The British Beer & Pub Association (BBPA) has said Gordon Brown’s 2006 budget is a missed opportunity to create a clear, long-term strategy for beer taxes and correct a long-standing distortion between beer and wine.

The BBPA, whose members account for 98 per cent of the beer brewed in the UK, feel that the Chancellor’s 1p increase per pint of beer is inconsistent with his decision to freeze tax on spirits and cider. Tax on spirits has been frozen for nine successive years.

Wine is due to go up 4p, but champagne and British sparkling wine have been frozen “in anticipation of World Cup success this summer”, said Mr Brown.

Mark Hastings, director of communications at the BBPA, said: “It seems curious that the strongest alcoholic drinks, such as spirits and wine, have enjoyed consistently better tax treatment than beer, which has suffered a 22 per cent tax hike since 1997.

“Stronger beer is taxed more than weaker beer, but stronger wine is taxed the same as weaker wine. Consequently, because wine has increased significantly in strength it is now taxed less relative to beer.”

According to the BBPA, the unequal treatment of the beer and wine taxes is costing the treasury an estimated £200m a year, and it claims that instability, uncertainty and pressures on the sector have cost 1000 jobs in the brewing industry over the last 12 months.

Miles Quest, spokesman for British Hospitality Association (BHA), however, said: “Any freezing of duty is to be welcomed, as it will help keep prices stable when spending in the High Street is under pressure. The increase in beer duty will have little negative impact.”

Amusement machine licence duty (AMLD) categories will also be extended to fixed odds betting terminals (FOBTs) at an annual rate of £1,965. The jackpot machines with a payout of over £4,000, which will be allowed in the regional casino, will be increased at an annual rate £5,000.

Section 16/21 machines – those with maximum cash prize and a random number generator – will see a duty rise from £250 each year to £1,965 as will jackpot machines with a payout of up to £4,000, at an increased rate of £2,500. Pinball and video machines will now be outside the scope of AMLD. All of the AMLD changes will be effective from 1 August 2006.

The Betting and Gaming Duties Act 1981 will also be amended to confirm that, with effect from 6 December 2005, FOBTs are no longer subject to general betting duty.