John Oxley: We got the sugar tax wrong. Let’s admit it and work to get rid of it

Growing up, it was always a fun bit of historical trivia to learn of the absurd taxes levied in past times.

Peter the Great and his beard tax, Britain’s own window tax, Nero and his charges on human urine – each mentioned in passing as a monument to the follies of the past. Each one is an indication of governors adopting strange methods to either extract revenue or control the population.

Sadly, of course, these impulses remain present in our current lawmakers, and silly taxes are more than a curio of the past.

This week, Labour announced its intention to extend one of the most modern ones – the sugar tax. Since 2018, the punitive levy has punished our tastebuds, with charges of up to 24p per litre for the most sweetened soft drinks on our shelves. Now, seemingly, this has not gone far enough, with the government looking to extend it to pre-packed dairy drinks, including milkshakes and latte drinks. The justification, of course, is the fight against obesity. But really, this should be no excuse for the extension of a bad tax that meddles in people’s lives.

At very first principles, there is something miserly and controlling about these sorts of charges.

Beyond the basic tenets of food safety, using the tax system to interfere with what people consume is overbearing. It means penalising some of the smallest joys in life. The levy is both a burden on private individuals and on businesses, who are forced to reformulate recipes to meet government diktat, not consumer demand. For those of us who believe in freedom and responsibility, this is prima facie bad government, not much different from a Tsar demanding you shave your face.

On a policy level, too, the sugar tax is bad. Like any measure pushing up the price of food, it is a regressive tax. It is the poorest who spend the highest proportion of their income on groceries, and so feel the pinch more when those prices change. Since its introduction, studies on the existing levy have shown that sugar consumption in wealthy households continued to rise while poor households cut back. This is a policy that goes against what is usually considered good when it comes to taxation.

Most importantly, however, the policy does not really work towards its stated aims.

While it is true that the consumption of sugary drinks has gone down, the real issue of obesity is overall calorie consumption, which has barely budged. Even according to the government’s own figures, the extension of the levy is anticipated to cut just one or two calories per day off our average consumption. Or, in other words, the same amount as we burn from a minute of sitting down. Across the course of a year, it is about a slice and a half of cake’s worth of consumption each.

The discrepancy comes from a fairly obvious bit of human behaviour. Denied the pleasure of a can of something fizzy and sweet, people find it elsewhere rather than going without. Multiple times around the world, this sort of policy has led to the same kind of displacement. When a small Californian city introduced a levy, people just drove elsewhere to shop. In Mexico, they moved from soft drinks to chocolates and sweets. In another American trial, they drank more beer. Indeed, this government’s extension of the levy suggests that the same thing is happening here, with tastes diverting into untaxed vices.

The sugar levy is a bad policy. Poorly connected to its overall goals, unproven in its effects, unfair to the poor and, ultimately, incompatible with personal freedom and responsibility. The problem is, however, that it has also been a Conservative policy. It was us in government who introduced the tax after pushing for it for many years. It seems hypocritical now for our party to push against it in opposition. Really, however, we should see this as an opportunity.

All of us in this party know how the performance of the last 14 years of power hangs around us like a millstone. To find some way forward, we have to start differentiating ourselves from that past. That means honesty with the public and with ourselves. It also means being precise about things we got wrong, openly admitting them, apologising, and moving forward. This issue coming up again is a chance to start doing it.

The sugar tax is a policy we can look at and say, “We got it wrong”. The policy was a poorly thought-out one, which went against our general principles. It has achieved little and certainly would have swayed few people to vote for us. With new leadership and an eye for the future, we can be honest about it. We can frame it as something we have learned from, both in the policies we believe in and the way we assess our actions. Opposing this can be framed as more than hypocritical opportunism but as a rejection of the mistakes of our past.

To have a hope of regaining credibility with the public, we are going to have to show this contrition again and again. It is not enough to say that we have changed and that we can be trusted again. The party must demonstrate that it has done the hard work of confronting where it has gone wrong and being bold enough to admit it. This will apply to bigger things than the sugar tax, but we must start somewhere.

Voters are going to expect honesty from the party in the coming years.

That means we cannot paper over or elide where we got it wrong in the past – and the election result last year showed how badly they thought we got it wrong.

With Labour faltering, it may be tempting and easy to try to put those mistakes in the back of our minds, but we have to confront them and do it honestly. One of the persistent things was spending time on small policies that weren’t really conservative, effective, or popular. By admitting that the sugar tax was one of those, we can both begin that process and use it to attack government action without looking hypocritical.

Indeed, it’s the perfect opportunity to forego the spoonful of sugar, voluntarily and without a tax, and take our medicine.