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Britons Peeved By 'Sin Taxes' On Gas-Guzzlers, Alcohol, Tobacco

JANE WARDELL   03/13/08 07:23 PM ET   AP

Alcohol

LONDON — Many Britons were resigning themselves to more puritanical lifestyles Thursday as they faced the prospect of "sin taxes" that will increase the cost of alcohol, cigarettes, gas-guzzling cars and, potentially, plastic bags.

"Don't Drink or Drive" trumpeted the Sun newspaper after Treasury chief Alistair Darling unveiled the measures on Wednesday in the government's annual spending plan.

The Labour Party government is hoping that hiking taxes on booze will help curb Britain's binge-drinking culture.

But breakfast talk radio was abuzz with callers lamenting the potential death of Britain's pub scene, with the tax hike coming less than a year after the government imposed a smoking ban in all public buildings.

"They put more on alcohol because they think there's going to be binge-drinking, but it won't stop. It just stops people going in pubs," said Sarah Thomas, 33, a teacher trainer smoking a rolled tobacco cigarette outside The Goose pub in central London.

From this weekend, alcohol duties will rise by 6 percent above inflation _ meaning an extra 8 cents for a pint of beer, which already costs about $6 in an average London pub.

They will go up around 26 cents for a bottle of wine and a whopping $1.10 a bottle for spirits such as whisky.

The duties will then rise by another 2 percent above inflation in each of the next four years, reversing a trend in previous budgets to keep increases low for most alcohol products. Duties on spirits were frozen for the past 10 years to boost British spirit makers' competitiveness, accounting for the large jump this year.

A packet of cigarettes, already a steep $11.20, will rise by 22 cents.

The first budget under Prime Minister Gordon Brown also planned to reward ecologically minded voters by imposing higher taxes on heavier polluting cars from 2010.

The increases _ to be charged at the point of sale and in higher road taxes _ mean that many family cars, along with gas-guzzling vehicles and sports cars will come with larger price tags and be more expensive to drive.

George Osborne, the opposition Conservative Party spokesman said the plans would unfairly target hardworking families who need large vehicles like SUVs.

"Labour's economic incompetence means a rising cost of living for the very people they said they would help," said Osborne.

The government will also begin imposing a charge on single-use plastic bags next year _ a measure already in place in Ireland _ if supermarkets and other stores don't make "sufficient progress" to voluntarily reduce their use by the end of this year.

The government said money raised by a plastic bag levy would go to environmental charities, while that from alcohol and cigarette taxes would help fund a $2 billion package to tackle child poverty.

But Steve Thompson, 39, an air conditioning engineer enjoying a lunch break with a cigarette and a half-pint of beer outside the Melton Mowbray pub in central London, wasn't buying the government's social plan.

"They know that people who are addicted can't quit smoking but they still tax it and get their revenue for it," said Thompson. "They're crooks. They waste taxpayers' money terribly."

Rob Hayward, chief executive of the British Beer & Pub Association, said the government was "shooting itself in the foot" because it would lose revenue if pubs are forced to close.

"The government is punishing all beer drinkers rather than tackling the minority of drunken hooligans," Hayward said.

The Wine and Spirit Trade Association said that as British costs rises faster than in continental Europe, more people will simply go abroad for the cheaper prices, particularly on wine. The new charges will tax wine at nearly $3 a bottle _ the highest in the European Union and well above the 4 cents charged in France.

With Britons already facing rising prices for food and other basic amid the gloom caused by the global credit crunch, the Wine and Spirit Trade Association said the new taxes were a form of punishment.

"It is bizarre at a time when the economy is slowing, prices are rising and many families are feeling the pinch, that the government should choose to add to their burden by making the simple pleasure of a glass of wine or spirits considerably more expensive," said the association's chief executive Jeremy Beadles.

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AP Reporter Regan McTarsney in London contributed to this story.

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Filed by Nicholas Sabloff  |