In a surprise announcement, Britain’s Chancellor of the Exchequer, George Osborne, Wednesday proposed a tax on sugary drinks during a budget speech in front of a packed House of Commons. The proceeds from the tax, he said, would be used to double sports funding for primary schools.
The move was unexpected, given that Prime Minister David Cameron had ruled out a tax on sugary drinks in October, arguing that there were more effective ways of tackling the country’s obesity problems. He eventually said he was being persuaded, The Guardian reported, even though he resists the idea of new taxes.
“It’s a big signal,” Jamie Oliver, acclaimed British chef, nutrition proponent, and advocate for the tax, told the BBC.
“It’s symbolic that a robust government can actually gain control of big business when it’s having ill effects on child health,” Mr. Oliver said.
The tax would take effect in two years to give companies time to reduce the amount of sugar in their drinks. Though the tax amounts have not been released, they would fall in two categories: A lower tax would be levied on companies producing or importing drinks containing 5 grams of sugar per 100 milliliters, such as Coca-Cola and Pepsi, and a higher one on drinks with more than 8 grams per 100 milliliters, such as Dr. Pepper, Fanta, and Sprite.
Fruit juices and milk-based drinks, such as Starbucks's Frappuccino, would be excluded.
The BBC reports that this new tax could raise the price of a two-liter bottle of soda by as much as 80 percent. It could also bring into government coffers £520 million ($742 million) in its first year.
The British government’s health advisory group, Public Health England, last year recommended a 10- to 20-percent tax on sugary soft drinks. It pointed to successful efforts in Mexico, which introduced a 10 percent tax in 2013 that the country says contributed to a 6 percent decline in purchases of sugary drinks, according to the group’s October report.
“Data on the effectiveness of these measures, while not always robustly evaluated, suggests that reductions in sales have been seen as a result of the imposition of taxes in Norway, Finland, Hungary, France, and Mexico,” the group reported.
It called for the tax as a means to help end growing obesity in the country. The public health advisory says that nearly a quarter of adults, 10 percent of 4- to 5-year-olds, and 19 percent of 10- to 11-year-olds in England are considered obese, with many others categorized as overweight.
But whether sugar taxes make a difference in obesity rates is debated, with some arguing that government should have no role in controlling what people eat and drink. And despite the example of Mexico, it is not always clear if the tax is effective in changing bad habits.
Denmark, for example, introduced a tax on foods high in saturated fat in 2011, widely called a “fat tax,” but dropped it (and plans for a sugar tax) a year later because people simply crossed into bordering Germany to shop and failed to change eating habits, the Danish government said.
In the United States, similar soda taxes have failed to pass in New York State and San Francisco. Only Berkeley, Calif., has been able to pass a soda tax in 2014, though it is not yet clear whether it is helping to reduce obesity rates.
The New York Times points out that while soda taxes have failed, the debates over soda taxes have drawn public attention to health concerns and helped wean many Americans off sugary beverages.
Sales of full-calorie soda in the country have plummeted by more than 25 percent in the last couple of decades.
“The drop in soda consumption represents the single largest change in the American diet in the last decade and is responsible for a substantial reduction in the number of daily calories consumed by the average American child,” the Times reported.