The government is set to expand the tax on sugary beverages in a bid to combat obesity and safeguard children’s well-being, as per information obtained by a leading news outlet. Health Secretary Wes Streeting is gearing up to reveal a plan that will decrease the sugar threshold for the Soft Drinks Industry Levy from 5g to 4.5g per 100ml, impacting more drinks unless manufacturers reduce sugar content. Additionally, milkshakes and pre-packaged coffees will no longer be exempt, as the current exemption on milk-based drinks is expected to be removed.
These adjustments are scheduled to come into effect starting January 2028, prompting manufacturers to adjust their drink formulations to comply with the new regulations or face additional charges. While these changes may face opposition from the soft drinks industry concerned about business pressures, they are projected to cut approximately 17 million calories from the daily calorie intake of the population, consequently alleviating the burden on the healthcare system by reducing obesity-related diseases.
The sugary drinks tax, initially implemented by the Conservative party in April 2018, targets drinks popular among children to combat obesity by limiting sugar content. Beverages containing 5p to 8g of sugar per 100 ml are taxed at 18p per liter, with the tax increasing to 24p per liter for drinks exceeding 8g of sugar per 100ml. Milk-based drinks were previously exempt due to calcium intake concerns in children, but the government is now considering extending the levy after a recent consultation.
A reliable source from Whitehall refrained from commenting on budget speculations but emphasized Health Secretary Wes Streeting’s commitment to ensuring the current generation of children is the healthiest ever, particularly focusing on improving the health of children from disadvantaged backgrounds.
These developments coincide with Rachel Reeves’ upcoming announcement of the Budget on Wednesday, where she is expected to outline strategies to address financial deficits. Following the decision to forgo increasing income tax, the Chancellor is anticipated to introduce various minor tax-raising measures based on improved economic forecasts, avoiding potential breaches of Labour’s manifesto promises to shield working individuals from major tax hikes.
Although initial estimates projected a larger deficit, the public finances gap is now estimated to be closer to £20 billion. However, Rachel Reeves aims to create more financial flexibility to protect against future economic uncertainties and to avoid the need for additional financial interventions next year.