Budget 2016: George Osborne announces sugar tax on soft drinks industry

The £520m raised will be spent on school sports

George Osborne has announced a sugar tax on the soft drinks industry as part of the 2016 Budget.

Soft drinks manufacturers will be taxed according to the volume of the sugar-sweetened drinks they produce or import.

Drinks will fall into two bands: one for total sugar content above 5g per 100ml, and a second, higher band for the most sugary drinks with more than 8g per 100ml.

The tax will come into force in two year's time in order to give companies time to change the ingredients of their products.

The measure will raise an estimated £520million a year, and will be spent on doubling funding for sport in primary schools. Secondary schools will meanwhile be encouraged to offer more sport as part of longer school days.

Pure fruit juices and milk-based drinks will be excluded, as well as small producers.

As he announced the measure, Mr Osborne cited the fact that 5-year-old children are consuming their bodyweight in sugar every year, and experts predict that within a generation more than half of all boys and 70 per cent of girls could be overweight or obese.

He 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'.”

The tax comes after campaigners pushed for a levy on sugar to cut obesity rates.

Chef Jamie Oliver, who has also campaigned for quality school dinners, was among those to welcome the tax.

Malcolm Clark, co-ordinator of the Children’s Food Campaign, told The Independent: "This is a really important victory for children’s health. Not only will this tax on sugary drinks encourage people to shift towards healthier drinks, but it sends out a wider message about our need to cut down on sugar, and for businesses to reduce the sugar in their products."

"The Chancellor has taken a bold step in what we hope will be a key pillar of the Government’s forthcoming Childhood Obesity Strategy.

But he stressed that more needs to be done: "On its own, a sugary drinks tax won’t solve the UK’s childhood obesity crisis, which is why it needs to be coupled with robust restrictions on unhealthy food marketing online and across all forms of media, including a 9pm watershed for TV advertising of junk food, alongside a series of other measures on reformulation, labelling and the provision of healthier, more sustainable food in our communities."

The tax falls short of recent calls from the The National Obesity Forum for a 50 per cent tax on sugar to dramatically change what people eat, after Public Health England previously proposed a 20 per cent rate.

Professor Graham MacGregor, Chair of Action on Sugar commented: "We are delighted to see in today’s budget announcement that the government will be introducing a new sugar levy on soft drinks which will be used to double the funding they dedicate to sport in every primary school.

"However, for this to be effective it’s imperative that the levy is at least 20 per cent on all sugar-sweetened soft drinks and confectionary and escalate thereafter if companies do not comply to reformulation targets – and this must be implemented immediately.

"The country is still eagerly awaiting for David Cameron to announce his long over due childhood obesity strategy and he now has a unique opportunity to produce a coherent, structured evidence-based plan based on our six key recommendations, which includes food and drink reformulation, to prevent obesity, type 2 diabetes and tooth decay."