In England, about one in four adults is living with obesity,

Chapter 1

In England, about one in four adults is living with obesity, and that brings big costs: to people's health, to the NHS and to the wider economy through lost work. Cheap, very calorie-dense foods are a big part of that story. The question here is whether putting a tax on some of these "unhealthy" foods would help - and what the downsides might be.

We've used similar tools before. When it became clear how harmful smoking was, governments didn't just run information campaigns, they also put high taxes on cigarettes and restricted advertising and where you can smoke. The idea was that the retail price should reflect some of the wider costs to health services and society, and higher prices would discourage some people from smoking. Economically, a tax on unhealthy foods is based on the same principle: when private choices create wider costs that everyone pays, there may be a case for changing prices.

How a food tax could help

Economists usually think about three broad tools: giving people information, nudging them with incentives, and changing rules or prices through regulation and taxes. Labels and education matter, but in practice they're easy to ignore when you're tired, rushed, or on a tight budget. There's also a subtler problem: even when people know something is unhealthy, they find it hard to act on that in the moment. We tend to undervalue costs that arrive years down the line - the hospital visit, the diabetes diagnosis - compared to the pleasure of eating something now. A higher price today makes that future cost feel a bit more real. Prices are much harder to ignore at the checkout, so taxes and subsidies can be powerful.

If certain products are clearly contributing to obesity and future NHS costs, making them a bit more expensive can have two effects. First, it discourages some people from buying as much of them, so there is less harm in the first place. Second, if the tax money is used well, it can help pay for some of the extra pressure on health services. There is good evidence that people do respond to these kinds of incentives: in the UK, for example, the levy on sugary soft drinks pushed companies to cut the sugar in many products, and research shows that the amount of sugar people get from soft drinks has fallen since it was introduced, especially for children.

We see similar patterns elsewhere. In experiments where supermarkets made fruit and vegetables cheaper, people put more of them in their baskets. In one real-world programme in South Africa, a health insurer offered cash-back on healthier food purchases; households that signed up bought more fruit, vegetables and wholegrains and less food high in sugar, salt and fat. That suggests price incentives can shift diets in a healthier direction, not just in theory but in practice.