The Budget: Scotch price unchanged but beer to cost more: Excise duty

THE SCOTCH whisky industry is set to enjoy at least 18 months breathing space from the threat of tax increases.

Industry analysts said yesterday's decision not to raise excise duty - currently pounds 5.55 on a pounds 11 bottle of Scotch - made it very difficult for the Government to push through an increase in November's Budget.

VAT is also levied on whisky - about pounds 1.55 on a standard bottle - making it by far the most heavily taxed alcoholic drink.

James Bruxner, chairman of the Scotch Whisky Association, said: 'This is a move in the right direction. The only method of taxing alcoholic drinks is one which taxes all drinks at the same rate of duty per degree of alcohol.'

Beer, wine and cider drinkers, though, will have to pay more. Duty on beer is being raised by about 1.5p a pint on weak brews, cider by 0.5p a pint, and wine by 5.5p per bottle.

Smokers will pay at least 10p more for a packet of 20 cigarettes.

Publicans, who will bear the brunt of moans about the increases, will themselves have to pay another pounds 75 in tax for each amusement machine with prizes on their premises. That lifts the annual cost by 20 per cent to pounds 375.

While the increase on beer was expected, brewers attacked the move. Consumption of beer last year fell by 800,000 pints a day.

Miles Templeman, managing director of the Whitbread Beer Company, said the big differential between the UK's tax regime and the lower ones in most other EC member states would 'now be much more acute'.

(Chart omitted)