George Osborne backs sugar tax and £3.5bn of Whitehall cuts

Chancellor gives go-ahead to Jamie Oliver initiative, while Office for Budget Responsibility says economy has been dealt permanent blow by 2008-09 crisis

George Osborne has placed a tax on sugary drinks at the centre of his budget, as he sought to mask a significant downgrade to Britain's economic potential with a flurry of initiatives and giveaways to small businesses, motorists and savers.

Delivering his final budget before voters decide whether Britain should remain a member of the European Union on 23 June, the chancellor said he would seek to "put the next generation first" and introduced a proposal for a sugar levy that was welcomed by TV chef and food campaigner Jamie Oliver.

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