Government suspends cider duty hike
The proposals to increase cider duty, which were part of the Finance Bill announced by Chancellor Alistair Darling in last week’s budget, have been put on hold as the government rushes to pass all legislation before Parliament dissolves on 12 April.
The cider duty rise, which came into force on 1 April, is expected to expire on 30 June and revert to the standard 2 per cent above inflation increase currently applicable to beer and spirits.
While the Conservative party has vowed not to impose the tax if they win the general election on 6 May, Labour has said if they return to government for a fourth term, they will reinstate the cider duty.
'Reduce beer tax too'
Brigid Simmonds, chief executive of the British Beer and Pub Association, has written an open letter to Chancellor Alistair Darling and Shadow Chancellors George Osborne and Vince Cable requesting that the next government considers abandoning tax increases on beer as well as cider.
“The arguments for abandoning the proposed tax increase on cider are equally compelling for beer - Britain's national drink, sales of which are the lifeblood for community pubs throughout the UK,” the letter said.
“Despite the headline tax increase for cider of 10 per cent, in reality this amounted to a 2.4 pence tax increase per pint - exactly the same as tax increase on a pint of beer.
“Just as you consider cider's 2.4 pence a pint tax increase to be punitive at a time when British firms are struggling to emerge from recession, so is beer's 2.4 pence a pint tax increase. We therefore ask you to extend the same support to beer and pubs you are proposing extending to cider makers and abandon the planned tax increase on Britain's national drink - beer.”
The 2010 budget saw duty on beer rise by a total of 5 per cent, adding about 10p to the price of a pint while the tax on cider rose by a total of 13 per cent. A bottle of wine increased by about 10p a bottle while a bottle of 70cl spirits rose by about 36p.
