Ministers drop plans for 10 percent increase in cider tax

07 April 2010

The government has dropped plans for a 10% tax rise on cider following fierce opposition to the move.

Ministers were forced to rescind the increase, announced in the Budget, as part of efforts to get laws passed after the general election was called. The Tories and Lib Dems welcomed the cider move but Labour say it will be re-introduced if they are re-elected. The 10% above inflation tax rise for cider came into force at the end of last month after being announced by Chancellor Alistair Darling. Mr Darling said it was justified because cider had historically been treated more favourably than other alcohol categories but the opposition parties said the move was punitive, at a time when British firms were struggling to emerge from the recession. The Conservatives said the tax rise would now expire on 30 June, after which cider would be subject to the standard 2% increase announced in the Budget for beers and spirits. The Conservatives and Lib Dems are fighting to win seats in the west of England, the historic home of the cider industry. The cider tax rise was included in the government's Finance Bill, which is among the outstanding bills being considered by Parliament. Labour has said all the tax measures will be re-introduced should Labour be re-elected. BBC News -