Innocent Drinks' campaign for a reduction on VAT is the best chance for companies and the government to act together for public interest
Recently I announced my support for a campaign being led by Innocent Drinks to reduce VAT on juices and smoothies to 5%. When we shop in the supermarkets we're not paying VAT on frozen pizzas or chips, but we are paying 17.5% on juices and smoothies, which strikes me as odd.
Consumption is price sensitive. When prices drop, people buy more. That is what our children are taught in school and that is how we, as parents, make decisions at the supermarket. As far as I know, this has always been the case.
However, there is another feature of modern Britain that wasn't always true and requires attention: despite the plethora of fruit, juices and smoothies available to us, we don't consume enough fruit.
Thanks to a successful public information campaign, most of us are aware of the need to eat five portions of fruit and vegetables a day to maintain a healthy diet. This campaign was well-supported by the food industry and retailers and now seven out of 10 consumers know about 5-a-day.
However, the same analysis tells us that only three out of 10 of us actually act on this knowledge. Most concerning of all is that almost 90% of children still do not consume this daily guideline amount.
The work of individuals such as Jamie Oliver and bodies such as the School Food Trust will have a positive impact on this in the future, but it would be foolish and naïve to think that a change in behaviour would be immediate. Educating consumers takes time. The government must look at how it can act in the short-term and reassessing the VAT position on pure juices and smoothies could be part of the answer.
When Innocent Drinks and the British Soft Drinks Association (BSDA) showed me what they thought would happen by reducing VAT on pure juices and smoothies, I said I was more than happy to help encourage a discussion in Westminster.
According to figures, a reduction to 5% VAT on juices and smoothies could lead to an extra billion portions of fruit being eaten in the UK each year.
The Treasury has to weigh up the cost and benefit of hundreds of fiscal proposals such as this one every year. But this is one common sense proposal that the Treasury should look to implement.
Beyond the fiscal consideration, this campaign presents a good opportunity for businesses and government to act together in the interest of consumers and public health. The savings from a reduced 5% VAT level will have to be passed on fully to consumers, and the BSDA, together with retailers, will need to lead on compliance. In turn, the government needs to accept this offers good value for the nation.
Where fruit is concerned, the 'mode' of consumption should not be the primary concern. What is more important is that we get eat more fruit.
And if juices and smoothies represent the convenient and culturally commonplace way to do that so be it. An out-of-date tax rule should not be getting in the way of this.
Dozens of MPs from all political parties have signed up to support the campaign and 12,000 people have already signed an online petition.
By combining public education with consistent fiscal measures, I believe we have the best chance of enabling real behavioural change and a healthier Britain.n
Tom Watson, MP for West Bromwich East