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Drinkers have cautiously welcomed a Budget freeze on alcohol duty – but warned more needs to be done to bring down the price of booze.

Chancellor of the Exchequer Jeremy Hunt announced this afternoon that the tax on beer, wine and spirits would not rise with inflation.

Mr Hunt said the freeze would equate to 2p less on the average pint of beer, 1p less on cider, 10p less on a bottle of wine and 33p less on a bottle of spirits. 

Paul Carter, 37, owns a wholesale alcohol retailer in Gosport, Hampshire with his former police officer wife Jess, 30, and was having a £7.50 pint of Guinness outside The Wheatsheaf pub in Borough Market.

Mr Carter, a former holiday camp manager, said: ‘The freeze on alcohol duty is a really good thing for us. We’re doing clearance alcohol so it’s a really good thing for our business.

‘But drink is still too expensive at the moment. Especially spirits. So it’s a bit of a sticking plaster.’

Paul and Jess Carter, who were enjoying a drink in London, welcomed today's alcohol duty freeze

Paul and Jess Carter, who were enjoying a drink in London, welcomed today’s alcohol duty freeze 

Deb and Jonathan Rowland, from Stafford, said that the alcohol duty freeze 'makes no difference' to them

Deb and Jonathan Rowland, from Stafford, said that the alcohol duty freeze ‘makes no difference’ to them

IT manager John Goater, 57, was having a £5.50 pint of real ale outside of The Market Porter, Borough Market, and backed the freeze

IT manager John Goater, 57, was having a £5.50 pint of real ale outside of The Market Porter, Borough Market, and backed the freeze

The couple set up their business P&J’s Food Wholesalers during the pandemic and said that while they welcomed the freeze, more needs to be done.

Mr Carter said: ‘We need changes to rates, to tax, and everything else around our business operation.

‘Whatever it is, you have to pay it. It’s got to be lowered to support local businesses – especially local pubs.

‘A pub in our town has had to start charging a lot of money to play pool just so they can afford the heating.’

How much could you save?

Hunt says the freeze could mean 

  • 2p less on the average pint of beer
  • 1p less on the average pint of cider
  • 10p less on the average bottle of wine
  • 33p less on an average bottle of spirits

Civil servant Harry King, 30, lives in south-west London and was enjoying a £6.50 pint of lager with his girlfriend and visiting mother.

The Australian-born welfare worker said: ‘It’s good that they are trying to keep it down. It probably needs to come down a little bit more.’ 

IT manager John Goater, 57, was having a £5.50 pint of real ale outside of The Market Porter, Borough Market, and welcomed the freeze.

He said: ‘It’s really good – but I would rather see them take some money off of drink. My village in Buckinghamshire has two pubs and they have both closed down.

‘In London it isn’t as much of an issue but rurally the prices are killing pubs. I think it was just getting too expensive for independents.’

Outside The Roundhouse in Covent Garden, Printer James Taylor said: ‘I think the reason that Hunt has done it is because so many pubs are closing all over the country.

‘You had to do something, putting it up would’ve put another nail in the coffin. They’ve got problems with the VAT. They’ve got other problems. But the price not going up will definitely help.’

His drinking partner Neil added: ‘People want to support other pubs but when their pint costs me £6.50 here and £2.79 elsewhere, that’s not going to help.’

Today it also emerged that the average price of a packet of 20 cigarettes will soar past £16 for the first time after Mr Hunt upped tobacco duty. 

Before the tax increase the mean cost of a packet of 20 stood at £15.26 in January, according to the Office for National Statistics (ONS).

Civil servant Harry King, 30, lives in south-west London and was enjoying a £6.50 pint of lager with his girlfriend and visiting mother. The Australian-born welfare worker said: 'It's good that they are trying to keep it down. It probably needs to come down a little bit more'

Civil servant Harry King, 30, lives in south-west London and was enjoying a £6.50 pint of lager with his girlfriend and visiting mother. The Australian-born welfare worker said: ‘It’s good that they are trying to keep it down. It probably needs to come down a little bit more’

Holistic healer Sean, 59, said that the freeze was simply the Tories trying to win votes

Holistic healer Sean, 59, said that the freeze was simply the Tories trying to win votes

Outside The Roundhouse in Covent Garden, Printer James Taylor said: 'I think the reason that Hunt has done it is because so many pubs are closing all over the country'

Outside The Roundhouse in Covent Garden, Printer James Taylor said: ‘I think the reason that Hunt has done it is because so many pubs are closing all over the country’

Meanwhile, Mr Hunt will introduce a new excise duty on vapes to dissuade non-smokers from taking them up.  

