Budget 2009: Cigarettes and alcohol - duty up 2%The Chancellor penalises smokers and drinkers

22 April 2009

The Chancellor today attempted to tackle rapidly increasing levels of public borrowing with a frugal Budget.

His new economic forecast revised his predictions of last November that the economy would contract by between 0.75% and 1.25% of GDP in 2009 – the new forecast is for a contraction of 3.5%. Smokers and drinkers were penalised as usual.

Tax on cigarettes and tobacco


Counterfeit cigarettes and alcohol are sold at a big discount

Alistair Darling announced that the duty on tobacco was to go up by 2% from 6pm today. This is the equivalent of an extra 7p on a pack of 20 cigarettes.

Health charities welcomed the move, saying evidence showed that higher prices lower people's consumption of tobacco and encouraged more people to give up smoking.

Tax on beer, wines and spirits

Duty on alcohol is also set to rise by 2% from midnight tonight, adding an extra 5p to the average price of a pint purchased in a pub. 

The increase in duty on beer, wine and spirits sold in supermarkets and other outlets is likely to be absorbed by retailers where possible.

The announcement today confirms plans to increase the cost of alcohol (previously announced in the 2008 budget) for this year and the next three years.

The drinks industry was less than pleased, with the Wine and Spirit Trade Association claiming that the move "threatens more job losses in a sector already facing record numbers of business failures, pub closures and worsening trading conditions".

Personal budget calculator

To see what effect the Budget will have on your own finances, try out our Budget 2009 calculator.

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