Asked about the reaction of soft drink manufacturers, who have threatened legal action over government plans to introduce the levy at a higher and lower rate from 2018, Osborne made it clear that the government would not bow to industry pressure, and pointed out that some companies have already agreed to lower the sugar content.

‘Other companies are saying either this sugar tax isn't going to happen or they are going to challenge it in the courts. I would say, if they want to have an argument about the sugar tax, bring it on.

‘We are going to introduce a sugar tax. It's not a threat or a promise, it's the way it's going to be.

‘We took legal advice before introducing it and we are very clear it is legal and we will of course robustly defend it if there was a legal challenge,’ the Chancellor said.

"But I would say to companies 'Don't waste time and money on a legal challenge. Use this period to look at your products and see if you can reformulate'."

The session, held on the morning of 24 March, was devoted mainly to discussions around plans to close the deficit and how the Chancellor will plug the hole formed by the government’s U-turn on cutting disability payments.

Osborne also indicated the government has plans to enable the Bank of England to clamp down further on the buy-to-let housing market, saying it is, ‘highly likely that we will give the Financial Policy Committee powers over buy-to-let’.

The Chancellor told the committee that the Treasury’s analysis of the costs and benefits of EU membership will be published in the first half of April.