Press release – Government faces legal challenge on £90 million subsidy for cheap sugar

The government is being forced to defend a new trade measure which will flood the country with cheap sugar – using taxpayers’ money to undermine its commitments on climate and public health.

Legal proceedings have been threatened against the government by charity Foodrise over its decision to substantially increase the raw sugar cane Autonomous Tariff Quota (ATQ). This is a trade measure that allows raw cane sugar to be imported into the UK tariff-free and amounts to a £90 million yearly tax break [1] – which could instead pay for more than 35 million free school meals [2].

This tax break on sugar imports came into force on 1st January and is not due to end until December 2033. The announcement stands in stark contrast to the government’s recent strengthening of the soft drinks industry levy, which was widely welcomed as a public health measure.

Foodrise has put the Department of Business and Trade on notice of this potential legal action, which seeks the Government to reverse its reckless decision to increase the subsidy from 260,000 to 325,000 tonnes of raw sugar cane imports.

The charity, which works to transform the food system, is calling on Peter Kyle MP, the Secretary of State for Business and Trade, and Chancellor Rachel Reeves MP, to reverse the ATQ increases. If they refuse, then Foodrise plans to bring a claim for judicial review.

Tate & Lyle is the sole importer of raw sugar cane – which means this amounts to a £90million a year tax break to just one company.

The letter is a formal legal warning sent before court proceedings begin. Foodrise has argued that in renewing the ATQ the government has failed to take into account both its climate and public health commitments, to the detriment of domestic legislation and the UK’s international obligations. Foodrise highlights the lack of an environmental impact assessment and failure to assess the impacts of the policy decision on groups particularly vulnerable to health conditions caused by over consumption of sugar.

Sugar supply is already nearly three times greater than the maximum safe limit for population consumption in the UK, with enough domestic supply from British sugar beet farmers to meet the population’s recommended daily allowance.

Since the ATQ was introduced, Brazil has become the UK’s dominant supplier of raw cane sugar. Foodrise has outlined its concerns to the government over the environmental impact of Brazilian sugar consumption, including water use, soil erosion and deforestation of the Amazon and Atlantic Forests. Additionally, imported sugar cane has a far higher impact than British grown beet driven by emissions from its transportation.

The overconsumption of sugar contributes to major public health challenges including obesity, tooth decay, type 2 diabetes, and hypertension. On average, hospitals in England perform 83 decay-related tooth extraction operations each day on children and teenagers, costing the NHS £45.8 million per year [2]. This is equivalent to half of the £90million yearly subsidy to enable more sugar to flood into the country.

Natasha Hurley, Deputy Director at Foodrise, said:

“The decision to subsidise more sugar coming into the country is absolutely nonsensical for so many reasons, including that we already have an oversupply purely from sugar beet grown in this country. Any decision on trade by the government should prioritise the country’s health, support British farmers and properly – and transparently – consider environmental impacts. The sign off to substantially increase the ATQ on raw cane sugar imports falls way short on all three, which is why the decision must be reversed and quickly.”

Rowan Smith, solicitor at Leigh Day, said:

“Foodrise is concerned about the potential unlawfulness of the Autonomous Tariff Quota. They believe important considerations about climate change impact and worsening public health appear not to have been properly taken into account and hope that this letter prompts the Secretary of State to look at this issue again.”

Dr Kawther Hashem, Head of Research and Impact at Action on Sugar, said:

“It is astonishing that the government has introduced a trade measure allowing raw cane sugar to be imported into the UK tariff-free, which effectively equates to handing out a £90 million annual tax break. That money could fund 35 million free school meals instead. At a time when families are struggling, the last thing we need is another tax giveaway to companies importing sugar we simply do not need. As a country, we already consume at least twice the recommended maximum amount of sugar, contributing to rising rates of childhood obesity and tooth decay.”

ENDS

References

[1] Imports of raw cane sugar would cost £28 per 100kg outside of the tariff-free quota, so the full 320,000 tonnes tariff-free saves them £89,600,000: https://www.gov.uk/government/consultations/review-of-the-uks-raw-cane-sugar-atq-and-related-considerations/raw-cane-sugar-autonomous-tariff-quotas-atqs-public-consultation-information

[2] Institutions receive funding at a rate equivalent to £2.53 per student per meal: [Withdrawn] Free meals in further education funded institutions guide: 2023 to 2024 academic year – GOV.UK

[3] Short statistical commentary for hospital tooth extractions in 0 to 19 year olds 2024 – GOV.UK