Drinkers raise glass to alcohol duty freeze

Britain's drinkers were given a reason to raise their glasses as Chancellor George Osborne today promised not to raise duties on alcohol.

Delivering his first Budget statement to the House of Commons, he said taxes on tobacco would also remain the same, following the "substantial increases" announced in March.

The Chancellor scrapped Labour's controversial plan to increase the duty on cider by 10%, saying this would come "just in time to celebrate England's progress to the quarter finals or else to drown our sorrows".

The moves will be welcomed by campaign groups who slammed the previous government for "piling misery" on struggling pubs.

British Beer and Pub Association chief executive Brigid Simmonds said: "We applaud the Government's decision to freeze beer tax and deliver on its promise made in the coalition agreement to not penalise pubs, responsible drinkers and important local industries.

"This is a welcome relief for struggling pubs during difficult times.

"A beer tax freeze will also help the beer and pub sector's ability to play its part in contributing to much needed economic growth and generating valuable private sector jobs."

She termed the VAT rise "a price to pay for tackling the deficit and bringing Britain's balance sheet back in order".

Meanwhile, a spokesman for the Tobacco Manufacturers' Association (TMA) said: "We welcome the coalition Government's decision not to increase tobacco duties at this time as we continue with the positive work with HMRC, through both the TMA and our member companies, to combat the smuggling of both counterfeit and genuine tobacco products."

While there was no increase in the rate of duty on beer, wine or spirits, the Government will press ahead with plans to increase rates by 2% above inflation each year to 2015.

Secondary legislation will also be introduced to increase tax on cheap, strong ciders.

Henry Chevallier, chair of the National Association of Cider Makers (NACM), said: "We offer a cautious welcome to this Budget if it signals the intention to introduce stability and sanity on duty rates.

"After successive increases in duty this news offers some respite, but it only adds to the chaotic approach to duty if next time rates go up again."

He warned that future hikes on stronger ciders could simply "displace the problem" of unhealthy drinking.

"If we target drinks and not people, we fail the people who deserve our support and we penalise the majority that drink responsibly and damage responsible producers and retailers in the process," he said.

The Government also drew criticism from anti-smoking campaigners who had widely anticipated an increase in duty on cigarettes.

Eileen Streets, director of tobacco control at the Roy Castle Lung Cancer Foundation, said: "We are very surprised and disappointed by the announcement that taxes on tobacco will not be increased.

"This was painted as the tough but fair budget and it seems with so many severe cuts and pay freezes on the table, the Chancellor felt that increasing taxes on products such as tobacco and alcohol was just a step too far.

"We believe raising taxes on tobacco helps encourage smokers to quit and dramatically improves the health of our nation.

"We would strongly urge the Government to consider increasing taxes substantially on tobacco as soon as possible."

Betty McBride, director of policy and communications at the British Heart Foundation, said the charity was "disappointed" with the decision not to raise tax on tobacco.

"We know this simple measure puts people off smoking and helps reduce the harm caused by cigarettes," she said.