Mr Taylor, a smoker, warned that higher prices could see smokers turn to illicit cigarettes.  

He said: ‘People will just start buying dodgy fake fags. It’s going to go underground, isn’t it.’

Deb and Jonathan Rowland, from Stafford, said that the alcohol duty freeze ‘makes no difference’ to them.

After paying over £15 for a Guinness and a Birra Morretti, construction manager Jonathan, 57, said: ‘We’re gonna go out and drink or not regardless.

Deb, 53, said of the cigarette and vape price rises: ‘Good. They should be taxing these things. I began vaping to stop smoking and then was probably more addicted to that.’

The local government worker added: ‘The vape tax is good especially if it stops the kids from doing it.

‘It took us getting into a relationship for me to stop and I was definitely vaping a lot.’

Holistic healer Sean, 59, said that the freeze was simply the Tories trying to win votes.

Sitting alongside wife Julie at The White Hart, Covent Garden, he said: ‘We are comfortable people so we can afford to drink and we worked hard for that.

‘But the people that need the money, they’re not going to benefit from the freeze in any way whatsoever.

‘The smoking taxes probably need to go up to pay for the health care issues it causes as well. I’m just not sure they’re spending it in the right places.’ 

The Chancellor has announced the extension of the alcohol duty freeze until February 2025, benefiting 38,000 pubs across the UK

Today’s duty freeze – which will benefit 38,000 pubs across the UK – comes after ferocious lobbying from the drinks and hospitality industries who say firms are struggling as consumers tighten their belts and costs rise. 

Mr Hunt, who announced a freeze in the autumn statement until August this year, said it would have been due to rise by three per cent without today’s extension to February of next year.

He said: ‘But I have listened carefully to my Right Honourable Friends for Altrincham and Sale West, the Vale of Glamorgan and my Right Honourable Friend from Moray who is a formidable champion of the Scottish Whisky industry. 

‘I also listened to councillor John Tonks, a strong supporter of the wonderful Admiral pub in Ash, who pointed out the pressures facing the industry. So today I have decided to extend the alcohol duty freeze until February 2025.

‘This benefits 38,000 pubs all across the UK – and on top of the £13,000 saving a typical pub will get from the 75% business rates discount I announced in the autumn.

‘We value our hospitality industry and we are backing the great British pub.’

Emma McClarkin, Chief Executive of the British Beer and Pub Association said:

‘It is good news that the Chancellor was able to extend the freeze to beer duty at this Budget and will be welcomed by brewers, pubs and consumers alike and will go some way to keep the price of a pint affordable.

‘However, this April brewers and pubs still face a £450 million cliff edge of spiralling wage costs and business rates increases, particularly those pubs that are larger or food-led. 

‘It is disappointing that the Chancellor did not choose to go further with a cut duty, reduce VAT or cap the increase to the business rates multiplier which would have helped mitigate the huge cost of doing business.’

Stephen Russell, founder of Copper Rivet Distillery and spokesman for the UK Spirits Alliance, said: ‘The Chancellor has raised the spirits of distillers, hospitality businesses and consumers alike.

‘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.

‘Spirits continue to be the highest taxed alcohol category in the UK – most people are shocked to hear that 80% of a bottle of gin is tax. We have the highest spirits duty rate among G7 nations, despite being a national success story.

‘We look forward to engaging with HM Treasury on how we improve this.’

Scotch Whisky Association chief executive Mark Kent said: ‘The industry welcomes the Chancellor’s recognition of the benefits of continuing the duty freezes beyond August this year.

‘That decision supports the Scotch whisky industry, will incentivise investment and, as with previous cuts and freezes, boost Treasury revenue.

‘With cost pressures hurting our bars and pubs, not to mention hard-pressed consumers, the Treasury has provided some much-needed certainty and stability for the year ahead.’

But he added: ‘Despite this freeze, Scotch whisky is still put at a disadvantage by the duty system, based on a fundamental misunderstanding of how people consume alcohol and modern drinking trends.

‘With today’s freeze cider is still taxed four times less than a spirit like Scotch whisky and responsible consumers who enjoy a Scotch are paying too much tax compared with a beer or cider.’

