12 Mar 2008


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Budget 2008: how it affects the retail sector

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Tax on alcohol will increase by 6% above the rate of inflation from midnight on Sunday, Chancellor Alistair Darling has announced in today's Budget.

Darling

Beer will rise by 4p a pint, cider by 3p a litre, wine by 14p a bottle and spirits by 55p per 70cl bottle - the first rise on spirits since 1998.

Sparkling wine will rise in price by 18p for a 75cl bottle.

And alcohol taxes will rise by 2% above the rate of inflation over the next four years, in order to keep pace with rising incomes.

But there was no additional tax on "alcopops". A 275ml bottle of spirits-based ready-to-drink will increase in price by just 3p. Sparkling cider will rise in price by 14p for a 75cl bottle.

Duty on tobacco will rise, adding 11p to 20 cigarettes and 4p to five cigars, from 6pm today.

A 25g pack of hand-rolling tobacco will rise by 11p and 25g of pipe tobacco by 6p.

The Government may also introduce legislation to force supermarkets to impose a charge on single-use carrier bags.

The legislation will be brought in in 2009 "if we haven't seen sufficient progress" on a voluntary basis by the end of this year, he added.

Darling said that, based on the experience of other countries, the move could see a 90% reduction in bag usage, with around 12 billion fewer plastic bags in circulation.

The Government said it would consult in the meantime on how the charge would operate and how to ensure that any money raised goes to environmental charities.

On the economy in general, Darling said: "Britian is better placed than other economies to withstand the slowdown in the global economy. We will do everything we can to maintain stability, keeping inflation and interest rates low.

"The British economy will continue to grow throughout this year and beyond."

But he downgraded the forecast for 2008, saying the economy would grow by between 1.75% and 2.25% in 2008. The growth forecast for 2009 was cut to between 2.25% and 2.75%.

Darling said inflation would rise in the short term as higher oil and food prices feed through into domestic inflation. but he forecast it would return to 2% by 2009.

The 2p fuel duty rise planned for April will be postponed until October. But there will be a further 0.5p real increase in fuel duty in 2010.

Darling also confirmed changes to Capital Gains Tax and a new rate of Corporation Tax, which falls to 28p from April.

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