Sugar tax just a way of getting money out of the poor, claims think tank
The Institute of Economic Affairs has said the 'stealth tax', which will add 48p to a two litre bottle of pop, won't help fight obesity
THERESA MAY’s Sugar Tax has been branded a £1 billion “stealth tax” on Britain’s hard up families that will do nothing to tackle obesity.
A think tank said Ministers would be “more credible” if they admitted the fizzy drink levy was just a convenient way of getting money out of the poor.
The Institute of Economic Affairs (IEA) said it was perverse to single out products such as Pepsi as the main reason for the obesity crisis as official figures showed the amount of sugar consumed from soft drinks had almost HALVED since 2003.
Chris Snowdon, the IEA head of lifestyle economics, added the tax would do little to force drink giants to reformulate their products.
Nearly half the market is already made up of diet drinks.
And Mr Snowdon said it would be “commercial suicide” for Pepsi or Coca-Cola to change the recipe of their best-selling drinks.
He added that given the Sugar Tax will push up the UK’s inflation rate by 0.25 per cent in 2018-2019, leaving the Government faced a huge bill from the increase in benefit and pension payments linked to the official cost of living.
This means the levy could end up costing the Treasury more than it is expected to collect – almost £1 billion in the first year.
Mr Snowdon said: “The Sugar Levy will be a regressive stealth tax which does nothing to improve the country’s health.
"The international evidence is clear, there is no correlation between sugary drink consumption and obesity.
“It’s time for the Government to come clean about its flawed logic.”
The tax slaps a charge on soft drinks containing more than 5mg of sugar per 100ml – adding around 8p to a can of Red Coke or 48p to a two litre bottle of pop.
All other products – from biscuits to cakes, sweets and calorie-laden coffees escape.
Former Chancellor George Osborne unveiled the plans in his final Budget in March.
Proposals for the levy were finally released last week alongside the Prime Minister’s obesity strategy.
Health Secretary Jeremy Hunt has yet to comment on either move – four days after they were announced.
Treasury Secretary Jane Ellison last week launched a fierce defence of the Sugar Tax – saying some soft drinks contain more than a child’s recommended daily intake of sugar in just one can.
She told the Sun last week: “It’s a levy on producers to encourage them to do the right thing and cut the amount of sugar they add to soft drinks.
“If they cut the sugar, they won’t pay the levy.”