Pubs and brewers generate £26.2billion for the country's economy and support around 960,000 jobs. Pictured: Jeremy Hunt this morning

Pubs and brewers generate £26.2billion for the country’s economy and support around 960,000 jobs. Pictured: Jeremy Hunt this morning 

Miles Beale, chief executive of the Wine and Spirit Trade Association, said: ‘The wine and spirit sector will be relieved that the Chancellor has spared them a further duty hike. This will help to keep price rises down for consumers for a period.

‘Six months ago, alcohol duty was subjected to the largest increase in almost 50 years. Those tax increases fuelled inflation and had a negative impact on sales, which in turn has seen Treasury lose around £600 million in alcohol revenue.

‘We are pleased that Government has now recognised that duty hikes are bad for businesses, bad for consumers and bad for the Exchequer.’

Mr Beale also added: ‘However, the benefits of a freeze will be short-lived for wine businesses who are fuming after confirmation that costly and fiendishly complex new taxation rules will come into force from February 1 2025.

‘The changes to taxing wine have been described as ‘unadministrable’ and ‘sheer lunacy’ by our members.

‘Scrapping the easement for wine duty will see price increases for 75% of red wines sold in the UK. The Chancellor and his Treasury colleagues should have listened to businesses and kept in place the sensible, simplified procedure for taxing wine. It’s going to be a very costly mistake.’

But campaigners insisted the Budget would do nothing to stop pub closures. 

Dawn Hopkins, Vice-Chair of the Campaign for Pubs and a publican in Norwich said: ‘The Chancellor has now confirmed what UK publicans already suspected, that this Government doesn’t actually give a damn about pubs and is happy to see them continue to close. 

‘There was absolutely nothing for pubs at all in this dreadful budget, which is disastrous considering the situation publicans are facing with the cost-of-living crisis.’

Meanwhile, health campaigners condemned the ‘appalling’ decision at a time of ‘record high’ alcohol-related deaths.

Professor Sir Ian Gilmore, chairman of the Alcohol Health Alliance UK, said: ‘Increasing alcohol duty is one of the most effective ways to increase Treasury revenue, reduce alcohol harm and protect the NHS.

‘It is appalling that once again the Chancellor has passed on the opportunity to boost Government spending and improve public health, in favour of a tax break for the multibillion-pound alcohol industry.

‘At a time when we are experiencing record-high alcohol deaths and public finances are under extreme pressure, increasing duty is fundamental in reducing the burden caused by alcohol.

‘The tax cut afforded to the alcohol industry today is the result of lobbying from powerful multinational corporations. It further highlights the need for an automatic duty escalator to be reinstated to protect the decision from the influence of industry each year.’

Closures continue to blight the hospitality sector, with about 3,000 licensed premises in the past six years, including 509 in 2023, according to the British Beer and Pub Association. 

Pub closures from the end of 2022 until the end of June 2023

Pub closures from the end of 2022 until the end of June 2023

The BBPA has said more pubs closed for good last year than in 2020 or 2021 when Covid-related curbs forced hospitality venues to temporarily shut up shop.

The end of pandemic curbs brought immense relief to the pub trade, yet many sites are fighting for survival owing to their own soaring costs squeezing margins and inflation dampening consumer spending power.

Although the Bank of England expects the UK inflation rate to hit its 2 per cent target and cut interest rates within the coming months, most pubs are paying extra for everything.

Pubs and brewers generate £26.2billion for the country’s economy and support around 960,000 jobs, whether it’s the farmers growing the barley and hops or the pub landlord running the village boozer.

They also help raise considerable amounts of tax, such as excise duty, VAT or corporation tax; the BBPA say £1 in every £3 spent in pubs goes to the exchequer.

Pubs welcomed Hunt’s decision in the Autumn Statement to freeze the so-called business rates multiplier and extend the 75 per cent discount on business rates bills of up to £110,000 in England to April 2025.

Commercial real estate intelligence firm Altus Group estimated the two measures will save the average pub nearly £12,900.

But many pubs want an upheaval of the business rates regime due to its complexity, volatility and tendency to favour online retailers over high street outlets.

Nick Mackenzie, chief executive of Greene King, believes revamping business rates would be ‘the best place to start’ for the government to ‘truly show’ it supports hospitality operators.

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This post first appeared on Daily mail

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