Thoughts on Fat Taxes

Elliot Bidgood, 19 February 2013

Yesterday the Academy of Medical Royal Colleges (AOMRC) published Measuring Up: The Medical Profession’s Prescription for the Nation’s Obesity Crisis, its contribution to the on-going debate about obesity as a public health problem. The report noted that a quarter of the current adult population is obese and that current figures foretell serious problems with the next generation – one third of primary school leavers are overweight, for example. Press attention has focused partly on the recommendation to ban advertising for foods that are high in fat, sugar and salt before the watershed so that fewer children will see them. The report also called for better calorific labelling, council powers to enforce restrictions on the placement of fast food outlets near schools and leisure centres and a ban on junk food and vending machines in hospitals. These all seem like very sensible recommendations. A £100 million NHS budget allocation for weight-loss interventions in each of the next three years was also suggested, which could help ease the recent pattern of postcode lottery rationing for bariatric surgery on the NHS, provided the money can be found.

The more thorny part of these discussions, however, always tends to be around the possible use of ‘fat taxes’, ‘soda taxes’, NHS user charges and so on as financial disincentives not to eat unhealthily, or at least to ensure that the health service is to some extent reimbursed for the strain imposed on it by the obesity epidemic. User charges in the NHS for obesity-related conditions would tend to be counterproductive in my view – there’s evidence from the US that user charges are penny-wise and pound-foolish, as they give people a reason not to have issues checked out (this on top of the British ‘stiff upper lip’ instinct that’s already proven to be damaging to our  health), increasing the chance that problems will instead have to be treated at a stage when they are more complex and costly. Clearly, this directly flies in the face of preventative public health efforts with regard to obesity. And that’s before you get to the ‘down the rabbit-hole’ issues of how we can fairly morally weight all our different personal risks and decide who gets unimpeded access to a service all of us have paid into anyway. There’s even evidence that healthier people could counter-intuitively be more of a net strain on the NHS than the obese, smokers and alcoholics, as those with those unhealthy habits tend to have lower life expectancy and thus do not contribute to the population ageing-related pressures that are also currently challenging the service.

With more general punitive ‘fat taxes’ on unhealthy foods, there’s a rightful objection to them on the grounds that they would tend to function as a kind of regressive tax on working families with less access to good nutrition. Even if you go with the view that it is a myth that processed food is cheaper than healthier options, absent a much more effective public campaign to raise public awareness and help steer people towards the right choices on an effective scale, these approaches are nevertheless socially unjust (though contrary to some claims, there is evidence from some studies that prices can marginally influence behaviour). Moreover, in October 2011 Denmark began experimenting with a tax on food products containing more than 2.3% saturated fat, but finding that the tax had little health impact and high economic costs, the Danes abandoned the policy in November 2012. Other countries that were watching the Danish experiment may have lost interest in the idea as a result of its apparent failure.

At the same time the tax on fatty foods was lifted, Denmark also scrapped plans for a tax on sugary drinks, a soda tax, which is perhaps a shame, because it denies us a similar case study of the specific measure the AOMRC did call for – a tax designed to increase the price of sugary drinks by 20%. While all of the same objections to fat taxes could well apply here, it does at least seem like a better-thought out measure than a broader fat tax, and I’d imagine the Danish experience may be part of the reason why the AOMRC have kept their ambitions small (the AOMRC report also notes the political fallout of the ‘pasty tax’ in last year’s budget). It doesn’t hit as larger a part of the diet of most people, instead zeroing in on one symbolic luxury. Its comparative simplicity and smaller scope also means it might avoid the massive administrative difficulties and economic spill-overs associated with the Danish fat tax, though we’ll see. If the government did ever insist on pressing ahead with a tax of this nature, it would be a better way to go, and if they were then still to move on to a fat tax as Prime Minister David Cameron once indicated he might, then the experience could at least help them negate some of the more disastrous implementation problems witnessed in Denmark. Overall, however, the AOMRC’s non-taxation related public health proposals would seem to be a better and more straightforward consenus starting point on how to tackle obesity.