Budget 2016: Oliver hails tax on high sugar drinks

Sugary drinks were in the Chancellor's firing line today

George Osborne promised the £520m a year raised by the levy would provide extra money for school sport, lengthen the school day to give pupils more chances to do activities and to offer more breakfast clubs.

But critics argued Mr Osborne was now embracing the argument that higher costs help cut consumption which, as part of the Coalition, he rejected in the case of minimum alcohol pricing.

Just weeks ago the Government appeared to have delayed a decision on the contentious idea of a sugar tax until the summer but the Chancellor surprised MPs by going ahead with the proposal in his Budget.

He told MPs the measure was needed to improve the health of children and reduce the risk of the NHS becoming overwhelmed by conditions linked to excess sugar consumption which are already costing the health service £27 billion a year.

Mr Osborne said: “I am not prepared to look back at my time here in this Parliament, doing this job and say to my children’s generation, ‘I’m sorry. We knew there was a problem with sugary drinks. We knew it caused disease. But we ducked the difficult decisions and we did nothing’.”

Celebrity chef Jamie Oliver, who has led the campaign for action on sugary drinks, described the announcement as a “profound move that will ripple around the world”.

The tax means manufacturers of drinks with 5g of sugar per 100ml and more than 8g per 100ml will face a tax.

The Chancellor said companies would have to decide whether to pass on the cost to consumers but if they did that would help reduce sales of high-sugar drinks.

Health campaigners argued the levy will have failed if it does not force prices up.

Chris Askew, chief executive of Diabetes UK, said the tax “should not be absorbed by the soft drinks industry”.

He added: “Prices need to change, otherwise there will be no impact on the health of nation.”

But Mr Osborne faced an instant backlash from the soft drinks industry and tax campaigners.

Food and Drink Federation director general Ian Wright said: “For nearly a year we have waited for a holistic strategy to tackle obesity. What we’ve got today instead is a piece of political theatre.

“The imposition of this tax will, sadly, result in less innovation and product reformulation, and for some manufacturers is certain to cost jobs. Nor will it make a difference to obesity.”

British Soft Drinks Association director general Gavin Partington said: “We are extremely disappointed by the Government’s decision to hit the only category in the food and drink sector which has consistently reduced sugar intake in recent years - down 13.6 per cent since 2012.

Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: “It is ludicrous that the Chancellor decided to cave in to the demands of the High Priest of the Nanny State in the public health lobby and introduce a hugely regressive and entirely ineffective sugar tax.

“This will hit the poorest families hardest and all the evidence shows it simply won’t work.”