Budget hits smokers and drinkers

Smokers and drinkers were hit by an increase in duty in today's Budget.

14:16 16 March 2005

The cost of a packet of cigarettes will increase by 7p tonight following Gordon Brown's ninth Budget statement.

The chancellor told MPs that because of ongoing public health concerns, cigarettes would not escape the annual inflation rise. Beer duty will also increase by 1p per pint and a bottle of wine will go up by 4p.

Spirits remain the same along with sparkling wine and there was no mention of any changes to income tax. Fuel duty increases were also suspended until September, which will be welcomed by motorists.

There was good news for savers, as the ISA tax-free thresholds will remain the same until 2010. Pension credit will rise by 13 per cent by 2008 and the personal income tax allowance will rise to 4,895.

Anyone struggling to get on the housing market will be pleased to hear that the stamp duty threshold is to be raised from 60,000 to 120,000. The move should leave thousands of people exempt from the property tax.

The chancellor announced an increase in child tax credit of 13 per cent over the next three years. Three million of the UK's families with children will receive more in tax credits than they pay in income tax by the end of this process, he declared.

Mr Brown said his Budget would leave "every family in Britain is better off".