Darling U-turns on spirits tax hike

Chancellor Alistair Darling has cut the duty hike on spirits he announced on Monday from 8% to 4% in response to lobbying from the Scotch whisky industry.

The U-turn has prompted the WSTA and the British Beer & Pub Association to lobby Darling to call off the 8% tax hike that is set to hit other categories on Monday (Dec 1).

The WSTA said the decision unfairly penalises wine, with four out of five shoppers paying more for their wine, and consumers of under-£5 wines – the vast majority at 82% – bearing the brunt of the increases.

Chief executive Jeremy Beadles said: "We welcome the admission that the tax change was wrong because it meant consumers paying more, but if that's true for spirits it's also true for wine.

"It is baffling that the government should think that what's right for spirits is wrong for wine. The Chancellor must remove this anomaly as a matter of urgency."

Speaking about the effect of the tax hikes, he added: "It is staggering that a government which claims to act in the interests of the many not the few wishes to punish ordinary hard-working consumers who wish to spend the little cash they have left on a drink.

"The Chancellor has turned into Santa Claws, snatching scarce pleasure from millions of people."

In Monday's pre-Budget report, Darling said tax hikes on alcohol, tobacco and petrol would offset a 2.5% cut in the VAT rate from 17.5% to 15%.