Tax relief: Beer drinkers (Picture: Getty)

Chancellor George Osborne’s decision to increase duty on spirits such as Scotch whisky while cutting the price of beer undermines one of Britain’s major industries, a leading trade organisation has warned.

The decision to add 53p to a litre bottle of spirits while cutting up to 3p off the price of a pint announced in today’s budget is ‘unfair and incomprehensible’, the Scotch Whisky Association (SWA) said.

Price hikes of 5.3 per cent on Scotch whisky, which by law can only be made in Scotland, will lead to a reduction in sales and hit jobs and employment prospects, the SWA claims.



‘This is an unfair and incomprehensible attack on the Scotch whisky industry in its domestic market, where it is a vital part of the Scottish and UK economy and where it supports many other businesses,’ said SWA chief executive Gavin Hewitt


‘It penalises responsible drinkers who like a dram rather than a pint. There is no justification for spirits being taxed more heavily than beer.’

He added: ‘It hinders the government’s ambitions for an export-led recovery.’

BUDGET 2013: George Osborne’s budget announcement as-it-happened

Criticism: The whisky industry has been hit by a tax rise (Picture: PA)

Wine and cider drinkers may also want to drown their sorrows before the budget changes kick in on Sunday, with prices set to increase by 10p and 2p respectively.

Beer drinkers can raise a glass however after the chancellor announced plans to cut a penny off the price of a pint was greeted with the biggest cheer of the day in the Commons.

Mr Osborne also announced plans to scrap the inflation-busting beer tax escalator, taking the total reduction on the price of a pint to 3p.

BUDGET 2013: Budget 2013: Cheaper beers but no cheers in George Osborne’s gloomy statement

Brigid Simmonds, chief executive of the British Beer & Pub Association, disagreed with the SWA’s claims and hailed the move as a ‘boost to Britain’s pubs at a time when it is most needed’.

‘This is absolutely brilliant news, and it will make George Osborne the toast of Britain’s pubs today,’ she said.

She added: ‘In also abolishing the beer tax escalator, the chancellor has ended a hugely damaging policy that would have made Britain’s beer the most heavily taxed in Europe.

‘This will protect thousands of jobs this year, and will allow us to create many new jobs in this brilliant industry.’

Savings: Beer drinkers will save money (Picture: PA)

Campaign for Real Ale executive Mike Benner added it ‘was a momentous day for Britain’s beer drinkers’.

He added: ‘Tonight [they will] be raising a glass to the chancellor for axing this damaging tax escalator and helping keep pub-going affordable for hard-pressed consumers.’

BUDGET 2013: George Osborne hit with barrage of abuse within seconds of joining Twitter

Meanwhile, there was good news for motorists after a 3p petrol duty rise was scrapped, while the income tax allowance will rise to £10,000 by April 2014.



A reduction in the price of beer was a small positive in an otherwise gloomy set of financial figures, with Britain’s growth forecast for this year halved to just 0.6 per cent.

Budget announcement: George Osborne (Picture: Reuters)

While the sluggish growth figures mean borrowing will be higher than expected – hitting £114billion this year compared to a previous forecast of £108billion.

Delivering his statement in the Commons, Mr Osborne said: ‘This is a Budget for people who aspire to work hard and get on.’

Despite his positive outlook, his admission that economic recovery was taking ‘longer than anyone hoped’ was met with jeers from the Commons.

Mr Osborne said the government had cut the deficit by a third and helped businesses create 1.25million new jobs.

He added the budget for ‘our aspiration nation’ despite the public sector pay cap of 1 per cent extended by another year and Whitehall department budgets set to be cut by 1 per cent.