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Bitter Pill for Sugar Tax


Posted by Dr No on 13 October 2015

white_gold.jpgBritain and sugar go back a long way, and the history is not that glorious. Sugar, or white gold as it was known, was the reason for the infamous trade triangle, the round trip that took slaves from Africa to the American colonies, sugar from the colonial plantations to Britain, and goods from Britain back to Africa to buy more slaves. By the mid 18th Century, the trade was so lucrative that the then British Government, blissfully unaware of yet to come concepts of coercive healthism and the nanny state, did the fiscal thing, and slapped a tax on sugar, making it a luxury item. The situation was turned on its head in the mid 19th Century, when the Free Breakfast Table movement, an early Liberal free school meals idea aimed instead at the working classes as a whole, brought about the abolition of duties on sugar and other breakfast table commodities, and the masses were freed to shovel ever larger quantities of sugar down the cake hole. Every Little Helps, as they say at Tesco. Even today, The Great British Bake Off, when it isn’t about the BBC showing off its ethnic credentials, is all about devising yet more elaborate ways of getting yet more sugar through the cake hole.

One result, according to some, is the rise of obesity, and its attendant flood of health related problems. Whether this is as true as Marie Antoinette’s apocryphal ‘Let them eat cake’, to the coercive healthist, to whom every public health problem is an addiction nail to be hit with a tax hammer, the answer is simple: slap a rising tax on it. We are addicted to our cars, so tax fuel; we are addicted to alcohol, so slap a tax on it, and even better, introduce minimum unit pricing; we are addicted to tobacco, so tax that too, in ever increasing amounts. In these evidence based times, it helps to have an on-message economist with a half-baked what-if spreadsheet that shows, at least in the fantasy world of the science that makes astrology look credible, that an increase in the price of sugar/alcohol/tobacco/fuel/whatever leads to a fall in the consumption of whatever. Behind all these happy, or should that be unhappy, camper forecasts is the notion of price sensitivity, or more specifically, price elasticity of demand.

In the cabals of the coercive healthists, including that one known for the time being as Public Health England, it is an article of faith – regardless of the evidence – that all harmful and addictive products have high price elasticities of demand. In the science TMALC, price elasticity of demand, or PED, is given a number, where zero equals perfectly inelastic (price has no effect on demand) through minus one (unit elasticity, a percentage increase in price is matched by the same percentage fall in demand) and on to minus infinity, or perfect elasticity, a sort of economists’ black hole, where the lights go out, and the computer starts talking to you in a Stephen Hawking voice. PEDs between zero and minus one are said to be relatively inelastic, and those less than (more negative) than minus one are said to be relatively elastic.

Most everyday commodities, and especially those addictive nails the coercive healthists so want to tap on with their tax hammers, have PEDs between zero and minus one. The closer the PED is to zero, the more the happy taxers are on to a hive into nothing, as appears to be the case with smoking in recent years, where steep prices increases have seen no meaningful change in smoking prevalence, though the latest year on year figures (2012-2013) do show a modest decrease, mostly in women. But even more negative (closer to minus one) PEDs are in reality a world of diminishing returns. Since the percentage fall in demand is always less than the percentage rise in price, as the price races ahead, the corresponding fall in demand, in absolute terms, gets less and less. Given say, a PED of –0.5, the first 10% increase in price (say £100 to £110) results in a 5% fall in demand (say 100 units to 95 units ie a 5 unit fall), but the next 10% price hike (to £121, ie an 11 unit increase) generates only a 4.75 (5% of 95) unit fall. As is so often the way, a optimistic relative number can hide a disappointing absolute number.

Fun as it is to poke holes in the coercive healthists’ pile’m low tax’m high arguments, it seems that the mathematical mumbo jumbo has been overtaken by political events. In a smoke and mirrors move remarkable even by its own dismal standards, the DoH appears to have blocked publication for now of a sugar tax dossier prepared by Public Health England. Dr Sarah Wollaston, the Devon MP for Ladies Who Catalogue Shop and, as it happens, chief pongo of the Health Select Committee, is furious. Heremy Junt, the health secretary, has replied, saying, in effect, jam tomorrow, but never today: PHE’s report is ‘integral to ongoing policy development’, and will be published later this year, alongside a Government strategy on childhood obesity. A bitter pill for a rightly indignant Wollaston to swallow, but for others, evidence perhaps that King Sugar is still white gold, and those that produce it have no intention of letting a sugar tax get in the way of profits. Greedy sugar producers, perhaps, but a public health menace? Most unlikely: Dr No bets a pound of sugar that the evidence, when it is belatedly published, that a sugar tax will curb consumption will owe more to wishful thinking than hard reality.

3 comments:

Erm spent a few hours viewing and deliberating over this: http://parliamentlive.tv/Event/Index/3f723c6f-05dc-4862-9de7-2c68e2005bfa, this being a Health committee meet at the HoC re the Childhood obesity strategy and the proposal that a 20p per litre tax should be imposed on sugared soft drinks so as to reduce the girth of the fat little barstewards. Thing is, I don’t see them… where are they…? NIMBY I think.

That aside, I have much respect for the opinions (and fears) of Dr Paul Garragh and Mark Clark as nice gents they appear to be. However Prof MacGregor as an obvious zealot of the health police puts the fear of God up me.

Quotable quotes:

“… artificial sweeteners are not good for you”

“… artificial sweeteners do lead to obesity”

(He proposes the tax on all carbonated drinks.)
!Interesting stuff (or not): http://care.diabetesjournals.org/content/32/4/688.short)

“We need to ban all advertising of unhealthy foods” “that is what is to happen in the next ten years” “there will be a ban on all advertisements”

“The people who get premature cardiovascular disease and cancer are the socially deprived and they die fifteen years before US…when you go to these estates EVERYONE is obese. They go to the local supermarket and buy the cheapest foods the cheapest things. They don’t listen to health messages at all and we must make sure our policy targets THEM and that’s why we need to change the food environment. We need to make unhealthy foods more healthy and the healthy foods more attractive, not to people like OURSELVES but to THEM…” “…the socially deprived are not US”

The capitals are mine and I do wonder why Prof MacGregor thinks the socially deprived buy the cheapest foods…? Maybe they don’t have HIS income, poor little things that THEY are.

On a closing note of the above, I did find the Witnesses’ more credible and self-assured. (Also view 11.21.11 – a few tad overweight folk (in the background) there – also thought the Prof was verging on overweight…)

On past campaigns to make us healthy, wonder about salt. See http://www.ifs.org.uk/publications/7330. Speaking for myself, if food reformulation leads to absence of taste, I sprinkle salt on it…

I could witter on about alcohol and cigarettes, but it is all about demographics, isn’t it?

Anna :o]

really informative article with authenticity.

we founded a miraculous medicine Plan C

Bitter pill for sugar tax, what a metaphor. I must say that sometimes I do think that they are not seeing the reality in the moment when they are trying to sell us such taxes.


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