The Chancellor has taken action to freeze duty on spirits and cider and cut beer duty by 1p per pint, in a Budget which was more favourable to alcohol than tobacco.

George Osborne scrapped the alcohol duty escalator, with wine duty set to rise in line with inflation, while spirits and cider will get a duty freeze.

Association of Convenience Stores chief executive James Lowman said: “We welcome the scrapping of the alcohol duty escalator and the decision to reduce beer duty by 1p, which will benefit consumers and reduce some of the pressure on local shops losing trade to the illegal market.

“However, there remains a significant illegal market in alcohol products, and we will continue to press for more focus on catching illegal sellers and tougher penalties once they are caught.”

Tobacco duty will rise by 2% above inflation and will continue to do so until the next Parliament. “This escalator was due to end next year – but there are no sound health reasons to end it, so it will be extended for the rest of the next Parliament,” Osborne said.

Debbie Corris, spokeswoman for the Tobacco Retailers’ Alliance, said: “Every time the government raises the tax on tobacco, it plays in to the hands of tobacco smugglers who make more money selling their illegal product here compared to anywhere else in the EU.” 

However, Osborne scrapped the 2% fuel duty rise planned for September, meaning fuel will be “20p per litre cheaper than it would’ve been under the last government,” he claimed.

He also announced plans to double the Annual Investment Allowance to £500,000 from April 2014 until the end of 2015. 

”We know that over a quarter of independent shop owners currently have plans to invest in their shop and this measure will help them to do so,” Lowman said.

The £2,000 employment allowance will come into effect in April, and corporation tax will be cut to 21%.