Darling drops spirits duty but bashes beer

The Chancellor has done an amazing U-turn by dropping his duty rise on spirits to 4% but singled out pubs for more harsh punishment by keeping the full 8% increase for beer.

Alistair Darling has ordered officials to make changes on the taxation of whisky, and therefore all spirits including alcopops, but kept the increase on beer after lobbying from the Scotch Whisky Association that 29p would be added to a bottle.

The duty on spirits will only be increased by 4% — not the permanent 8% hike on beer to off-set the 13-month 2.5% cut in VAT.

A statement said: "The Government is today making an order to amend the previously announced increase in the rate for spirits from 8% to 4%, to leave spirits in broadly the same position as other alcoholic products."

The move means everyone is receiving help except for the pub trade. It has been singled out by the Government for more devastating punishment.

"The decision to raise tax rates on alcohol was disappointing, but we are surprised to now find out that a last minute deal on spirits has singled them out for special tax cutting treatment," said British Beer and Pub Association chief executive Rob Hayward.

"We are therefore calling on the Chancellor to urgently reconsider his latest beer tax hike. As a major employer and considering the pressures on the pub, we believe we also deserve a fair crack of the whip.

"If the Government is now changing the rules for spirits, it must change the rules for beer. It should consult on these issues. On what basis has he decided to grant a tax cut only on Scotch Whisky, spirits and alcopops?"