Rachel Joyce: The case for a "fat tax"

Dr Rachel Joyce was Conservative candidate at the general election in Harrow West, where she obtained a 5.7% swing from Labour – more than double the London average. She has been an NHS doctor for more than twenty years and has worked as both a Director of Public Health and a Medical Director.

The coalition’s much needed emergency budget will be held on June 22nd, with speculation from economists that VAT will rise to 20% this year. It is estimated this would raise £11.5 billion per annum. The Conservative manifesto commitment was for a 80:20 split between cuts and tax rises to tackle the deficit. This was re-iterated by David Cameron on the Today programme only recently when he claimed it was the international gold standard in deficit reduction.

The think tank Reform suggested instead ending zero-VAT rating for food, children’s clothes, electricity, gas and house building (with protection for the poorest), stating this could raise £8billion a year. This has, however, been criticised as a move that would hit the poorest the hardest.

There is an opportunity however to do two things here – raise much needed revenue whilst also changing the country for the better. David Cameron says that we should be using the tax and benefits system to reward people to do the right thing. The emergency budget therefore needs to look at all the areas where a tax rise (and also tax reductions) might benefit the country in other ways.

I would like to put the case for a “Fat Tax” – as proposed by the Food Standards Agency, and supported by the National Obesity Forum. Obesity could cost the NHS in England £6.3 billion by 2015 if no effective action is taken. In England now, almost two-thirds of adults and a third of children are either overweight or obese, and without action this could rise to nine in 10 adults and two-thirds of children by 2050. One option would be to increase tax - the so- called “fat tax” on processed foods, snacks and sugary drinks – those that are high in fats and calories and low in nutrients.

It has been proven that higher taxes on tobacco historically has saved lives by encouraging people to quit. In contrast, the efficacy of the many millions of pounds spent on Britain’s stop smoking advisory service is unproven and very uncertain. In other words – fiscal policy has a much greater influence on people’s lifestyle choices than expensive individualised support services provided by the NHS. This means that a tax rise could also correspondingly reduce the huge financial burden of obesity on the NHS.

Studies have shown that in modern Britain, it is the poorest that are most likely to be obese, supported recently by a report published in the 'European Health Journal'. In fact, according to Diabetes UK, the cheapest foods in Britain are the most calorie-dense – one factor leading to the poor being more at risk from obesity.

The Faculty of Public Health has also argued that the Common Agricultural Policy has a harmful effect on public health through its policy of subsidising less healthy food products, and little or no subsidy or encouragement for healthier food. The FPH state that if the CAP subsidies were directed to encouraging a substantial increase in the production of fruit and vegetables, this could see the end of the artificial inflation in the price of these healthier products.

I’m no expert in tax collection, but I do realise that taxation should be kept simple – and that changes to the VAT system would be a burden on retailers. However a fiscal policy for healthy food could see increases in the price of unhealthy foods and reductions in the price of healthier foods – with the corresponding improvements in our health, a reduction in health inequalities and a reduction in the burden of obesity on the NHS at the same time.