Changing the recipe for growth

As someone who warmly welcomed the government’s pledge to create the ‘healthiest generation of children ever’ in its 2024 manifesto, I was pleased to see that this year’s Budget delivered a significant stepping stone to this milestone. The Soft Drinks Industry Levy (SDIL) has been expanded to include sugary milk-based drinks and the lower threshold of the tax has been lowered from 5g to 4.5g, bringing more products into its scope. At a time when children’s health looks to be moving in the wrong direction it’s heartening to see action being taken to tackle food-related ill health and the worsening inequalities highlighted by the latest data.

Why do we need to act on children’s health and food? 

Everyone deserves access to affordable, nutritious food, no matter where they live. But for many children and families this isn’t the case – and it is children living on lower incomes or from racially minoritised backgrounds that are disproportionately missing out.

This means that these children aren’t getting the nutrition they need, leading to increasing rates of food-related ill health such as obesity or diabetes. Children living in lower-income areas are more likely to be exposed to junk food advertising in the places they spend their time and are more likely to rely on convenience stores to buy food. These stores often have far fewer healthy options available.

But when Government and the food industry work together, unhealthy options can be moved out of the spotlight and make eating well easier for everyone. This is what happened with the SDIL.

What have we learned so far from the Soft Drinks Industry Levy? 

In 2018, the SDIL came into force across the UK, incentivising food and drink companies to change their recipes, or reformulate, to make their products healthier. As a result: 

• Over £2.2bn has been raised for the UK Exchequer since 2018. The levy consistently raises £300-£350 million annually. 

• Research suggests that SDIL is already having positive, tangible health benefits, preventing over 5000 cases of obesity per year among Year 6 girls, with bigger impact for those living on lower incomes. 

• Neither sales nor profits were affected – in fact, soft drink sales rose by 21% between 2015-2020.  

The expansion of the SDIL to include milk-based drinks demonstrates government confidence in the approach and opens the door to reformulation of a wider range of unhealthy products.  

Why do we need a new levy? 

We’ve been working with the Recipe for Change coalition, which has brought together a wide range of stakeholders to explore the potential of a new levy on salt and sugar. The aim is to further incentivise food and drink manufacturers to make their products healthier.  

The coalition has set out the key benefits of introducing this new fiscal incentive:  

• It makes fiscal sense and could have a positive impact on growth. An extended levy on foods high in fat, sugar and salt could raise an additional £2.9 to £3.4 billion in revenue every year, which could be reinvested in further health interventions. 
• It has a positive impact on health. An expanded levy could reduce average calorie intake by up to 38kcal per person per day, delivering an additional 37,000 – 97,000 estimated years of healthy life to the population.

• It’s a popular policy with the public. Extending the SDIL to other unhealthy food and drink items is popular with the public; 68% support such an extension. Three quarters of adults believe that the funds from the existing sugar levy should fund improvements to children’s health. 

• It will encourage innovation in the food and drink sector. The SDIL demonstrated how existing food and drink manufacturers were willing to explore reformulation. A new levy opens doors for healthy challenger brands to join the market and boost economic growth.   

The impact of having healthier food on shop shelves would drive improvements in public health, contributing to improved productivity and reduced cases of illness-related absenteeism. This has the potential to help ease long term pressures on the NHS and, ultimately, to support economic growth. 

It’s great that government has recognised the benefits of financially incentivising food and drink companies to improve their recipes and embraced the opportunity for collaboration with the food industry. With clear, bold action, we can start to reverse the damaging trends we’re seeing playing out in children’s health.

Building on food policy successes 

With the expansion of the SDIL and other key policy moves this year – including the expansion of Free School Meals to all children in England from families in receipt of Universal Credit – the government has shown its commitment to protecting children’s health.  

Further moves to collaborate with the food industry could do even more to promote health and boost economic growth, starting with the introduction of a new levy of unhealthy foods.

Additionally, the new Healthy Food Standard policy, announced as part of the 10 Year Plan for the NHS, includes measures requiring large food companies to report on the healthiness of their sales, with the eventual aim of implementing targets. At a time when per calorie, healthy food is twice as expensive as unhealthy food, it’s vital that any measures at minimum do not widen existing inequalities. The design of this policy must consider health equity early and must prioritise increased access to healthy food for the communities most likely to be affected by the lack of it.