Gordon Brown has announced in his latest budget that taxes on alcohol and cigarettes are set to increase.

According to the Chancellor, from midnight on Sunday 25 March the cost of beer will rise by one penny per pint and cider by one penny per litre, while wine will increase by five pence per bottle and sparkling wine by seven pence.

John McNamara, BII chief executive, said: “Licensees are currently concentrating on getting themselves ready for the forthcoming smoking ban and the last thing they need is any additional expense. We’re encouraging our members to view the forthcoming year and the smoking ban as an opportunity, but it will inevitably involve costs to licensees in preparation and during the implementation period.

“An increase in duty on beer, cider and wine is often absorbed by the licensee and not passed onto the consumer for some time. Licensees need to be concentrating on making their pubs the place to go after the smoking ban and not becoming preoccupied with the issues of the cost of a pint.”

In addition, a packet of 20 cigarettes will cost 11 pence more, and for 12 months from 1 July nicotine replacement products will incur a lowered VAT level, from 17.5 per cent to five per cent.

Corporation tax will be cut from 30p to 28p from April 2008.