The economic justification for government intervention in this instance is that obesity has 'social costs'. This means that the cost of obesity is greater to society than the 'private cost' to the person who carries the weight. The difference between the two is the 'external cost'. Those external costs might be the extra burden on the NHS from treating obesity but also possibly sick days through related illnesses down to something as simple as the difficulties someone who is overweight may have playing a constructive role in many of society's activities.
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| 2007: Plenty of fat to tax! |
So far, so economically rational. But does a tax on fatty foods actually solve the problem? And is there a chance it will create other problems?
I must declare an interest here because two years ago I would have been a 'target' for this tax. I am 6 foot tall and used to weigh 17 stones (107 kilogrames). I am now 14 stone (88 kilogrammes). How did I do it? By eating less calories and doing more exercise. Why did I do it? Because I was fed up of looking at a fat bloke in the mirror, because my daughter was starting to run around and I couldn't keep up with her, and because there's only so many times you can put up with being drawn as a
big blob by a four year old child when on holiday with your friends' families.
Did eating less cost me less? No it didn't. It is a sad fact that eating healthily in this country is more expensive. Also, I spent a lot of money on getting the right clothes and shoes and equipment for exercise as well as gym membership.
Furthermore, I read a lot of magazines and websites about how to get fit and eat properly and I kept a daily diary of everything I ate and did exercise wise.
Put all that together and it worked. Took me 9 months to lose 3 stone and I ran a half-marathon comfortably at the end of those 9 months having not run for 18 years.
The point of this story? For people to lose weight and get fit, they need to have money, and they need to have the right information. A 'fat tax' would give them neither.
If you put a tax on fatty foods you will make them more expensive which should mean that people will swap to more healthy foods. But the difference in cost is large enough that it would have to be a large tax. That would leave BOTH cheap fatty foods and healthier foods more expensive. Food is a need, so by making all types of food more expensive you are lowering living standards.
And this is where we get to 'fairness'. I hate to generalise, but obesity is more of a problem in this country for people on low incomes than those on high incomes. So a 'fat tax' will hit the poor harder, and is therefore regressive. The consequences of that could be uncomfortable for a government attempting to present themselves as fair and progressive.
What's more, many fatty foods are rather addictive, and quite frankly rather nice. Translated into economic terms - the quantity demanded of them would not go down anywhere near as much as the tax would take their price up. In other words, demand for fatty foods is 'inelastic'. The way tax works in this country, firms collect tax for the government - which means that taxes affect the supply of a good first, UNLESS they can pass on the entire tax to consumers - which in the case of fatty foods, they can, as demand won't fall by as much as the tax applied. So the quantity of fatty food eaten won't drop much. What will happen is that government will get a lot of tax revenue.
Therefore, government intervention to solve the problem of obesity solely by way of a tax on fatty foods would not be effective and could result in further problems.
However, many say that the tax would be like a 'nudge' in a particular direction. Well, why not give consumers a nudge away from fatty foods and a further nudge towards healthy ones. The government could subsidise healthy foods, based upon the argument that they will gain that back through less cost to the NHS and less sick days from employees.
Also, as I said, it was information that really helped me. Government could make sure that everyone who wants to lose weight has access to the right information presented in accessible ways to help them. Much of this is already out there. But there is a lot about healthy eating, but is there really enough about the benefits of what really made a difference for me, exercise. So they can provide a lot of information about that too.
So, they could also subsidise gym membership, although the problem with that would be that people would still have to go to the gym once they are members - which has always been a problem. They could subsidise running clothes and shoes, although again the key is getting people out running.
Point is, it all goes back to each and every individual. Every time I bring up a solution I seem to be bringing up an argument against it. This is why we have ended up back at the 'fat tax', because if we can't get people to lose weight, let's at least try and raise the money from them to pay for the problems their weight causes, right?
The proof, on this issue, will be in the (gluten and sugar-free) pudding (yuk!)
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| 2009: calories in < calories out |
Did eating less cost me less? No it didn't. It is a sad fact that eating healthily in this country is more expensive. Also, I spent a lot of money on getting the right clothes and shoes and equipment for exercise as well as gym membership.
Furthermore, I read a lot of magazines and websites about how to get fit and eat properly and I kept a daily diary of everything I ate and did exercise wise.
Put all that together and it worked. Took me 9 months to lose 3 stone and I ran a half-marathon comfortably at the end of those 9 months having not run for 18 years.
The point of this story? For people to lose weight and get fit, they need to have money, and they need to have the right information. A 'fat tax' would give them neither.
If you put a tax on fatty foods you will make them more expensive which should mean that people will swap to more healthy foods. But the difference in cost is large enough that it would have to be a large tax. That would leave BOTH cheap fatty foods and healthier foods more expensive. Food is a need, so by making all types of food more expensive you are lowering living standards.
And this is where we get to 'fairness'. I hate to generalise, but obesity is more of a problem in this country for people on low incomes than those on high incomes. So a 'fat tax' will hit the poor harder, and is therefore regressive. The consequences of that could be uncomfortable for a government attempting to present themselves as fair and progressive.
What's more, many fatty foods are rather addictive, and quite frankly rather nice. Translated into economic terms - the quantity demanded of them would not go down anywhere near as much as the tax would take their price up. In other words, demand for fatty foods is 'inelastic'. The way tax works in this country, firms collect tax for the government - which means that taxes affect the supply of a good first, UNLESS they can pass on the entire tax to consumers - which in the case of fatty foods, they can, as demand won't fall by as much as the tax applied. So the quantity of fatty food eaten won't drop much. What will happen is that government will get a lot of tax revenue.
Therefore, government intervention to solve the problem of obesity solely by way of a tax on fatty foods would not be effective and could result in further problems.
However, many say that the tax would be like a 'nudge' in a particular direction. Well, why not give consumers a nudge away from fatty foods and a further nudge towards healthy ones. The government could subsidise healthy foods, based upon the argument that they will gain that back through less cost to the NHS and less sick days from employees.
Also, as I said, it was information that really helped me. Government could make sure that everyone who wants to lose weight has access to the right information presented in accessible ways to help them. Much of this is already out there. But there is a lot about healthy eating, but is there really enough about the benefits of what really made a difference for me, exercise. So they can provide a lot of information about that too.
So, they could also subsidise gym membership, although the problem with that would be that people would still have to go to the gym once they are members - which has always been a problem. They could subsidise running clothes and shoes, although again the key is getting people out running.
Point is, it all goes back to each and every individual. Every time I bring up a solution I seem to be bringing up an argument against it. This is why we have ended up back at the 'fat tax', because if we can't get people to lose weight, let's at least try and raise the money from them to pay for the problems their weight causes, right?
The proof, on this issue, will be in the (gluten and sugar-free) pudding (yuk!)
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