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Chancellor stands by new policy

Sugar tax challenge? ‘Bring it on’, says Osborne

Irn-Bru commonwealthChancellor George Osborne today stood his ground on plans to introduce a sugar tax and warned drinks companies that he would “robustly” defend it.

Questioned about speculation that soft drinks manufacturers were planning a legal challenge against the proposal, he told the Treasury Select Committee the government was determined to press ahead.

“I would say, if they want to have an argument about the sugar tax, bring it on.

“We are going to introduce a sugar tax, it’s not a threat or a promise, it’s the way it’s going to be.”

The new tax was announced in the Budget and is expected to raise around £520 million in its first year by adding 24p a litre to soft drinks with the highest sugar content. It is designed to combat childhood obesity.

Mr Osborne today told MPs that the drinks companies would do better reformulating their products ahead of the implementation of the tax in 2018, rather than launching a legal challenge.

The announcement led to sharp falls in the shares in drinks companies such as Britvic, AG Barr and Nichols.

They are thought to be planning action through the European courts by arguing the policy is discriminatory because some drinks with a higher sugar content, such as fruit juices and milk shakes, are exempt from the new tax.

The proposal won support from health organisation and the celebrity chef Jamie Oliver who has campaigned for it.

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