Budget 2008: Alcohol and duties

Alcohol taxes are set to be increased above inflation as part of a public health and revenue-raising drive.

Amid concerns about binge drinking, Alistair Darling announced in his Budget on Wednesday that alcohol duty will rise by six per cent above the rate of inflation next week.

This will mean the cost of a pint of beer rising by four pence a pint, cider by three pence a litre, wine by 14 pence a bottle and spirits by 55 pence a bottle.

Duties will also increase by two per cent in real terms in each of the next four years.

The cost of cigarettes will also go up 11 pence for a packet of 20 and cigars by four pence on a packet of five as of 6.00pm on Wednesday.

On "no smoking day" the chancellor also announced more help to stop people smoking, with a continuation of the five per cent reduced rate of VAT on smoking cessation products beyond June this year.

The increases will bring in £400m in the next financial year, £505m the following year and £625m in 2010-11.

Darling said: "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."

However the Wine and Spirit Trade Association claimed the government was penalising ordinary families already squeezed by rising living costs and pointed out that Britons now faced the highest duty on a glass of wine in Europe.

"The fact is that most people in this country - millions of us - enjoy a glass of wine or a glass of spirits at home, in the evening out at a pub and why should we pay this massive hike to the chancellor in this way?" spokesman Gavin Partington said.

"Ordinary families are going to be punished on alcohol… it's a very striking increase indeed and we condemn it," he added.