Health leaders say a sugar tax on soft drinks will save money by helping tackle child obesity rates.

The Obesity Health Alliance said the tax would reduce the future health burden on the NHS caused by obesity-related illnesses such as diabetes and heart disease. 

The alliance, which is a coalition of more than 30 charities including British Heart Foundation, was responding to a study which suggests the tax could result in thousands of job losses.

The study, by Oxford Economics on behalf of the British Soft Drinks Association, reports that the hospitality industry and smaller retailers will be hit hardest.

Read more: Public health experts in Glasgow welcome launch of sugar-free Irn Bru

The proposed sugar tax on drinks such as Coca-Cola, Pepsi and Red Bull will come into force from 2018.

Retail groups and a number of businesses have joined a campaign against the tax.

Gavin Partington, director-general of the British Soft Drinks Association, which is providing funding for the campaign, said: “We absolutely agree with the government that obesity levels are too high and action is needed, but burdening businesses and consumers with an ineffective tax is not the answer.

“We know from the evidence around the world where they’ve tried a tax that it will not make a difference to obesity. What it will do, as this report shows, is damage thousands of businesses across the entire soft drinks supply chain, from farmers to manufacturers, to convenience stores and the pub and restaurant trade.”

In a joint statement the Obesity Health Alliance, a coalition of over 30 charities, including Diabetes UK, British Heart Foundation and Cancer

Research UK, medical royal colleges and campaign groups, said: “The soft drinks industry levy will save money tomorrow by helping to tackle children’s obesity today.

Read more: Public health experts in Glasgow welcome launch of sugar-free Irn Bru

“Sugary soft drinks have no nutritional value and are the single biggest contributor to a child’s sugar intake, and high consumption of sugar is one of the factors fuelling the obesity crisis.

“A third of children are overweight or obese by the time they leave primary school, putting them at a greater risk of serious health conditions later in life such as Type 2 diabetes, cancer, heart and liver disease and associated mental health problems.

“These conditions place an immense toll on our nation’s health and our already-stretched health service. The levy has huge potential help tackle obesity and save the NHS money.”