Tobacco News and Interesting Information

A bidding war over 'binge drinking' taxes broke out at the weekend as duty on alcohol became a key political battleground ahead of this week's Budget.

By Saturday night, all three parties had pledged to raise taxes on alcohol, with Chancellor Alistair Darling indicating that he will be hiking duties on wines and spirits in his debut Budget on Wednesday.

Liberal Democrat Treasury spokesman Vincent Cable added a novel contribution to the debate, telling his party's spring conference that VAT on fruit juice and smoothies should be cut from 17.5% to 5% to help encourage healthy diets, with the anticipated £225m shortfall made up by raising the tax on some alcoholic drinks.

The Conservatives promised on Friday to raise tax on super-strength beer, cider and alcopops to tackle binge-drinking, while reducing the tax on low-strength beer and cider enjoyed by 'sensible' drinkers.

Mr Cable told his party's conference in Liverpool that Ministers had failed to discourage binge-drinking by cutting taxes in real terms on 'highly alcoholic beverages'. They had in effect promoted 'cut-price Bacardi Breezers and vodka shots' he said.

Health groups welcomed the Lib Dem proposal, pointing out that although some weekly shopping items are zero-rated for VAT, many drinks, including healthy fruit juices, attract the full rate.

But the Treasury dismissed Mr Cable's idea. A spokesman said: 'The 2004 Wanless Report on public health highlighted difficulties of using the tax system to promote public health and stressed the importance of considering tax alongside alternative policy instruments to decide how health objectives, including the promotion of healthy eating, might be most cost-effectively achieved.'

Mr Darling indicated in an interview on Saturday that alcohol duties would rise and warned that tax receipts were likely to fall during a 'difficult' time for the economy.

'It is a time of great uncertainty,' he said. 'My number one objective is to ensure that this is a Budget for stability. That is absolutely essential for the economy.

'It is essential for every family in this country. We have to ensure we support the economy in what are undoubtedly difficult times.'

The rare consensus between the parties on the issue of tax on alcohol highlights how the widespread coverage of yobbish, drink-related behaviour in British town centres has made alcohol one of the few politically acceptable targets for tax-raising by the Government.

Duty on cigarettes is also expected to be increased at a rate to exceed current inflation (CPI) of 2.2%.