George Osborne announces new sugar tax on soft drinks manufacturers

Chancellor George Osborne has announced a new sugar tax on soft drinks manufacturers as part of an effort to tackle childhood obesity.

The soft drinks industry will be taxed based on the amount of sugar-sweetened drinks produced.

The tax will not apply to fruit juices or milk-based drinks. There will be two bands: one for total sugar content above 5 grams per 100ml, and a higher band for the most sugary drinks containing over 8 grams per 100ml.

It will be introduced in two years’ time and is expected to raise around £520 million a year. The money will go towards increasing funding for sport in primary schools.

Announcing the new sugar tax, 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’.”

Osborne said that 5 year old children are consuming their body-weight in sugar on an annual basis, adding that experts forecast that within a generation over half of boys and 70% of girls could either be overweight or obese.

Mr Osborne told MPs: ‘Obesity drives disease. It increases the risk of cancer, diabetes and heart disease – and it costs our economy £27 billion a year; that’s more than half the entire NHS pay bill.

‘One of the biggest contributors to childhood obesity is sugary drinks. A can of cola typically has nine teaspoons of sugar in it. Some popular drinks have as many as 13. That can be more than double a child’s recommended added sugar intake.’

Mr Osborne added: ‘We’re introducing the levy on the industry which means they can reduce the sugar content of their products – as many already do. It means they can promote low-sugar or no sugar brands – as many already are. They can take these perfectly reasonable steps to help with children’s health.

‘Of course, some may choose to pass the price onto consumers and that will be their decision, and this would have an impact on consumption too. We understand that tax affects behaviour. So let’s tax the things we want to reduce, not the things we want to encourage.’

The Conservative party was previously hesitant to introduce a levy on drinks with added sugar.

Tory MP Will Quince told the Commons in January that such a levy would be “illiberal and patronising – in my view, nanny statism at its worst”.

However, the policy change has been welcomed by the Labour party and those who have campaigned for a tax on sugary drinks.

Chef Jamie Oliver, among those who have pushed for a sugar tax, said that Osborne’s announcement was ‘amazing news’.

He posted the following message on Instagram:

‘We did it guys !! We did it !!! A sugar levy on sugary sweetened drinks … A profound move that will ripple around the world … business cannot come between our kids health !! Our kids health comes first … Bold, brave, logical and supported by all the right people … now bring on the whole strategy soon to come … Amazing news.’