Beer manufacturers, pub owners and punters alike have been bracing themselves for higher pint prices (Picture: Getty Images/Metro.co.uk)
Jeremy Hunt has once again frozen alcohol duty, he revealed in today’s Spring Budget.
The Chancellor has laid out his final tax and spending plan before the expected general election, and it seems he’s keen to buy voters a pint.
Well, kinda. The Conservatives are slumping in the polls, the economy tumbled into a recession at the end of 2023 and inflation remains stubbornly high. Borrowing costs, too, with interest rates stuck above 5%.
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Alcohol has been in no way immune to price increases. An average pint will set someone back about £4.69, according to official figures. Twenty years ago, it was £1.56.
The Chancellor previously froze the levy on alcoholic drinks until August 2024 in his Autumn Statement. And he’s not keen to thaw it out anytime soon.
‘Without any action today, it would have been due to rise by 3%,’ Hunt told the House of Commons, adding that he heard from MPs and council officials about the ‘pressures’ facing the industry.
‘Today, I’ve decided to extend the alcohol duty freeze until February 2025,’ Hunt added as an MP shouted: ‘This isn’t going to save your seat.’
Hunt continued: ‘This benefits 38,000 pubs across the UK. And on top of the £13,000 saving a typical pub will get from the 75% business rate discount I announced in the Autumn.
‘We value our hospitality industry and are backing the great British pub.’
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This was a relief, to say the least, for the wine and spirits industry after the government’s previous alcohol duty regime brought the largest tax rise for almost 50 years.
‘The Chancellor has raised the spirits of distillers, hospitality businesses and consumers alike,’ said Stephen Russell, the founder of Copper Rivet Distillery and spokesperson for the UK Spirits Alliance.
‘Maintaining the freeze announced in the Autumn is good news for spirits-drinkers, good news for pubs and bars and the wider economy, and good news for the Treasury as it will enhance revenue for the Exchequer.’
Not everyone was pleased, however.
Dr Katherine Severi, the chief executive of the Institute of Alcohol Studies, said keeping the tax frozen stiff will damage the economy as alcohol remains one of the biggest risk factors for ill health and death among workers.
‘Alcohol duty freezes over the past decade have led to alcohol becoming much more affordable, with it now being at its most affordable level since before Rishi Sunak was born,’ she said.
Hunt delivered his final budget ahead of the general election (Picture: Simon Dawson/No 10 Downing Street)
‘This is a political choice that has directly led to increases in alcohol consumption and subsequent deaths.’
‘Let’s be clear, this is a tax break for the multinational alcohol industry, meaning the government has chosen big business over the taxpayer,’ she added.
Beer bosses wrote to Hunt last month warning that hundreds of pubs could go bust if alcohol duty – a tax paid by alcohol-makers and included in the price tag – isn’t slashed.
Industry leaders have previously said supply chain issues have led to hefty price increases, as have glass recycling fees.
It’s the cost of spirits, however, that has especially hit them hard. Spirits make up one-third of drinks sold in bars, pubs and restaurants but the alcohol tax on them is higher compared to beer.
‘No government should turn a blind eye to the erosion of such an integral economic and cultural asset,’ bar and brewery chiefs said in the letter.
Nine in 10 London pubs have increased the price of alcoholic beverages prices in the last six months all while fewer Londoners eat and drink over rising costs.
This is a developing news story, more to follow soon… Check back shortly for further updates.
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