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The Budget: sugaring a bitter pill for public health?


The stand-out headline of the Budget was the slimline rabbit the Chancellor pulled out of the hat in the form of a future sugar levy. This is a victory for many public health campaigners, for Public Health England and the Health Select Committee who all championed a tax on sugary drinks.

The move has also been welcomed by many others including the Association of Directors of Public Health, the Local Government Association and the Faculty of Public Health, though they have pointed out that a sugar levy is only one part of a comprehensive approach to tackling obesity. The clever bit may be the timescales involved, giving producers and marketeers time to reformulate products and influence the public’s thinking, so that consumers trade away from products that will be subject to the levy before it actually comes into force.

However, getting the design of the levy right will be crucial because, as the Institute for Fiscal Studies has pointed out, there can be all sorts of unintended effects of poorly designed taxes. On the plus side, a levy could reduce consumption of sugary drinks, and this could have wider effects than simply reducing calorie consumption, for example, on improving on dental health. But could a levy lead to consumers simply buying cheaper non-branded products with similar amounts of sugar to their branded alternatives? Could it lead to substitution towards alcohol in social situations (particularly as some think companies may find it easier to pass price increases on to pubs than to supermarket customers). Could it end up hitting poorer people’s incomes harder than consumers in general, depending on differential effectiveness in changing behaviour? We don’t yet know, but the Chancellor has certainly been bold and supported the public health community’s call for action.

But the Budget was not just about sugary drinks. On the NHS side there are concerns that changes to pensions will save the Treasury money but, as colleagues at the Nuffield Trust have estimated, may lead to additional costs of £650 million per year for the NHS, putting yet more pressure on the funds that the NHS has to deliver financial sustainability and transformation.

But there were also many wider changes that are likely to affect both the public’s health and the funding of public health initiatives. Tobacco taxes will continue to rise above inflation, wine with inflation, but beer, cider and spirits duties will be frozen. There will also be a new alcohol strategy.

Changes to disability benefits have already created unease on the government’s backbenches, if the changes go ahead they may impact on health and quality of life. However, the Chancellor also announced significant funding for reducing homelessness and that the proceeds of the sugar levy will go to funding school sports. Understanding the net impacts and how they will be distributed through the population means that assessing the effects of these 'pick-and-mix’ policies for the public’s health will not be straightforward.

One final change, on the face of it good news, could turn out to be the bitterest pill for public health. Early in his speech the Chancellor announced that small businesses will no longer pay business rates, saving them £7 billion – a sizeable chunk of the £26 billion that business rates currently raise. What’s this got to do with public health? Well, in November’s Spending Review the government announced it would be consulting on switching the source of local government public health funding from a central grant from the Department of Health to, you’ve guessed it, local business rates. Between now and then of course much could happen, and we need to see the details of the consultation on public health funding and the planned changes to business rates and any compensating income that local government may receive. But, as of now, the real public health danger lurking in the Budget may not turn out to have been sugar after all.