Brown freezes duty on wine, beer and spirits

Chancellor Gordon Brown has frozen duties on wine, beer and spirits and announced reforms to the VAT system in his budget this afternoon.

He also said the Government would be announcing initiatives to fill vacancies in five industries, including the hotel industry, by "linking the unemployed without skills to jobs that require skills".

On beer, wine and spirits, he said: "This year, an inflation rise would push the price of whisky up by 11p a bottle. Because of the competitive position of the industry I will this year continue to freeze duty on whisky and all spirits.

"And this year I propose to go further and freeze duty on wine and beer."

On VAT, Brown said: "We propose a new regime to simplify VAT for small businesses, which will be of direct help to up to half a million companies.

"For firms with a turnover of up to £54,000, VAT will not be charged at all…For firms with a turnover of up to £100,000, we propose a simpler and lower flat rate which after consultation we will implement next year.

"For firms with a turnover of up to £600,000 we will also consult upon a simplified VAT payments scheme."

He also promised to simplify small business corporate tax and to make annual company accounts the basis for calculating tax, "thus cutting more red tape and cutting business costs once again."

Maternity pay will go up from £60 to £75 next year and to £100 the year after and the statutory period it is paid for will go up from 18 weeks to 26 weeks. Brown said he would extend the help to small companies for administering the scheme, at a cost of £30m.

Martin Couchman, deputy chief executive of the British Hospitality Association, was pleased to see the mention of the New Deal initiative to equip the unemployed with skills to work in hotels. "We look forward to working with the Government on that," he said.

He also welcomed the freeze on duty on wine, beer and spirits, as did Ian McKerracher, chief executive of the Restaurant Association.

He said: "From the restaurateur's point of view it's a good thing because it hasn't put further pressure on margins."

He added: "The extra emphasis on families and increase in maternity pay will clearly have an impact on small businesses, but it's too early to say what that impact will be. We will be watching that carefully."

On VAT reforms, he said: "Any help that's given to small businesses would be very welcome."