UK Office for Budget Responsibility considers imposing a tax on sugary drinks and sugar-laden foods aiming to reduce obesity levels. However, industry bodies have warned that this may have dramatic impact on job losses.

Sugar tax: MPs support the new duty, but would it stop obesity crisis?

The Chancellor outlined initial proposals for a two-tier tax on all producers and importers of drinks that have more than five grammes of sugar per 100 millilitres, or eight grammes at the higher rate.

Pure fruit juices and smaller producers will be excluded.

“The Sugar Tax” will be introduced in two years’ time. The Office for Budget Responsibility estimates the tax will raise £520m in its first year, which Osborne said would be used for a range of initiatives targeting children’s health and education.

The funds will pay for a doubling of the primary school physical education and sport premium and also provide annual funding for schools to fund optional out-of-hours extra-curricular activities.

According to official figures, one in ten children in England are obese when they start primary school, rising to two in ten by the time they leave, and that this is translating to higher rates among adults.

Obesity-related diseases are estimated to cost the NHS £5bn a year, while the economy loses amount as much as £28bn.

The tax has been strongly opposed by the Prime Minister David Cameron.

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Jamie Oliver welcomes ‘bold and brave’ tax on sugary drinks

“We did it guys !! we did it !!!” tweeted celebrity chef Jamie Oliver, the long-time lobbyist for such a tax and an avid promoter of healthier school lunches.

Health campaigners and charities welcome the new tax.

Chris Askew, the chief executive of Diabetes UK, said: “It is really promising news that the government has announced a tax on the soft drinks industry. We have been campaigning for this measure as we are all consuming too much sugar.”

NHS England chief executive Simon Stevens welcomed the move. “This bold and welcome action will send a powerful signal and incentivise soft drinks companies to act on the health consequences of their products,” he said.

Even Labour leader Jeremy Corbyn praised the new tax, noted The Evening Standard.

Taxes on foods have been shown to have a demonstrably positive effect on public health, however, the UK Food and Drink Federation has expressed concerns that legislation could impact jobs. In an interview with BBC, Federation’s CEO David Thomson said the new tax could cause a negative impact at manufacturing industry and affect as much as 19 percent of jobs.

Although the idea of a sugar tax in the UK is new, taxes on sugary foods and sugar-rich drinks have been in place both in Finland and Hungary since 2011.

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