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UK Government crushes sugar tax dream, but it is not over yet.

September 28, 2015 | Financial Saviour

What a difference a week makes. On Friday 18th September, 140,000 individuals plus a well-known TV chef were eagerly awaiting a response from the UK Government to a petition that began online just under a month ago. Little did they know, however, the collective mood would be slightly more hushed as the campaign entered its fourth week.

The TV chef in question is Jamie Oliver; the petition is for a tax to be introduced on sugary drinks in the UK; and the Government response was, by many accounts, disappointing.

Sugar_tax_goverment_response

It wasn’t so much the manner in which the Government bluntly dismissed the proposed 7p sugar tax, but the fact that expectation had led many petition signees to believe that a thumbs up from the Government would merely be a formality. Perhaps it was wrong for such an abundance of hope to attach itself to this petition, and perhaps in doing so the manifestation of such was simply setting itself up for an inevitable knockback after three long weeks of waiting.

But maybe the sugar tax was different.

People love having something to campaign for. If it strikes a personal chord with members of the public and they feel strongly enough about it, they will stick with the campaign through thick and thin, full of belief that a change can be made.

So take childhood obesity, an issue close to the heart of many in this country; this petition was now their opportunity to raise awareness with the backing of someone with a proven track record in getting youngsters healthier. What was there not to be hopeful about? After all, when public health is at stake, surely it is the responsibility of the Government to step in and intervene, right?

We’ve seen it before: cigarette tax, cigar tax, beer tax, cider tax, wine tax; essentially any product containing a trace of tobacco or alcohol has had a tax stamped on it by the UK Government because it all links back to public health in the long run, and no one can dispute the statistics of chain-smoking or alcoholism.

Tobacco & Alcohol tax | Create infographics

 

Click through the graph headings above to see the different taxes included in the price that the everyday consumer pays for the various alcohol and tobacco products on offer – the standard rate VAT of 20% is also included in this.

It shouldn’t be too surprising that in the alcohol sections, the tax increase parallels the increase in alcoholic volume, and to a lesser extent in the tobacco section, that cigarettes and hand-rolling tobacco are taxed higher than cigars and chewing tobacco.

These higher tax figures help us identify exactly where the Government have pinpointed risk to health. Indeed, you would expect an individual who excessively drinks high volume sparkling cider to have their health more at risk than another individual who excessively drinks still cider with a low volume. All kinds of genetic and environmental factors could be brought into this, but to the Government it is in plain black and white – the higher the risk to health, the more tax you will pay on the product.

So does their response to the petition dismiss excessive sugar as a risk to health?

No, not at all. But that may well be the reason why so many got their hopes up about this campaign, and why the subsequent response had much more hard-hitting repercussions that channelled into bitter disappointment.

If there is a tax on products that pose a risk to health such as tobacco and alcohol that pose, then surely a tax on sugary drinks could be deemed just as crucial, in terms of taxpayer money going back into the NHS to fund treatments?

Maybe, but that’s not the way the Government sees it at present.

They would, after all, have to be living on a different planet altogether to be completely oblivious to the issue of childhood obesity, and how much it is costing the NHS year upon year. But they also make it clear that sugary drinks are not the sole cause of this problem, and are working on improvement strategies geared more towards a prevention than a cure.

So while the sugar tax dream has taken a huge blow after so much expectation, it is by no means over. Time will be taken for the campaign to reassess, refuel, and come back stronger, and this slight knockback may one day be looked back on as the very start of a long-term sugar tax success.

You can view the sugar tax petition here https://petition.parliament.uk/petitions/106651 and keep up to date with the upcoming Parliament debate. In the meantime, if you are in need of any help or advice on any tax matters, get in touch with Financial Saviour today for a fast and friendly response.

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