Wednesday 16 December 2015

Obesity - the role of government

Thanks to the abject incompetence of Southern Trains/Network Rail, my train journey to London yesterday took 90 minutes longer than it should have done. As a result I had time to do something I rarely do these days and write a full speech for an obesity conference I was due to attend. The topic was 'The role of government - policy interventions'.

Unfortunately, the conference was yesterday and as a result of the aforementioned incompetence, I was not able to get there in time and the speech went undelivered. So here it is...

It is a principle of mainstream economics that governments should only intervene in markets if there is evidence of market failure. Possible market failures include monopoly, lack of competition, price fixing, negative externalities and consumer ignorance.

To be clear, the market has not failed just because some people are not eating what Jamie Oliver or Sally Davies thinks they should be eating. It has not failed just because some people have got fat. Since the food industry and retail industry are highly competitive and offer a very wide choice, there are only two plausible issues that might require the attention of the government.

Firstly, there could be negative externalities, but claims about obesity ‘costing’ society billions of pounds rely on largely intangible costs that affect the individual, not other people. It is far from clear that obese people incur higher healthcare costs over the course of a lifetime. Indeed, there is evidence that their costs are lower.

Secondly, there could be consumer ignorance. This can be addressed by the school system to some extent and through better labelling of food products. Food labelling in Britain is as thorough as it is anywhere in the world but there is scope for improvement. It is not always easy to tell how many calories are in the whole product, for example. Such issues would have to be dealt with by working with industry since food labelling is an EU matter.

That is the limit of justifiable government action to make the market function effectively. It must be stressed, however, that the likes of Action on Sugar don't want a well functioning market offering reasonably well informed consumers choice and low prices. They want to tell people what to eat, using force as much as possible and using taxes to punish those who don't want to comply.

This is very obvious if you look at their attitude towards fizzy drinks. On the face of it, this should be the last target of the food police. Action on Sugar and Public Health England say they want reformulation but soft drink companies were reformulating when most of these people were in short trousers. Coca-Cola alone has one reduced sugar brand and two zero sugar brands to accompany its main brand. These reformulated varieties are advertised as much, if not more, than the original brand. They are on the same shelves at the same price as the original brand.

So if, like me, you prefer to buy the original brand rather than the reformulated brands, it should be obvious that you are making a rational, informed choice in a free market. But this isn't good enough for the fanatics (nothing ever is). They stamp their feet and scream about Big Soda. They make hysterical comparisons between soft drinks to cigarettes. They protest against Coke sponsoring the London Eye. They demand a tax on soft drinks and, above all, demand that the amount of sugar in Coke be reduced so that nobody can buy a real can of Coke.

Moreover, they want to do the same thing with every other product that is made tasty with sugar. Not just sugar, in fact. They also want to see mandatory reductions in fat content and further reductions in salt content.

These are the demands of an extremist single-issue pressure group that knows that the lobbying game requires asking for more than you expect to get. What is depressing - nay pathetic - is that Public Health England has endorsed virtually all of their proposals - the sugar tax, the reformulation, using the law to force shops to display products where bureaucrats think they should be displayed, the advertising bans, et cetera.

All of these policies have something in common - a total lack of a track record in reducing obesity anywhere in the world.

If you wanted to reduce the obesity rate, the obvious thing to do is learn from countries which have much lower rates of obesity. Alternatively, you could look back in British history to a time when the obesity rate was trivially low, such as the 1960s, and learn from what we did then. But there is a strange refusal on the part of the anti-sugar campaigners to learn any such lessons, or even ask the question, presumably because the answers would disconcert them.

If you look at slimmer countries, you will find no real advertising restrictions, no reformulation and no taxes on food and drink. One of Europe's slimmest countries, Denmark, repealed its fat tax, abolished its soft drink tax and abandoned its sugar tax in the light of experience.

Similarly, if you look back fifty years to when the obesity rate was running at about one per cent, you will see that per capita sugar consumption was at least 20 per cent higher than it is today. There was, of course, no advertising ban, no reformulation and no tax on soft drinks. There was, however (according Public Health England), 24 per cent more physical activity.

In other words, the solutions put forward by Action on Sugar, and endorsed by Public Health England, do not follow from a diagnosis of the problem. They are the same old tax-and-ban policies borrowed from the anti-smoking lobby which in turn were borrowed from the temperance movement. They have since been borrowed by everyone from the anti-gambling lobby to the anti-meat lobby. The fact that each of these issues is totally different from the other does not seem to register with the campaigners. Something must be done, they say, and this is something, therefore it must be done.

That is not good enough. It is far from obvious that something must be done, but even if it must, this grab-bag of neo-prohibitionist measures is not it.

To the government, I say this. Do not be intimidated by the so-called public health lobby. Yes, they will go crying to the press if you do not capitulate to their every demand. They will say you have caved in to 'Big Food'. They will accuse you of ignoring their precious computer models. But if you give in today, they will come back tomorrow with an even longer list of demands and will complain just as loud. A Conservative government has no votes to win from the nanny state lobby and there is no point trying.

Revive the Responsibility Deal, by all means. Teach cooking in schools. Encourage physical activity. Make food labels crystal clear. But let's not have state control of the food supply.

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