Steep rises in alcohol duties, with the tax on spirits increasing for the first time in a decade, were announced by Alistair Darling as the Government attempts to curb levels of binge-drinking and collect extra revenue for the Treasury.
The move – which raises an additional £1.53bn over the next three years – was welcomed by doctors' leaders. But brewers warned that the moves would accelerate the closure of pubs as drinkers opted to consume more alcohol at home.
The Chancellor increased taxes on alcohol by 6 per cent above inflation, raising the price of a 70cl bottle of spirits by 55p. He put 4p on a pint of beer, 3p on a litre of still cider, 14p on a bottle of cider, 14p on a bottle of wine and 18p on a bottle of sparkling wine. The increases come into effect on Sunday.
Mr Darling also said alcohol duties would increase by 2 per cent above inflation for each of the next four years.
Tax in spirits had been frozen since 1997 when Labour came to power, with Gordon Brown sensitive to the fortunes of the Scottish whisky industry.
Treasury sources insisted the move was not linked to the prominence of drunken hooliganism in the political agenda, but aimed at correcting the fall in real prices of alcohol in recent years. Mr Darling told MPs: "As incomes have risen, alcohol has become more affordable. In 1997 the average bottle of wine bought in a supermarket was £4.45 in today's prices. If you go into a supermarket today, the average bottle of wine will cost about £4."
However, the increase comes as the Government studies alcohol consumption and levels of binge-drinking in the wake of the licensing shake-up of 2005 which allowed pubs, clubs and bars to open 24 hours.
According to some analysts, a 10 per cent increase in the cost of alcohol will lead to a 10 per cent fall in consumption. Don Shenker, the acting chief executive of Alcohol Concern, said: "Over the past 20 years, as drinks have become cheaper, consumption has skyrocketed. Urgent action has been long overdue to reverse the tide. For moderate tax hikes to work, government must also force the big retailers to stop discounting drinks so deeply."
Vivienne Nathanson, the head of science and ethics at the British Medical Association, said: "It is very important that tax increases on alcohol are part of a larger plan to reduce problem drinking. The evidence tells us that the cheaper and more accessible alcohol is, the more people will drink."
Both the Tories and Liberal Democrats have called for targeted increases on alcohol designed to combat binge-drinking. But Rob Hayward, the chief executive of the British Beer & Pub Association, accused Mr Darling of punishing all beer drinkers. He added: "By aiming a tax hike at beer, the Chancellor is shooting himself in the foot. Treasury revenues will continue to fall, pubs will continue to close and beer sales sink further."
The Campaign for Real Ale (Camra) said the increase on beer would encourage smuggling and cross-border shopping. Mike Benner, its chief executive, said: "It is a great big nail whacked ruthlessly into the coffin of the British pub."
Jeremy Beadles, the chief executive of the Wine and Spirit Trade Association, said the rises were bizarre at a time when many families were "feeling the pinch". He protested: "British consumers will now pay more tax on wine than anyone else in the European Union."
The Scotch Whisky Association denounced the Chancellor's "punitive" increase in duty on their product, claiming tax now represented up to 75 per cent of the cost of a bottle of whisky.
The duty on tobacco also rose yesterday, adding 11p to the cost of a packet of 20 cigarettes and 4p to the price of five cigars. But the 5 per cent reduced rate of VAT on products designed to help smokers kick the habit will be retained beyond 30 June.
'A sneaky way to get more money' - Nick Bray, 43
Nick Bray, a television producer in Glasgow, drinks alcohol about five nights a week and usually goes to the pub twice a week. He says the extra duty on alcohol is simply an excuse to squeeze more money out of the consumer, and it will have no bearing on his drinking.
"They know people are always going to spend money on booze and see drinkers as an easy target," he said. "They tell us it's to cut down on binge-drinking but an extra 4p on a pint isn't going to put anyone off buying it.
"A good bottle of Scotch cost about £30, so an extra 55p certainly won't stop me buying it. I suppose I'll be spending a bit more on drink than I would normally, but I'm not the type of person who counts pennies anyway."