Wednesday 10 February 2016 12:01 am

Westminster goes to war on sugary drinks tax as Tory-linked think tanks take opposing views on new levy

Policy experts with strong ties to the Conservative party are at odds over proposals for a new sugary drinks tax, with one influential think tank saying today that the new levy should be introduced as part of a series of measures to curb rising levels of obesity.

In a new report out today, Policy Exchange – which has been called Prime Minister David Cameron's "favourite think tank" – says that while a sugary drinks tax is "not a magic bullet" it is "on balance a sensible intervention to help prevent the rise in obesity, especially among children".

The Policy Exchange report was authored by Olympic gold medallist James Cracknell, who stood as a Conservative candidate for European Parliament in 2014.

Cracknell said that revenues raised through the new sugary drinks tax should be spent on preventing, rather than treating, obesity.

In the report, Cracknell pointed to evidence in the British Medical Journal which found that sales of sugar-sweetened drinks in Mexico fell by 12 per cent in the first year of a sugary drinks tax in that country.

Free-market groups favoured by Thatcherites, meanwhile, have strongly objected to proposals for the tax. Christopher Snowdon from the Institute of Economic Affairs (IEA) said last month: "Putting a tax on sugary drinks won't make us thinner, it will make us poorer.

"Aside from the tax being regressive and clobbering the poor, there is scant evidence such a measure has reduced obesity anywhere in the world. In Denmark a disastrous fat tax was quickly repealed after living costs increased and obesity levels were largely unchanged, whilst in Mexico a sugary drinks levy has reduced average calorie intake by just six calories per day.

"Instead of targeting one particular ingredient and product, the focus should be on educating society about what constitutes a balanced diet and allowing individuals to take responsibility for their own health."

Big businesses and retailers have also raised concerns about the new tax.

Health secretary Jeremy Hunt said over the weekend that the government is still considering imposing the new tax, telling the BBC's Andrew Marr: "David Cameron has said that if it isn't a sugar tax then it needs to be something equally robust, but he has not taken a sugar tax off the table."

Cameron first hinted at backing the new tax last month, telling reporters he would not be "in the business of ruling things out" when it comes to tackling obesity.

Cameron said in early January that while he would like to avoid imposing any new taxes, the government needed to act in the best interests of public health.

"I don't really want to put new taxes on to anything but we do have to recognise that we face potentially in Britain something of an obesity crisis when we look at the effect of obesity on not just diabetes but the effect on heart disease, potentially on cancer," Cameron said.

"Now, of course, it would be far better if we could make progress on all these issues without having to resort to taxes, that would be my intention but what matters is we do make progress.

"We shouldn't be in the business of ruling things out but obviously putting extra taxes on things is not something I aim to do, it's something I would rather avoid."

Cameron's comments came on the same day as a new Cancer Research UK report estimating that rising levels of obesity could lead to around 700,000 new cases of cancer in the next 20 years.