The ‘Pop Tax’

In Plaid Cymru we have learned over the years to be patient when campaigning for things. Often it has taken several years for other parties to be persuaded of the benefits of our policies. We were in favour of banning smoking in public places long before other parties came around to the idea, and the same process happened when it came to a presumed consent system for organ donation.

So it was a welcome surprise to see the Conservative UK Government – yes a Conservative Government – announce a levy on sugary drinks, just three and a half years after Plaid Cymru first proposed it.

As the details of the Chancellor’s plans continue to emerge, it is clear that his plans don’t go far enough, welcome as they are. Reports on the tax state that the Treasury has not yet made up its mind about what the precise levy will be, but from the initial comments made by the Chancellor it looks less ambitious than Plaid Cymru would like to see. We are also concerned with the Chancellor’s comments that manufacturers will have to decide whether or not to pass the cost onto the consumer.

Plaid Cymru has always preferred that the tax be imposed at point of sale, like VAT. This is because the primary motivation behind the tax was to reduce consumption of sugary drinks, delivering significant health benefits in the future. If manufacturers do not pass on the full cost of the levy to the consumer, then it is likely the potential benefit to public health will be reduced.

Our initial proposal suggested that a 20 pence per litre levy on sugary drinks would help reduce the levels of obesity in Wales by 8,300 people, and reduce the numbers of people who are overweight by 13,300. It would raise around £45 million even accounting for the reduced consumption that would result. It’s likely that, should the initial comments from the Chancellor about the tax remain the same, there will be fewer benefits of introducing the Conservative tax. It is, however, an extremely positive development that all parties in Wales now agree with the principle behind the tax (the Conservatives in Wales had voted against the proposal last Christmas), and we are moving onto to debating the details.

Plaid Cymru still intends to press ahead with our own ‘pop tax’, and we will immediately seek its devolution so we could operate it differently to maximise the health benefits and ensure revenues remained in Wales. Now that the Chancellor has essentially conceded the principle that sugary drinks should be taxed, we see no reason why this can’t happen.