Budget, Brexit, bacon and beyond

Scientists have proposed a "red meat" tax, which they say could prevent almost 6,000 deaths per year. The UK Government has form in this area, having implemented a sugar tax earlier this year. 

The difference here is that the sugar tax is intended to change the behaviour of major manufacturers, who can reduce the level of sugar in the drinks they sell. There is not, however, any way to make your steak any less "steak-y". The only potential change in behaviour would be for the end user to simply eat less red meat - a win for the NHS and the environment but not for those close to the poverty line.

Headlines like these make us question the role of taxes in our society. It is of course the way we raise funds to pay for our schools, hospitals and roads, but it is also a key driver in behaviour. In many situations, they work; a number of manufacturers reduced the sugar content in their drinks before the levy even came into effect. However, an increase in tax payable by the end user (essentially a VAT hike), always hits the poorest the hardest and tends not to change the behaviour of those who can afford it.

So how far can this behaviour-shaping go? Do we tax items used in high risk sports to fund the cost to the NHS of treating the inevitable injuries? Do we decrease income tax on savings and dividends to encourage people to save and invest?

This is precisely the issue that faces every chancellor leading up to Budget day; how do we manage the behaviour of individuals and corporates while still ensuring the tax take funds our needs for the coming year? It will be particularly interesting to see how this changes in the face of Brexit. We will need to continue to attract talent and business to the UK (and retain it) but must also maintain cross-border relationships and negotiate a significant number of trade deals. Perhaps we start with hosting a BBQ.