Budget 2008: Price rises planned for cigarettes and alcohol
Price rises on cigarettes and alcohol have been announced today in the chancellor’s first Budget.
Alistair Darling said from 18:00 GMT today the duty on tobacco will rise, adding 11p to the price of a packet of 20 cigarettes and 4p to the price of five cigars.
He also announced that the five per cent reduced rate of value added tax on smoking cessation products will continue beyond June 30th this year “to help people stop smoking”.
Health groups welcomed the rise in the price of tobacco but said they were disappointed it was not substantially above the inflation rate.
“Price rises have proved to be effective in encouraging people to stop smoking and deterring people from starting to smoke,” said Cancer Research UK chief executive Harpal Kumar.
“These increases could have been used to help stop young people from taking up smoking and help more smokers to quit.
Following a number of reports in the past year warning of hazardous levels of alcohol consumption in the UK, Mr Darling bowed to pressure from health campaigners and increased the cost of alcohol.
“From midnight on Sunday, alcohol duty rates will increase by six per cent above the rate of inflation. Beer will rise by 4p a pint, cider by 3p a litre, wine by 14p a bottle and spirits by 55p a bottle,” he told MPs.
“Alcohol duties will increase by two per cent above the rate of inflation in each of the next four years.”
Mr Darling said increased taxes on alcohol will contribute to additional support for families and to help lift more children out of poverty.
Health groups have welcomed the increase in the cost of alcohol, saying it should help to cut the number of alcohol-related deaths.
“Alcohol is now 65 per cent more affordable than it was in 1980, and we need to reverse this trend,” said Professor Ian Gilmore, president of the Royal College of Physicians and chair of the UK Alcohol Health Alliance.
“This welcome direction of travel needs to be joined by other public policy measures to reduce availability – placing limits on advertising and promotion and introducing better measures of screening and treatment for those drinking at levels likely to harm their health.”
British Liver Trust chief executive Alison Rogers said legislation should be created to ensure a minimum price per unit.
“As a nation we can send clear messages about the fact that alcohol is not an ordinary commodity and certainly should not be available at pocket money prices,” she added.
“Additionally, the government could ensure that supermarkets are not allowed to sell alcohol for under, say, 40p or 50p a unit.”
But the price increases will make consumers suffer, according to the Wine and Spirit Trade Association.
Its chief executive Jeremy Beadles said: “It is no cause for celebration that British consumers will now pay more tax on wine than anyone else in the European Union.
“It is bizarre at a time when the economy is slowing, prices are rising and many families are feeling the pinch that the government should choose to add to their burden by making the simple pleasure of a glass of wine or spirits considerably more expensive.”
Rob Hayward, British Beer and Pub Association chief executive, added: “By aiming a tax hike at beer, the chancellor is shooting himself in the foot.
“Treasury revenues will continue to fall, pubs will continue to close and beer sales sink further.”
He added: “Government is punishing all beer drinkers rather than tackling the minority of drunken hooligans.
“But government tax policy is fuelling Britain’s binge-drink problem by driving people away from beer, out of the pub into the arms of the deep-discounting supermarkets.
“They don’t pay beer duty and don’t allow brewers to pass it on, so their rock-bottom prices will remain unaffected by this tax hike.”
