He warned that the Chancellor would be forced to find “genuinely big” tax rises or spending cuts if there was any further downgrade in the public finances.
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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”.
Chote said the chancellor had cut his planned limit on day-to-day departmental spending in 2019-20 by around 2 billion pounds (about 2.86 US dollars) and had made a further commitment to 2 billion pounds of new spending. But with Scotland about to receive power over income tax, Scottish ministers have indicated they think it is the wrong time for the break to be replicated north of the Border.
Personal tax allowance to rise to £11,500 from next year. Growth forecasts for every year up to 2020 have also been revised down.
Besides, growth forecasts were downgraded to 2.2 percent in 2017 (2.5 percent forecast in November) and 2.1 percent in each year after that. It will then be higher than predicted at £55.5 billion in 2016-17 and £38.8 billion in 2017-18, he said, citing the OBR. In Mexico a similar initiative saw consumption fall by 6 per cent after a 10 per cent tax was introduced. It will pay for a doubling of the primary school physical education and sport premium and provide annual funding of £285m for schools to fund optional out-of-hours extra-curricular activities. It will be up to the devolved nations to decide how the cash is used.
The tax will be levied on the volume of the sugar-sweetened drinks companies produce or import, but the Chancellor said it would be up to the companies to decide whether to absorb the cost or pass it on to consumers.
The sugary drink tax will be introduced in the next two years, but pure fruit juices and milk-based drinks are exempt. But the highest tax will hit popular fizzy drinks such as Pepsi, Coca-Cola and 7up.
In the Budget, George Osborne slashed the top gains tax rate on most types of investment to 20 per cent, but kept the charge on carried interest for private equity at the higher level.
This was welcomed by a number of charities although Stephen Timms MP, Labour’s faith envoy, told Christian Today: “We have gone backwards very significantly on rough sleeping under this government so the acknowledgement we need to do something about it is rather late but it is welcome”.
Beer, cider and spirits are also to have their duties frozen, but cigarettes and wine are to become more expensive as they’re not included in the exemption.
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Shares in listed drinks firms dropped sharply on the London market after the sugar tax announcement.
