The 10 per cent increase in tax on cider will be reversed at the end of this month, the Chancellor said yesterday. Indeed, it was good news for the battered pub and brewing industries as George Osborne eschewed the traditional Budget day move of increasing duty on alcohol and tobacco, deciding instead to freeze the so-called "vice taxes".
In March, the previous Labour government increased the duty on cider by 10 per cent, arguing that annual increases on the drink had lagged behind those on other alcoholic beverages.
Despite the rise in VAT, which will lead to a 2.5 per cent increase in prices from next January, yesterday's decision to freeze beer duty was welcomed by the industry.
"We applaud the Government's decision to freeze beer tax and deliver on its promise made in the coalition agreement to not penalise pubs, responsible drinkers and important local industries," said Brigid Simmonds, the chief executive of the British Beer and Pub Association. "This is a welcome relief for struggling pubs during difficult times."
In March's Budget, the then Chancellor, Alistair Darling, increased duty on beer, wine and spirits by 1 per cent, as well as announcing the 10 per cent jump in the price of cider.