Coke’s worst nightmare comes true as UK introduces sugar tax in Budget 2016

MARCH 17, 2016
News.com.au

The sugar tax will be unwelcome news for companies like Coca-Cola as it will likely be passed on to consumers. It will take two years to come into effect in the UK.
UK CHANCELLOR George Osborne has announced a tax on sugary drinks to clamp down on childhood obesity in the annual budget released on Wednesday.
Speaking in the UK parliament the treasurer said five year olds consume their body weight in sugar each year and within half a generation 70 per cent of young boys and girls are expected to be overweight or obese.
“I am not prepared to look back at my time here in this Parliament, doing this job and say to my children’s generation: I’m sorry. We knew there was a problem with sugary drinks. We knew it caused disease. But we ducked the difficult decisions and we did nothing,” he said.
The tax will come into effect in two years time and be in two bands — one for total sugar more than five grams per 100 millilitres and one for drinks with more eight grams per 100 millilitres. Pure fruit juices and milk drinks will remain exempt and it’s expected to raise more than $1 billion a year to be spent on school sports programs.
Anti-sugar campaigner Jamie Oliver tweeted his delight at the news, saying “We did it!!! A sugar levy on sugary sweetened drinks … A profound move that will ripple around the world … business cannot come between our kids health.” (sic).
The celebrity chef had previously campaigned in favour of the “bold, brave and logical” move and said it was amazing to see the result.

British Finance Minister George Osborne with the Budget papers in a red briefcase. Picture: AFP/ JUSTIN TALLISSource:AFP
It’s not the only bold move in the Chancellor’s eighth budget which included a range of measures to create a simpler tax system for businesses and individuals while also cutting the corporation tax and cracking down on multinationals like Apple and Google to make sure they pay their fair share of tax.
He announced the government will fund longer school days for children to play sport in and are looking at making maths compulsory to age 18 in what was billed as a “budget for the next generation”.
Smokers will also face higher prices for hand rolled cigarettes in particular, while beer, cider and whisky drinkers escaped a rise in alcohol taxes that would impact on wine and other spirits.
In addition to his optimistic tone Mr Osborne warned of a “dangerous cocktail” of risks for the global economy that have justified an austerity-based approach in a world where Japan, Sweden, Denmark, Switzerland and the European Central Bank have all moved to negative interest rates.
“Financial markets are turbulent. Productivity growth across the west is too low. And the outlook for the global economy is weak. It makes for a dangerous cocktail of risks. But one that Britain is well-prepared to handle, if we act now so we don’t pay later,” he said.
Quoting statistics from the Office for Budget Repsonsibility he said the UK economy is forecast to grow two per cent next year rather than the 2.4 per cent forecast in the November statement.
He also warned of the risks voting to leave to the EU could have on the economy through an extended period of uncertainty that would impact on business and consumer confidence. As a whole, the latest document unveils more than $7 billion worth of spending cuts to keep the UK on track to a budget surplus in 2019/20.
Labour leader Jeremy Corbyn said the “cruel and callous” approach of the government had hurt the most vulnerable people in society in what is seen as his biggest test as opposition leader.
The MP for Islington said austerity is a “political choice and not an economic necessity” where “the price of failure is being born by some of the most vulnerable in society”.