Duty escalator scrapped in Budget

19 March, 2014

Chancellor George Osborne has scrapped the duty escalator on wines and spirits a year early in today's Budget.

Instead there will be an increase in duty in line with inflation on all alcohol products expect beer, spirits and what he termed "ordinary cider".

Beer duty is being cut by 1p per pint as it was last year, while spirits and most cider duty will be frozen.

The inflation rise in wine duty will add in the region of 6p per bottle.

All the changes come into effect from next Monday, March 24.†

The abolition of the escalator for all alcohol comes a year after it was removed from beer.

The controversial duty esclator was due to end in 2015. It imposed an automatic annual duty hike of 2% above inflation on alcohol products.

Osborne said the escalator was introduced by the last government and that the British public "hated" it.†

The Chancellor said that the escalator on tobacco would remain through the next parliament as there were no compelling health reasons to remove it.

Osborne said: "Weíve introduced new laws to prevent alcohol being sold below minimum tax rates, and this helps prevent supermarkets undercutting pubs, and helps stop problem drinking.

"Itís a far more targeted approach than the alcohol duty escalator hated by many responsible drinkers. Today, I am scrapping that escalator for all alcohol duties.

"They will rise with inflation, with these exceptions. Scottish Whisky is a huge British success story. To support that industry, instead of raising duties on whisky and other spirits, I am today going to freeze them.

"And with some cider makers in the West Country hit hard by the recent weather, I am going to help them by freezing the duty on ordinary cider too."

Ordinary cider is classified as anything excluding sparkling cider above 5.5% abv.†

"And then thereís beer," said Osborne. "I know the industry, led so ably by my Honourable Friend for Burton, have been campaigning for a freeze.

"But beer duty next week will not be frozen. It will be cut again by 1 pence. Pubs saved. Jobs created. A penny off a pint for the second year running."

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