Smoking, drinking get respite in Irish budget

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Irish smokers and drinkers fond of a local pint had some of the chill taken out of their winter after a national budget that left tax on alcohol and cigarettes unchanged and cut duties for small breweries.

“I think there’s a human element to it,” Finance Minister Brian Cowen told reporters late on Wednesday after a budget that showcased the center-right government’s social credentials. “Give them a break - it’s a cold winter out there.”

Huddles of chilly smokers shivering outside pubs and restaurants have become a familiar sight on Irish streets since March when Ireland became the first country in the world to ban smoking in workplaces, pubs and restaurants.

As a result, revenues to the exchequer from cigarette taxes have dropped sharply and some thought the minister might raise duties to help compensate.

But the government is wary of doing anything that might stoke inflation and erode the competitiveness that has turned Ireland into one of Europe’s richest countries from one of its poorest in little over a decade.

Cowen reckons the country has the potential to grow at around 5 percent per year in real terms over the next few years - twice the Euro area average - but can still keep inflation close to the EU average of between 2-3 percent.

But anti-smoking lobby group ASH was unhappy at the price freeze.

“This is a retrograde step by the government in its stated policy of creating a tobacco-free society,” ASH Ireland chairman Luke Clancy said.

“Price increase is established internationally as the single most important factor in encouraging smokers to quit and discouraging young people from experimenting with tobacco.”

One area that could see more people trying something new is the local brewing sector.

Cowen said he planned to cut duty on alcohol produced by microbreweries - small brewers producing hand-crafted drinks - to encourage investment, boost employment and encourage competition in a country famous for one tipple: Guinness.

“I just think there must be more brands out there,” Cowen joked.

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