Give to the rich, take from the poor: Corporate tax cuts will exacerbate UK’s obesity crisis, warn health groups

26 Sep 2022 --- Following last Friday’s UK government budget announcement – the first under new Prime Minister Liz Truss – the British Pound dropped to a record low of £1.07 to US$1. Even though the soft drink tax remains untouched for now, several health organizations have denounced the new budget, stating that the new tax cuts will put a financial burden on lower-income families, potentially putting healthy and nutritious foods further out of reach.

“While there was no mention in last week’s mini-budget about the government’s alleged plans to scrap its evidence-based obesity strategy, we must remember that there is still a full budget planned for later in the year whereby changes relating to this strategy could be introduced or axed,” Mhairi Brown, policy and public affairs manager at Action on Sugar and Action on Salt, tells NutritionInsight.

“The Treasury is also conducting a review of all the proposed and current measures aimed at tackling obesity which, if halted or removed, would be disastrous for both public health and also the many responsible food businesses that have spent years and vast amounts of money to comply with these measures.”

Poverty pushes obesity
The budget changes, as announced by Chancellor of the Exchequer Kwasi Kwarteng, will reduce income tax as well as the stamp duty on home purchases. It also scraps the proposed rise in corporate tax planned by the previous Boris Johnson administration.

Following Kwasi Kwarteng’s announcement of new tax cuts, the British Pound fell to its lowest standing ever against the US dollar. “Economic growth isn’t some academic term with no connection to the real world. It means more jobs, higher pay and more money to fund public services, like schools and the National Health Service (NHS),” stated Kwarteng last Friday. Following his announcement, the Pound Sterling sank to its lowest point in 37 years.

“There is a clear correlation between poverty and obesity,” says Amy Browne, stewardship lead at CCLA Investment Management and a member of the Investor Coalition on UK Food Policy. “Among adults in the UK, the most deprived regions have almost double the prevalence of obesity compared to the least deprived.” 

“Rather than making bad food cheaper, the Government should be incentivizing companies to make healthier products more available, more affordable and more accessible,” she explains.

Now, more than ever
Many health organizations, fearing that the government is catering to corporations, have stated that simply keeping regulations such as the soft drink levy will help to offset the possible rise in inflation that may result from following the announced tax cuts.

“One such measure – the soft drinks industry levy – demonstrates best practice for both business and for the nation’s health (especially those from the most deprived areas),” says Brown. “In fact, as a result of the levy, 48 million kg of sugar was removed per year (2015-2019) from the nation’s diet, and a whopping £1 billion (US$1.08 billion) has been raised to fund important activities like school breakfasts for vulnerable children.”

“The obesity strategy must now be championed and protected by the government to help prevent the unnecessary deaths and suffering of thousands of people caused by unhealthy diets while saving the NHS billions of pounds a year,” she continues. 

“Essentially, if the government’s rumors of disposing of the sugar levy on soft drinks plus other measures to cut preventable illness such as the ban on TV advertising of junk food before 9 pm turn out to be true, then this would be a dangerous step backward in addressing a major public health crisis,” Katharine Jenner, director of the Obesity Health Alliance, tells NutritionInsight. 

Putting food on the tableEnding health policies due to the cost of living crisis will eventually affect those with the lowest incomes most.
The possibility that this new government might overturn or scrap many of the health regulations passed under Boris Johnson has led members of the Investor Coalition on UK Food Policy, as well as a coalition of over 70 health organizations and health professionals, to issue a statement calling on the UK government to uphold the present policies. 

Both statements hold that using the “cost-of-living crisis” as justification for ending the health foods and obesity strategies is shortsighted and misguided since they will ultimately affect the poorest members of society the hardest. 

“No robust evidence exists to suggest that cutting any of these measures would alleviate the impact of the cost of living crisis,” underscores Jenner. “In comparison, cutting preventable illness is crucial if the Government is going to tackle the NHS backlog, realize its targets to halve childhood obesity by 2030 and deliver on leveling up, as poor diet is a key driver of regional health inequalities.”

“The total economic impact of obesity equaled £58 billion (US$62.4 billion) in 2022, the cost of obesity-related disease now costs UK businesses £27 billion (US$29.9 billion) per year,” stresses Maria Larsson Ortino, ESG policy lead at LGIM. “It is therefore very hard to see how abandoning the UK obesity strategy campaign would benefit society, businesses, individuals, and protect the NHS, in either the short or long term.”

“The UK Government must stay the course,” she concludes.

By William Bradford Nichols