§ Next is alcohol. Cross-border shopping and the smuggling of alcohol is a serious problem for the retail drinks industry in Britain and it affects Government revenue, although our total revenue is still rising. Shopping abroad is one of the greater freedoms gained for consumers in the European single market. But smuggling is a crime that we will continue to fight.
§ Our duty levels are higher than those of our continental neighbours. Each member state must retain its freedom to set its own tax levels and we accept the downward competitive pressures on tax in a single market. We therefore have to address the legitimate concerns of the British drinks industry, but at the same time minimise losses of revenue that would otherwise have to be raised by other taxes.
§ This year I propose to freeze the duty on beer and wine. Tax as a share of the cost of a pint of beer will be the lowest that it has been in this country for more than 20 years.
§ There are two changes that I propose to make to other duty rates here at home. Very strong cider is at present undertaxed compared with other drinks and I intend to raise its duty by 8p a pint from next October, without disturbing the rate for ordinary ciders.
§ High rates of duty at home have made it difficult for the Scotch whisky industry to press its excellent case for lower duty rates in other countries. Scotch is one of our most important exports. Spirits duty will therefore be reduced by 4 per cent. from 6 pm today. That is equivalent to 27p off a bottle of whisky. [Laughter.] I have just had the last sip of the expensive stuff.