Rachel Reeves plots huge new tax days after embarrassing U-turn | Politics | News
The Chancellor is reportedly planning a new tax for the Budget later this month. Currently milk-based drinks are exempt from the tax on sugary drinks, which is 18p per liter for soft drinks containing 5 grams or more of sugar per 100ml. However, according to the news, the exemption days for milk have coincided.
Rachel Reeves also plans to lower the threshold to 4 grams per 100ml, with changes said to come into force in April 2027. The soft drinks industry claimed these changes would increase prices in supermarkets by 5% and reduce people’s daily calorie intake by only about the equivalent of half a grape. The so-called “sugar tax” (Soft Drinks Industry Tax) was introduced by the Conservative Government in 2018 in the hope of reducing childhood obesity.
Shadow chancellor Sir Mel Stride said: “If these reports are true, Labour’s new milkshake tax would move the goalposts once again for an industry that is already cutting sugar and making the changes responsibly. It will see businesses that play by the rules punished, products suddenly dragged into the tax net – all to save Rachel Reeves.” Until now, milk-based drinks have been exempt from tax due to fears they could prevent children from getting enough calcium.
But a Treasury spokesman said: “Although young people still do not consume the recommended levels of calcium, milk-based drinks do not make a significant contribution to intake.
“Milk-based beverages provide only 3.5% of calcium intake for children aged 11 to 18, compared with 25% from plain milk and 38% from cereal products, including fortified white bread.”
Gavin Partington, chief executive of the British Soft Drinks Association, criticized the changes, saying: “Tightening the Soft Drinks Industry The tax risks undermining years of investment in reformulation for little health gain.
“More than seven in 10 soft drinks sold in the UK already contain little or no sugar, and many have now reached the limits where they can technically be reformulated.
“Removing the goalposts at a time when families are under intense financial pressure would add £220 million to costs and increase shelf prices by up to 5%, all of which would mean a calorie reduction equivalent to half a grape per person each day.
“There’s no meaningful health benefit; just higher prices for shoppers and more costs for British businesses. It’s simply not worth it.”
