A reprieve for cider makers?

Cider apples - 40-year investment cycle

Cider tax hike amended, but Labour to press on

British cider makers could get a reprieve on the 13% duty hike they were slapped with in last month’s budget, if Labour fails to get re-elected on May 6th.

Chancellor of the Exchequer Alistair Darling hoisted cider duty by 10% above inflation to end what he called the “long-standing anomaly” that meant the drink was taxed less than beer.

But yesterday an amendment was written into the finance bill stating the tax rise will remain temporary until June 30th, when the new government will have the chance to reconsider the controversial increase.

Labour has indicated that, if re-elected, it will press ahead with the duty rise in a bid to plug the country’s record budget deficit. Meanwhile the Tories and the LibDems have indicated they would not pursue a blanket increase on cider duties.

“It’s not the case that the price of a pint will drop at midnight,” said a National Association of Cider Makers (NACM) spokesman, seeking to clarify earlier reports that wrongly suggested the government had been forced to make an outright U-turn.

Hikes on cider duty, the introduction of a so-called ‘broadband tax’ and plans to scrap tax relief for holiday homes will be considered again in June, in what the Tories called a “major victory”. Labour accused the Tories of fiscal irresponsibility.

The spokesman for NACM told BG today: “What we would really rather is stability. The investment cycle for cider apples is 30 or 40 years. We cannot go year-to-year not knowing what the government is going to do.”