Emergency Budget: Sin taxes avoid further increases

By Jonathan Moore

There will be no increase in alcohol or tobacco duties, the chancellor announced today.

The coalition government will also reverse the previous government’s plans to increase the duty on cider.

There had been speculation drinkers could be hit by another increase in alcohol duty, after Labour chancellor Alistair Darling hiked the duty on beer and wine by 26% since the beginning of 2008.

Senior drinks industry campaigners responded by arguing higher duties decreased the total tax take on alcohol, as drinkers were deterred by higher prices into parting with their cash.

The Wine and Spirit Trade Association (WSTA) has pointed to figures showing tax receipts from alcohol slumped by five per cent in 2008/09.

“Today’s announcement provides some relief for a sector that has faced substantial tax increases in recent years and I welcome the chancellor’s decision,” said WSTA chief executive Jeremy Beadles.

“Repeated tax hikes have produced less revenue for the Treasury and punished responsible drinkers, while failing to tackle the problem of binge-drinking.”

A separate ‘catch-up’ increase, which had seen cider escape successive piecemeal hikes, also sparked outrage. But the last government dropped the plans to increase duty on cider by ten per cent after a public backlash against the move.