Subsidising the fat is no way to slim the UK

 
Jamie Whyte
DAVID Cameron is worried about how much fat people are costing his government. “Look at America, how bad things have got there” he implored a Five News reporter only last week. “What happens if we don’t do anything? Yes, that should be a wake-up call.”

What he thinks we should do – or, at least, not rule out doing – is raise tax on all fattening food in the UK. The Danish now tax food that contains more than 2.3 per cent saturated fat. Cameron hopes that something similar over here might help to reduce obesity in Britain and the terrible cost it imposes on the NHS.

To see where Cameron has gone wrong, start by asking how many people should be fat. The answer is not none.

Being fat is costly. It can make you less attractive, less energetic and more likely to become ill. You have to pay for all the food too. But these costs are incurred for the sake of a benefit: namely, the pleasure of eating. If you value that pleasure higher than you disvalue the costs, not only will you be fat, you will be better off fat. Provided being fat is neither taxed nor subsidised, so long as no one is forced to be thin or encouraged to pig out, the right number of fat people in the world is the actual number.

Alas, obesity is currently subsidised in Britain. Because Cameron’s beloved NHS does not charge patients for their medical care, obese people do not pay the full cost of their choice. The cost of their treatment is spread across all taxpayers, fat and thin alike. Indeed, the cost is disproportionately imposed on the thin, because the rich tend to be thinner than the poor and also pay more tax.

You might, especially if you are on the slimmer side, think this justifies Cameron’s proposed tax on fatty food; it is an attempt to claw back the subsidy provided by the NHS. In fact, it simply repeats the original mistake, because thin people also eat fatty food. This way of clawing back the NHS obesity subsidy continues to spread the cost across the entire population, with everyone who enjoys ice cream or pizza ending up footing the bill, only about 20 per cent of whom are actually obese. Indeed, a thin athlete who loads up her plate as part of a training regime could end up paying more than a fat couch-potato. Cameron’s proposal thus continues to subsidise obesity.

In a Big Society spirit of giving, I offer the Prime Minister two alternative approaches. The first is to tax obesity directly. It is not hard to tell who is fat. Doctors, employers, teachers and public-spirited neighbours could dob fat people in to the tax authorities, who would then add an obesity surcharge to their tax bills.

Or, if Cameron would prefer to avoid such unpleasantness, he could change the funding of the NHS. He could shift to an insurance-based system in which, as demanded by his socialist principles, the government still pays everyone’s premiums out of tax revenues – but only up to the cost of a policy for a slim person.

In this new system, the fat would have to bear the extra cost themselves, and those who felt the cost outweighed the benefits of indulgence would slim down. Then Cameron could avoid the absurdity of taxing butter, safe in the knowledge that everyone who is fat is adding to the sum total of happiness on Earth.

Jamie Whyte works for the consultancy Oliver Wyman. He is a senior fellow of the Cobden Centre.