In October 2013, the Mexican Congress did the unthinkable. They passed a peso-per-litre tax on sugared beverages, as well as a similar tax on junk food. This, in a country where some counties still don’t have potable water and where the poverty rate is 52%. Last week, the Mexican Congress did something even more unthinkable. They gutted their tax, cutting it by half. This, despite soda tax revenues that topped $19bn a year, and despite a diabetes prevalence rate of 12% compared with the US rate of 9.3%.

The tax caused sugary drink consumption in Mexico to drop 6%. The Instituto Nacional de Salud Publica (the public health officials) called this a success; Hacienda (the treasury department) called it a failure. Why did they gut the tax when it provided revenue to a cash-strapped exchequer?

ANPRAC, the Mexican Beverage Association, argued that the tax cost 1,700 jobs. But studies show that sugared beverages contribute to the death of 24,000 Mexicans each year, and cause disability such as heart disease, stroke, kidney failure, amputation, and tooth decay in tens of thousands more. Furthermore, the tax was passed with the promise that the money collected would be diverted to improve the Mexican water supply, but instead it just filled general coffers. The poor paid in, and got nothing back.

The world is watching Mexico’s every move, as many governments consider imposing a similar tax. Despite Public Health England and Jamie Oliver advocating for a sugar tax, David Cameron has declared his opposition. He thinks there are “more effective ways” of tackling obesity than taxing sugar. If he thinks this problem is about calories, it’s not. If he thinks it’s about obesity, it’s not. It’s about type 2 diabetes. The prevalence of diabetes in the UK is 5.4%; lower than the US or Mexico. Yet the NHS spends £14bn a year on diabetes and its complications, never mind the other diseases attributable to soda consumption.

Epidemiologic studies demonstrate that increasing dietary sugar consumption increases diabetes risk and prevalence worldwide, while clinical studies show that markers for metabolic health deteriorate with increasing sugar in the diet. However, these studies are all confounded by the inherent calories in sugar. Is sugar dangerous because it’s calories? Or because it’s sugar?

Jamie Oliver at the House of Commons, as part of his Sugar Rush campaign. Photograph: Dominic Lipinski/PA

Here at the University of California, we’ve attacked this problem head-on. Tuesday marks the release – in the journal Obesity – of our study, which dissociates the metabolic effects of dietary sugar from its calories and weight gain. Instead of giving added sugar to adults to see if they got sick, we took the added sugar away from 43 obese children who were already sick, to see if they got well. But if they lost weight, critics would argue that the drop in calories or the loss in weight was the reason for their improvement. Therefore, the study was “isocaloric”; that is, we gave back the same number of calories in starch as we took away in sugar, to make sure they maintained their weight.

For nine days we catered their meals to provide the same fat, protein, and total carbohydrate content as their home diet; but within the carbohydrate fraction we took the added sugar out and substituted starch. We took the pastries out, we put the bagels in; we took the yoghurt out, we put the baked potato chips in; we took chicken teriyaki out, we put turkey hot dogs in. We gave them processed food – kid food – but “no added sugar” food. We reduced their sugar consumption from 28% to 10% of their calories. They weighed themselves every day; if they were losing weight, we told them to eat more.

We were astonished at the results. Diastolic blood pressure decreased by five points. Blood fat levels dropped precipitously. Fasting glucose decreased by five points, glucose tolerance improved markedly, insulin levels fell by 50%. In other words we reversed their metabolic disease in just 10 days, even while eating processed food, by just removing the added sugar and substituting starch, and without changing calories or weight. Can you imagine how much healthier they would have been if we hadn’t given them the starch?

This study establishes that all calories are not the same (“a calorie is not a calorie”); substituting starch for sugar improved these children’s metabolic health unrelated to calories or weight gain. While this study does not prove that sugar is the sole cause of metabolic disease, it clearly demonstrates it is a modifiable one.

The WHO advises cutting our sugar consumption to stop diabetes. Almost half of our daily consumption is in sugared beverages. The “iron law” of public health states that reducing the availability of a substance reduces its consumption, which reduces health harms. Taxation reduces “effective availability”, and is easy to implement. Some say this is a regressive tax: the poor suffer more. But type 2 diabetes is a regressive disease, and the poor already suffer more. Taxation has worked to control tobacco and alcohol. And taxation of soda worked in Mexico until its treasury caved in to pressure from industry.

Mexico’s loss could be Britain’s gain – if Cameron learns a little nutritional science, and accepts that there are more lives and money at stake than there are people who might lose their job.