The proposed sugar tax on soft drinks will fail in its health aims, result in fewer jobs and damage the UK’s economy, according to the TaxPayers’ Alliance (TPA).
In this year’s Budget, chancellor George Osborne proposed a tax on sugary soft drinks.
The TPA has now called on the government to abandon the levy on soft drinks, after its study calculated 5,624 jobs in the soft drinks industry and associated sectors will be lost, equivalent to £90,622,36 in average industry and related-sector pay.
The study said a sugar tax would lead to the treasury receiving £17,399,370 less a year in job-related taxes, including £11,188,648 of employee’s National Insurance contributions and Income Tax, as well as £6,210,723 of employer’s National Insurance contributions.
Jonathan Isaby, chief executive of the TPA, said: “Not only will the sugar tax fail in its public health aims, there is a very real risk that it will destroy jobs and harm economic growth. Given it will also hit the poorest households the hardest, the already flimsy case for a sugar tax is rapidly dissolving.
“The government should be focusing on policies which encourage economic growth, so the sugar tax should be immediately scrapped.”
An HM Treasury spokesperson said: "The soft drinks industry levy is a major step forward in our efforts to tackle childhood obesity, treating obesity and its consequences costs the taxpayer £5.1bn every year.
"The money from the levy will go towards funding more school sport, and expanding school breakfast clubs.”
The TPA has previously criticised the government’s decision to pursue a levy, calling it a "bungled" tax that will "hit the poorest families hardest”. It also claimed it would have no "meaningful" impact on calorie intake.