Tory leadership: Boris Johnson promises review on 'sin taxes'

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Boris Johnson has promised to review so-called “sin taxes” to see if they unfairly target those on lower incomes.

The Tory leadership contender wants to examine whether levies on tobacco, alcohol and sugar are effective, and has vowed not to introduce any new ones until the review is complete.

Mr Johnson said Brexit would allow the UK to examine its tax policy.

It comes after both leadership candidates were asked at a hustings about a proposed new tax on milkshakes.

Foreign Secretary Jeremy Hunt said he would rather target manufacturers than taxpayers when it came to less healthy products.

Mr Johnson and Mr Hunt are vying to be the next leader of their party and the next UK prime minister, and have been appearing in a number of events across the UK.

The Conservative Party’s 160,000 members will begin voting for their preferred candidate next week and Theresa May’s successor is expected to be announced on 23 July.

Mr Johnson repeated his opposition to a milkshake tax, saying it would “clobber those who can least afford it”.

“If we want people to lose weight and live healthier lifestyles, we should encourage people to walk, cycle and generally do more exercise,” he said.

“Rather than just taxing people more, we should look at how effective the so-called ‘sin taxes’ really are, and if they actually change behaviour.”

He added: “Once we leave the EU on 31 October, we will have a historic opportunity to change the way politics is done in this country. A good way to start would be basing tax policy on clear evidence.”

Mr Hunt said he would “threaten” manufacturers of milkshakes, or less healthy food and drink, with legislation “if they don’t play ball”.

He added: “But my experience is, if you make that threat, you don’t actually need to follow through with the dreaded milkshake tax.”

Tax per litre

The so-called “sugar tax” came into force in April 2018, meaning drinks with more than 8g per 100ml are taxed at 24p per litre, and those containing 5-8g of sugar per 100ml are taxed at 18p per litre.

It was introduced in 2016 by then-Chancellor George Osborne to tackle childhood obesity, while raising £275m for the Treasury.

Pure fruit juices are exempt as they do not carry added sugar, while drinks with a high milk content are currently exempt due to their calcium content.

The tax on beer works in a similar way but on the percentage of alcohol – meaning for every litre bought, between 8.4p and 24.7p of the price is tax, depending on its strength. This amount rises for stronger drinks too, such as cider, wine and spirits.

For a pack of 20 cigarettes, £4.57 of the price paid, plus 16.5% of the retail price, is tax. For a 10g cigar, £2.85 of the price is tax, and for a 30g packet of hand-rolling tobacco, it is £7.04.

Cancer Research UK chief executive Michelle Mitchell said such taxes had “a positive effect”.

She said: “They have been highly effective in bringing down smoking rates to record lows, including within deprived communities, and the Treasury’s own analysis showed the tax on sugary drinks took 90 million kg of sugar out of the nation’s diet on day one.

“Physical activity is one way to lose weight, but the government also has a big role to play if we are to significantly reduce obesity levels.”

The chief executive of Action on Smoking and Health, Deborah Arnott, also warned it would be a “grave error” to move away from taxing cigarettes.

“Smoking kills more than 100,000 people in Britain each year, and the evidence from other countries is clear – when taxes stop going up, smoking rates are likely to stop going down,” she said.

“That’s why this government and its predecessors have implemented an escalator for tobacco taxes which increases prices above inflation at every Budget.”