The hospital sugar tax is a stroke of evil genius

    18 January 2016

    Simon Stevens, the head of the NHS (may peace be upon it), today unveiled plans to put a quasi-tax on soft drinks in hospitals. On the face of it, this is the kind of hare-brained idea one associates with the loony left council of Lambeth where Stevens was once a Labour representative. On reflection, however, I think Stevens is a genius.

    Cutting costs in the NHS is a challenge that has defeated every government. Getting its staff to accept pay cuts is very difficult. Being a genius, Stevens has worked out that if you can’t cut the pay of doctors and nurses, you can always claw it back in the workplace. Taxing their lunch is a cunning step in that direction.

    The wonderful thing about stealth taxes of this sort is that you can pretend they are for the good of people’s health. Never mind that soft drinks only provide three per cent of the nation’s calories. Never mind that their biggest consumers are those aged 11 to 18 who are less likely than adults to be obese. And never mind that the impact of soft drink taxes on soft drink consumption, let alone on obesity, has been pitifully small in every country that has experimented with them. They sound like the kind of thing that might work and that is enough.

    Stevens, being a great mind, knows that demand for sugary drinks is inelastic, so people keep buying them with little regard for price changes. He estimates that the new ‘tax’ will siphon between £20 million and £40 million out of the pockets of his captive market every year. This is not a fortune in NHS terms, but it is not a bad start. The important thing is to set a precedent. When the policy is shown to have had no impact on the waistlines of doctors and nurses, the size and scope of the ‘tax’ can always be expanded.

    Admittedly, there are downsides to Stevens’s plan. The tens of millions of pounds it will raise are currently earmarked for a new initiative that has ‘wellbeing’ in its title. That will obviously be a waste of money, but taxes are hardly ever hypothecated in practice so we can assume that the cash will soon find its way into general NHS expenditure. Regrettably, there will be some collateral damage for hospital visitors, but they have more options than porters and cleaners who have to be on site all day. Patients will be largely unaffected since they get their meals for free. The tax will mainly fall on the 1.3 million NHS workers.

    That is what is so brilliant about Stevens’s plan. He has found a way to be applauded for price gouging in an uncompetitive retail environment. The kind of people who make placards saying ‘Save Our NHS’ will pat him on the back for effectively giving his staff a pay cut. And the most brilliant part of all is that the British Medical Association can’t go on strike about it because they are fervent supporters of taxing fizzy drinks everywhere. They are being given a taste of their own preventive medicine and they have to swallow it.

    That is genius. Evil genius, admittedly, but genius nonetheless.

    Christopher Snowdon will be speaking at the Spectator’s annual health debate at IET London, Savoy Place, on Tuesday February 9

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