St Helena shows UK the way with fizzy drinks tax

St Helena appears to be showing Britain the way to tackle obesity, by introducing a sugar tax.

A levy on high-sugar drinks was announced in the island’s budget in the very month that England’s chief medical officer warned that the British government might have to consider such a measure.

But Dame Sally Davies said she hoped it would not be needed in the UK.

St Helena Government (SHG) is introducing the 75p-per-litre excise duty from May.

It is a move that some on the island have long campaigned for, including shop owner Nick Thorpe, who sees the vast scale of imports of sugary foods and drinks.

The island is reported to import nearly a million cans of fizzy drinks per year, for a population of just over 4,000 people.

The island’s incidence of type 2 diabetes, which is linked to obesity, is among the highest in the world. The government has warned that the cost of treating the condition has put a massive strain on the island’s health service, as well as damaging the lives of diabetics.

The new budget includes an additional £692,000 for the health service, and more than £1.5 million has been set aside to fund infrastructure improvements to the hospital, including the furnishing of a diagnostic suite.

Colin Owen, the island’s Financial Secretary, said: “The introduction of a new tax on high-sugar drinks and higher-than-inflation increases on tobacco form part of a raft of measures which demonstrate that SHG takes the health of St Helena seriously.”

He also announced the introduction of liquor duty at £3.50 per litre, and a new duty of £1 per litre for drinks with an alcoholic content of 3% or below.

Councillor Ian Rummery pointed out the timeliness of the move in an email to St Helena Online. He wrote:

“I see that a sugar/fat tax is being debated in the UK media with statements from Dame Sally Davies, the Medical Officer, and the BBC World Service Business Matters programme has a week-long special on obesity and discussions on a fat tax.

“While the world talks about it, here on St Helena we have just introduced a tax on sugary carbonated drinks.”

Dame Sally first raised the prospect of a sugar tax in comments to the UK Parliament’s Health Select Committee. She also suggested that sugar might be addictive – though some scientists disagreed.

In his budget speech, Mr Owen said: “On St Helena, over 300,000 litres of carbonated sugar sweetened beverages are imported per year.

“This equates to around 67 litres per year for each person currently on island, each of us drinking around 200 cans a year. Within this, some people will consume very little, while others may consume many more.

“Just to be clear on the figures, we import just under ONE MILLION cans of fizzy soft drinks each year. And each can on average contains over 35 grams of sugar.

“We currently have a very high rate of obesity, and type 2 diabetes. This has a very high cost to the St Helena health service and there is significant evidence to show direct links.

“Every additional regular can-sized, sugar-sweetened drink per day, increases the risk of developing type 2 diabetes by 18%.

“A number of studies document a link between fizzy soft drink consumption and higher blood pressure.

“And dental health is negatively influenced by consumption. Studies have shown that consumption nearly doubles the risk of dental cavities in children.”

He added that healthier diet drinks were currently more expensive than high-sugar drinks, especially those from South Africa.

“Research has shown that increasing the price of fizzy soft drinks will lead to a fall in consumption, as consumers switch to alternatives.”

The island budget also included a range of tax increases for alcohol, and a 5% increase in tax on all tobacco goods, taking the cost of a packet of 20 cigarettes to just under £5.

Mr Owen said: “The rate of throat cancer on island is one and half times more than the UK, the highest risk factors for throat cancer being smoking and drinking alcohol to excess. This above-inflation increase supports the health service.”

In his speech to Legislative Council on Friday, 21 March 2014, Mr Owen said:

“Madam Speaker this budget is different. It seeks to support not just economic development, but to support SHG’s top priority, health – and not just the health of individuals but that of the nation.

“I do not believe it’s right anymore to sit on the sidelines. We need to grab every opportunity available to support our health and green objectives, and that includes using the tax system to provide appropriate financial incentives. We need to change our tax policies to address the growing number of concerns around diabetes and cancers.”

He said the budget had been compiled by councillors, not just officials, which had brought fresh ideas.

SEE ALSO: 
Killer diabetes puts island under strain, says the Castle
Diabetes cases soar as island struggles with cost of healthcare
My sadness and anger at diabetes crisis, by writer Doreen

Plastic bag tax aims to cut landfill waste

The budget included new taxes of 5p on plastic bags and 1p on styrofoam containers for takeaway foods – both excise taxes, imposed within the island, as opposed to customs duties.

Mr Owen said: “Both products are made from petroleum and are not degradable. St Helena does not have the facilities to dispose of them and they end up in the landfill.

“Roughly 500,000 bags and containers are used per year and this is only likely to increase as tourism grows. Similar policies to reduce use of plastic bags have been very successful in places such as Wales.”

Budget facts

In his budget speech, Mr Owen said:

Prices in island shops rose by only 1.5%, against a forecast of just over 5%. But it was expected to rise during 2014.

The resident population averaged 4,297 people through 2013, and is forecast to reach to nearly 4,500 people in 2014.

More than 360 Saints were working on the airport project and unemployment was at an all-time low, with vacancies in government and the private sector. In total, 550 people were working on the project.

Income tax was set to have raised £3.4 million, some £325k ahead of targets.

Saints are letting out more properties than ever before.

Earnings from customs duties on alcohol and tobacco exceeded targets by £115,000 and £10,000.

The offshore fishing vessel MFV Extractor had been purchased, partly with funds from Enterprise St Helena (ESH) and would soon be leaving Cape Town to fish St Helena’s seamounts.

ESH had assisted in 30 youth training schemes and five public-private partnerships. More than 40 people enrolled as apprentices.

A 30-year planned maintenance programme for government housing began with the rewiring of flats in Jamestown.

Planning permission was granted for 65 homes in Half Tree Hollow, featuring wheelchair access and rainwater harvesting.

Two new “chuck and chew” waste lorries had been procured, along with 1,500 new wheelie bins.

Four conservation and environmental projects, due to start in April 2014, attracted grants worth more than £260,000.

Significant advances were made in standards of education. Almost half of the young people who took GCSEs in 2013 achieved a C grade or better in English and maths.

Mr Owen also said that December 2013 saw the introduction of a Minimum Income Standard. “St Helena should be proud that it is leading the world in ensuring that our benefits system properly reflects the actual costs of living here,” he said.

“This will be reviewed at least annually, with benefits adjusted accordingly – a tangible demonstration of our commitment to protect the most vulnerable from the rising cost of living. But this is only a starting point and we all know that there is much more to do.”

Other recommendations in the Sainsbury Report, commissioned from York University, would be considered over a five-year period – including a child benefit allowance, which the government planned to introduce from April 2015.

But he added: “Bringing benefits up to the level that we all see as desirable will be expensive, and to introduce every proposed reform now would simply be unaffordable.”

A settlement of £13.55 million in UK aid was confirmed on 13 March 2014 – an increase of £150,000 – with a further £4.5 million to cover the running costs refurbishment of the RMS St Helena.

The amount set aside for overseas medical referrals rose to £947,000, more than double the previous year’s figure.

Mr Owen said the budget also reconfirmed the government’s funding for the National Trust, New Horizons, Heritage Society and South Atlantic Media Services, and saw increased funding to SHAPE and the Public Solicitors Office, along with new funding for the Human Rights Office.

European funding of around 21.5 million Euros was likely to be made available for infrastructure development on St Helena, Tristan da Cunha and Ascension Island over the period 2016-20. Specific projects had yet to be formally agreed.

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