Drinkers, smokers to pay more - but respite for motorists

Britain's drinkers are to pay an inflation-linked rise on beer and wine duties following today's Budget announcement.

But the Chancellor offered motorists some respite by freezing fuel prices for six months.

Gordon Brown announced a 1p per pint rise per pint of beer. Wine will go up by 4p per bottle Duties on cider, sparkling wine and spirits are to be frozen.

The Chancellor announced an 8p per packet rise in cigarette duties.

The increased alcohol tax follows the publication of the Government's Alcohol Harm Reduction Strategy for England, unveiled earlier this week.

It will disappoint the British brewing industry which wanted a freeze on beer duty.

But the Campaign for Real Ale (CAMRA) will welcome increased small breweries relief.

The Chancellor doubled the volume of beer production eligible for the tax relief.

It will mean the 50% reduction on excise duty for the first 5,000 hectolitres produced will apply to breweries producing up to 60,000 hectolitres, compared to 30,000 hectolitres last year.

The Chancellor said his decision to freeze spirit duties for the remainder of this Parliament would be the longest freeze on duty in nearly half a century.

He added: "My decision on cigarettes is, for public health reasons, to go ahead with the rise but only the annual inflation rise of 8p a packet."

The group Retailers Against Smuggling reacted angrily to the 8p per packet duty rise on cigarettes.

Spokeswoman and shopkeeper Audrey Wales said: "Yet again, the Chancellor has ignored the effect that his high tobacco tax policy has on retailers like myself.

"Put simply, it is forcing us out of business as the criminal activity of tobacco smuggling eats into the sales of the corner stores."

The six-month freeze on fuel prices will mean that a 1.9p a litre rise in unleaded petrol and a similar rise in diesel will be deferred until September.

There was more relief for drivers when Mr Brown announced there would be no change to vehicle excise duty (car tax).

Some in the travel industry had feared that the Chancellor could increase Air Passenger Duty (APD) - the levy paid by travellers when they leave UK airports. But Mr Brown announced there would be an APD freeze.