Darling's Budget to impose above-inflation rises on beer, wine and spirits to tackle alcohol abuse

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Indy Politics

Alistair Darling is preparing above-inflation price-rises for beer, wine and spirits in his first Budget, in an attempt to tackle widespread alcohol abuse, it emerged last night.

However, he will not copy Tory proposals to cut levels of binge-drinking among young people through targeted tax rises on "problem drinks", including alcopops and super-strength ciders.

The Chancellor has come under increasing pressure from ministers, medical experts and health groups amid claims that low duty had contributed to a huge jump in alcohol consumption over the last decade.

Although tax on beer has risen in line with inflation, duty on wine and spirits has not been significantly increased – and the duty paid on a bottle of whisky or gin has not changed since Tony Blair took office in 1997.

An increase in line with the Consumer Price Indices' annual inflation rate, which was 2.2 per cent in January, would add 8.5 pence to the average price of a bottle of wine at a supermarket and almost 30p on a litre of whisky.

But Mr Darling is expected to order above-inflation rises, with more to come in future. He is also expected to rubber-stamp his planned crackdown on high-earning foreigners working in the UK.

The Chancellor will confirm proposals, originally put forward in his pre-Budget report last year, to oblige "non-domiciliaries" who have been living in the UK for at least seven years to pay an annual £30,000 flat-rate tax.

But, Mr Darling is believed to have struck a deal with US tax authorities to exempt many Americans from the full force of the proposals, by ensuring that they cannot be taxed twice on the same earnings.

The shadow Chancellor, George Osborne, will today call on Mr Darling to cut the main rate of corporation tax from 28p to 25p and to abandon the Government's planned increase in the small companies rate from 20p to 22p. He claimed this would would be "an important boost to the competitiveness of the British economy in difficult economic times, and a welcome simplification of the tax system".