them in all directions to make his sums add up.

Yet again George Osborne has borrowed from the future in order to make his sums add up in the present. But at some point the future will be now and Osborne will have to explain why there is a massive debt and no money to pay it.

UPDATE - Thanks to Sky's Sophy Ridge for pointing out that the Frappuchinos and other heavily sweetened drinks produced by Starbucks and other coffee companies will be exempt as they are milk based. 

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