The British Retail Consortium welcomed the Chancellor’s decision not to burden businesses with more costs, but was disappointed that “he has done nothing to stimulate consumer demand”.
Brown also announced a freeze stamp duty on commercial property purchases. The BC said that this would be “especially good news for small retail businesses” with 60% of future transactions to be exempted.
The Chancellor announced that a pint of beer would rise by a penny, while a bottle of wine would cost 4p more. But duties on spirits, cider and sparkling wine would be frozen.
A packet of 20 cigarettes will rise by 8p. According to the Tobacco Manufacturers' Association a typical packet of 20 cigarettes costs £4.51 in the UK, of which £3.55 is made up of tax.
The TBA believes that "high" tobacco taxes have increased smuggling and made a huge dent in the income of independent shopkeepers.
The Wine & Spirit Association said the 4p a bottle increase on still wine was "scandalous" and well above inflation.
Williamson pointed out that wine-based ready-to-drink beverages would also be hit because of the increase in tax on still wine. But he did welcome the decision not to increase excise duty on sparkling wine.
The Scotch Whisky Association said the decision to freeze duty on spirits was "another major step" on the road towards a fairer tax system for alcoholic drink and good news for the industry.
But reaction from the brewing and pub trade to the 1p a pint increase in duty was less welcome. MD of Kent-based brewer Shepherd Neame, Jonathan Neame told a newswire, that the only winners would be “the smugglers and the French Treasury, who already collect duty and VAT on the million pints brought in from Calais every day”.
The British Beer and Pub Association said the increase would only encourage more people to travel across the Channel and shop for their beer in France.
Brown is to defer the 1.28p per litre annual revalorisation of fuel duties for six months until October 1 because of the high oil prices in the run-up to war in Iraq. With no change if current international uncertainties persisted.