£520m tax on sugary drinks to fund sports in British schools
George Osborne has unveiled a new sugary drinks tax but stopped short of raising fuel duty as he blamed the "dangerous" global economic situation for derailing his fiscal plans.
Delivering one of his most difficult Budgets yet, the Chancellor was forced to admit that government debt will rise as a proportion of GDP this year and growth forecasts have been sharply revised down.
But he insisted the UK was "well placed" to handle the worldwide slowdown and the deficit would still be wiped out by 2019-20 - thanks in part to another £3.5bn of spending cuts.
Mr Osborne argued it had saved the country hundreds of millions of pounds and prevented the next generation being "burdened".
He insisted the policies meant he was able to give tax cuts for millions of hard-working families - with the personal allowance rising to £11,500 next year and the higher 40p rate going up to £45,000.
Fuel duty will be frozen for the sixth year in a row after he defied expectations of an inflation-linked rise and beer duty has also been put on hold, while corporation tax will fall to 17pc by 2020 and there will be tax incentives for smaller businesses.
However, a 0.5pc increase to insurance premium tax will generate £700m to boost flood defences and, in the wake of the Google tax bill row, there will be a fresh £12bn crackdown on tax dodging by firms and individuals.
The most eye-catching news was the introduction of a sugar tax by 2018, which will see companies charged based on the level of sugar in their products. The £520m due to be raised will be used to help support school sport, he said.
Shares in listed drinks firms dropped sharply in London after the announcement.
Celebrity chef Jamie Oliver welcomed the revelation, telling fellow campaigners: "We did it!"
The celebrity chef and health campaigner took to Twitter and Instagram to praise the move.
On Instagram, Oliver said: "We did it guys !! we did it !!! A sugar levy on sugary sweetened drinks ...... A profound move that will ripple around the world ....business can not come between our Kids health !!
"Our kids health comes first ..... Bold, brave , logical and supported by all the right people....now bring on the whole strategy soon to come ... Amazing news."
Labour leader Jeremy Corbyn described Mr Osborne's Budget as the culmination of "six years of his failures" and said it had "unfairness at its very core".