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Last Updated: Wednesday, 17 March, 2004, 14:36 GMT
Smokers face further price rises
Smoker in bar
More bad news for smokers
The price of a packet of cigarettes is to rise by 9p, the chancellor has announced in the Budget.

Gordon Brown said the rise, "for public health reasons", was in line with inflation.

From Monday, duty on wine will increase by 4p bottle and beer by 1p. But tax on cider and sparkling wine was frozen, as was the tax on spirits.

However, there was good news for gamblers as the chancellor announced that betting tax would be frozen.

Revenue 'loser'

The excise duty on a packet of 20 cigarettes will go up by 8p, but once VAT has been added to the higher price, a pack will cost 9p more.

The Tobacco Manufacturers' Association (TMA) said the decision would encourage more people to buy cheaper cigarettes abroad.

"This was a lost opportunity to reduce the amount of cigarettes and tobacco that escapes UK duty, legitimately or otherwise," said TMA chief executive Tim Lord.

He added the decision would actually cost the Treasury 4.4bn a year in lost revenues over the coming year.

'Welcome relief'

Elsewhere, small breweries and real ale enthusiasts welcomed Mr Brown's Budget.

Pub interior
Real ale fans welcomed news of tax relief for small brewers
The chancellor said he would be extending a current tax break scheme, allowing double the volume of beer produced to be eligible for relief.

The scheme was launched in 2002 - and halved the duty payable on such beers which are often produced by small village pubs.

The move means the 50% reduction on excise duty for the first 5,000 hectolitres produced will apply to breweries producing up to 60,000 hectolitres, compared with 30,000 hectolitres last year.

Fraud crackdown

Campaign for Real Ale spokesman Mike Benner said: "The increase in the threshold will cost the Treasury little, but will enable brewers to invest in their businesses making them more competitive and increasing their access to market."

But while duty on spirits was frozen for the seventh budget in a row - the longest freeze in almost half a century - Mr Brown added that bottles are to be stamped to prevent fraud.

He told MPs the move was due to "continued high levels of spirits duty fraud".

To sweeten the move he said he would "help the trade financially" by deferring payment for the stamps and by helping with capital investment.

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