Osborne's disastrous sugar tax decision in the Budget


George Osborne made a truly horrible decision in the Budget yesterday: the one about a sugar tax.

So today I can announce that we will introduce a new sugar levy on the soft drinks industry.

Let me explain how it will work. It will be levied on the companies. It will be introduced in two years’ time to give companies plenty of space to change their product mix.

It will be assessed on the volume of the sugar-sweetened drinks they produce or import.

There will be two bands – one for total sugar content above 5 grams per 100 millilitres; a second, higher band for the most sugary drinks with more than 8 grams per 100 millilitres.

Pure fruit juices and milk-based drinks will be excluded, and we’ll ensure the smallest producers are kept out of scope.

We will of course consult on implementation.

We’re introducing the levy on the industry which means they can reduce the sugar content of their products – as many already do.

It means they can promote low-sugar or no sugar brands – as many already are.

They can take these perfectly reasonable steps to help with children’s health

Of course, some may choose to pass the price onto consumers and that will be their decision, and this would have an impact on consumption too.

We understand that tax affects behaviour. So let’s tax the things we want to reduce, not the things we want to encourage.

It's not that taxing sugar is a particularly bad thing to do. There's other nice and desirable things that we tax like booze and insurance. Hey, got to get the revenue where you can.

Rather, what worries us is the monumental mountain of lies that the campaign for this tax has been built upon. Sugar consumption has been falling in recent decades even as the country gets ever porkier. It is therefore not sugar consumption driving the fact that we're all becoming lardbuckets. If that is so the tax won't achieve the stated goal.

However, what will happen as a result of giving in to the misinformation being shouted from the rooftops is that every Single Issue Fanatic will now be concocting plans to bombard us, and more crucially the government, with demands for whatever absurdities they can conceive of imposing upon us. Whatever the actual merits of a sugar tax (none, but that's by the by) the caving in to the fanatics has just made future public policy worse.

Just not a good idea.