Drinkers face a "double whammy" of tax rises in the forthcoming emergency budget which will see the cost of beer, wine and spirits increasing sharply for the second time in three months
The Treasury is considering repeating the 5 per cent increase in alcohol duty imposed in the March Budget as part of a tax-raising package to be unveiled by George Osborne, the Chancellor, next week.
The emergency budget is also likely to see VAT increased from its current level of 17.5 per cent as ministers battle with Britain's huge £156 billion deficit. A VAT hike – possibly up to 20 per cent – would also hit drinkers in the pocket.
Last night industry leaders claimed drinkers had been "punished enough". The duty paid on beer and wine has risen 26 per cent since the start of 2008, while for spirits it has risen by 22 per cent.
However, the overall tax "take" from alcohol fell £730 million, from £15.117 in 2008 to £14.386 billion, in 2009, according to duty bulletins from HM Revenue and Customs (HMRC) and provisional figures for total alcohol expenditure from the Office for National Statistics (ONS).
Another five per cent duty rise in the budget combined with an increase of 2.5 percentage point rise in the rate of VAT rate would put 19p on a bottle of Hardys VR Chardonnay, taking the wine's price to £4.74, while a bottle of Gordon's gin would rise 65p from £13.15 to £13.80.
The warnings of price rises came as Treasury sources told The Sunday Telegraph that ministers could come under ever greater pressure to put up taxes and identify swingeing spending cuts after new forecasts are published this week.
Tomorrow, the new independent Office for Budget Responsibility (OBR) will publish revised growth forecasts which most experts believe will be sharply lower than the Treasury's current prediction of a 3.25 per cent for 2011 and 2.75 per cent for 2012.
The OBR will also estimate the size of the U.K.'s structural deficit – the budget gap that will remain once the economy returns to growth, and which is notoriously hard to predict.
