Tax on booze and cigarettes to rise

The cost of alcohol and cigarettes will rise, the Chancellor said this afternoon - prompting critics to say he was helping signal the death knell of the British pub.

A pack of 20 cigarettes will rise by 11 pence from 6pm tonight, while a pint of beer will cost an extra 4 pence from Sunday.

Spirits will be taxed an extra 55 pence a bottle and cider 3 pence a litre.

Duties on alcohol will go up by 2pc above inflation for next four years, although the Chancellor stopped short of stating the reason for this was to tackle binge drinking.

The Chancellor said: “Mr Deputy Speaker, today is no smoking day. From 6pm today the duty on tobacco will rise, adding 11 pence to the price of a packet of 20 cigarettes and four pence to the price of five cigars.

“And to help people to stop smoking, we are continuing the five per cent reduced rate of VAT on smoking cessation products beyond June 30 this year.”

He said that as incomes have risen, alcohol has become more affordable, with the average bottle of supermarket wine decreasing by 45 pence to £4 in real terms since 1997.

He said: “Mr Deputy Speaker, it is only because I have taken these decisions on alcohol and on closing tax loopholes that I am able to provide additional support for families and lift more children out of poverty.”

But critics said the alcohol increase could lead to a pint of beer going up by as much as 20p and cause the closure of pubs.

The Campaign for Real Ale (CAMRA), which recently announced that 57 pubs are lost permanently every month as the price differential between pubs and supermarkets widens said the Chancellor's move would drive people out of pubs to the supermarkets even more.

Mike Benner, Chief Executive of CAMRA said, “The Chancellor has failed to recognise that well-run community pubs are the solution to Britain's binge drinking problems.

“This budget will do nothing to stop binge drinking, but it will lead to pub closures on a huge scale, widen the gap between supermarket and pub prices and encourage smuggling and cross-border shopping. It's a great big nail whacked ruthlessly into the coffin of the British pub.”