Conservative leadership candidate Boris Johnson’s team issued a press release this week calling for a curb on so-called “sin taxes”.
Mr Johnson makes a commitment to “launch a comprehensive review into the effectiveness of the ‘sin taxes’ – including products high in salt, fat or sugar – and to assess whether or not these taxes unfairly hit those on lower incomes.”
He also says he will “not increase any of the so-called ‘sin taxes’, or introduce similar taxes, until a review has been completed”.
In remarks to the Sun newspaper – which has campaigned against health-related taxes on food and drink – Mr Johnson said: “Once we leave the EU on October 31, we will have a historic opportunity to change the way politics is done in this country. A good way to start would be basing tax policy on clear evidence.”
In fact, quite a lot of evidence had already been amassed when the government brought in a tax on sugary soft drinks last year – although of course the rights and wrongs of the policy are open to debate.
And there is already an expert review underway into the effectiveness of the sugar tax now.
Taxes on sugar-sweetened drinks have been tried in more than a dozen countries and several American states.
Data is available on most of these schemes, and several literature reviews have been carried out by academics attempting to work out whether sugar consumption tends to go down and health outcomes improve after you raise taxes.
Of course, no one is suggesting that the evidence collected so far is conclusive.
But it’s not clear what Boris Johnson’s team think is missing from the existing research on sugar taxes.
We asked them and we haven’t received a reply. We’ll update if we do.
Do sugar taxes penalise people on lower incomes?
This is a suggestion Boris Johnson and other critics of sugar taxes have repeatedly made.
The idea is that poorer people tend to consume more sugary drinks, so raising taxes means they end up paying more.
This only makes sense if a) the drink manufacturers (the ones who directly pay the tax to government) pass on the cost to shoppers and b) shoppers carry on buying the drinks at the higher price.
In fact, the evidence in the UK is that manufacturers chose to reduce sugar in drinks last year to avoid paying higher taxes. That’s one reason why the new tax brought in a lot less revenue to the government than expected.
But some big-name brands – like Coca-Cola Classic – preferred to keep the sugar content the same and pass on a price rise to consumers.
The big question is whether people will carry on drinking the same amount of sugary drinks and pay the higher price, or whether they will cut down to save money. Or will people ditch the sweet drinks but compensate by eating more sugar in the rest of their diet?
If consumers choose to take the hit and pay higher prices, it’s possible to say that a sugar tax will be “regressive” – which means that it will hit people on lower incomes harder.
But only if you don’t take into account the future costs on an individual’s health of consuming too much sugar now, a point made by the Institute for Fiscal Studies in a recent paper on sugar taxes.
The IFS said: “Soda taxes are relatively effective at targeting young and poor consumers but not individuals with high total dietary sugar; they impose the highest monetary cost on poorer individuals, but are unlikely to be strongly regressive especially if we account for averted future costs from over-consumption.”
We may get answers to some of these tough questions soon – because there is already a review of the sugar tax underway.
It’s being funded by the National Institute for Health Research and the lead scientist is Professor Martin White from Cambridge University.
The study is not due to publish its final results until the end of 2021, although we understand that initial findings may be made public before then.
We asked Boris Johnson’s team whether they were aware of the existing review and how this fitted in with their plans for an additional review. There has been no answer yet.
Has Boris Johnson already made his mind up?
Mr Johnson said he wanted to suspend new taxes until “clear evidence” had been collected. But remarks he made to the Sun suggest he may have already made his mind up about “sin taxes”.
He was quoted as saying: “The Sun’s campaign has been right on the money and it’s time to take a proper look at the continuing creep of the nanny state and the impact it has on hardworking families across Britain.”
The campaign in question is called Hands Off Our Grub and it calls for “an end to the new sugar tax”.
This raises the question of whether Mr Johnson has already decided to do away with the tax, before gathering the evidence he says he wants to see.
We put this to his campaign but haven’t received a reply.
We also asked Mr Johnson whether his adviser Will Walden, who works for a lobbying company that represents Coca-Cola, was involved in the new sugar tax policy.
Several journalists have reported that people close to Mr Johnson deny any involvement on the part of Mr Walden, but Mr Johnson’s team did not put this on the record when contacted by FactCheck.