UK gets sugar tax in budget

AAP
MARCH 17, 2016
British finance minister George Osborne has unveiled a new sugary drinks tax to fight childhood obesity, as he blamed a “dangerous cocktail” of risks from the global economy for derailing his fiscal plans.
The independent Office for Budget Responsibility upgraded borrowing forecasts by a total of STG56 billion ($A106.35 billion) over the coming five years, forcing the chancellor to announce an additional STG3.5 billion in spending cuts to keep alive his hope of hitting his target of getting the nation’s books into surplus by 2019.
Delivering one of his most difficult budgets yet, the chancellor on Wednesday was forced to admit that government debt will rise as a proportion of GDP this year – breaking a key rule he had set himself – and growth forecasts have been sharply revised down.
The deficit – the amount the government spends above what it takes in – is forecast to fall next year to 2.9 per cent, rather than the 2.5 per cent anticipated before.
Osborne insisted the UK was “well placed” to handle the worldwide slowdown and despite the turbulence, the government still expected to record a slightly larger overall surplus by 2019-20 than previously predicted, at STG10.4 billion.
Osborne also used his annual budget speech to issue a heartfelt appeal to the country not to vote to leave the European Union.
“I believe we should not put at risk all the hard work that the British people have done to make our country strong again,” he told parliament.
Osborne also directly quoted the OBR, which produces the government’s economic forecasts, to back up his case.
“A vote to leave in the forthcoming referendum could usher in an extended period of uncertainty regarding the precise terms of the UK’s future relationship with the EU,” he said.
But the most eye-catching news was the new tax on sweet drinks from 2018, which will see companies charged according to the level of sugar in their products
The STG520 million raised will be used to help support primary school sport.
The levy was welcomed by health campaigners, including chef Jamie Oliver – who tweeted the message “We did it!” to supporters – but sent shares in soft drinks companies tumbling on the stock exchange.