Pre-packaged milkshakes and lattes are set to be included in the government’s new ‘sugar tax’ as it attempts to tackle obesity in the UK.
The labour government is set to end the exemption for milk-based drinks from the tax on sugary drinks, although the move would not include drinks made in cafes and restaurants.
Chancellor Rachel Reeves is set to announce the change in Wednesday’s Autumn Budget as part of a range of levies aimed at tackling a £30bn hole in the public finances.
The levy will raise up to £100m a year from 2027, according to The Times.
Sugar tax branded ‘regressive’
Earlier this month, health secretary Wes Streeting said that the government “won’t look away as kids become unhealthier” after a survey suggested that a fifth of children in year six are obese.
“This government will not look away as kids get unhealthier and critics urge us to leave them behind.
“Obesity robs children of the best possible start in life, sets them up for a lifetime of health problems and costs the NHS billions”, he added.
The Institute of Economic Affairs (IEA), a free market think tank, has described ‘sin taxes’ like the sugar levy as regressive as they take a “greater share of income from the poor than from the rich in all plausible scenarios”.
Christopher Snowdon, head of lifestyle economics at the IEA, said: “The sugar tax has been such a dramatic failure that it should be repealed, not expanded.
“It has been costing consumers £300m a year while childhood obesity rates have continued to rise.”
A form of sugar tax has been present since 2016, when then-Chancellor George Osbourne , announced the levy on drinks with a sugar content of more than 5g per 100ml, a threshold which led numerous brands to reformulate their products to avoid the tax.
Rubicon, Lucozade, Fanta, Ribena, Old Jamaica Ginger Beer and Irn-Bru all reduced the sugar content below the 5g minimum.