Watch Live: PMQs and Chancellor Jeremy Hunt delivers budget
There was a collective cheer among drinkers as a “Brexit pubs guarantee” promised to slash the price of a pint. Tax on draught beer will remain frozen from August 1 in a move that cuts the cost of pouring beer. It means duty on ale, cider and lager in much-loved locals will be brought in line with much cheaper supermarket booze. Drinking a properly pulled pint will become more affordable.
Chancellor Jeremy Hunt said the move would have been forbidden if we were still in the European Union and hailed Brexit as helping an adored UK institution, the “great British pub”.
He said: “I will do something that was not possible when we were in the EU and significantly increase the generosity of draught relief.
“From August 1 the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets, a differential we will maintain as part of a new Brexit pubs guarantee. British ale may be warm, but the duty on a pint is frozen.”
Jeremy Hunt has announced tax on draught beer sold in pubs across the UK will remain frozen (Image: Getty)
The move comes as the pub and hospitality sector continues to reel amid a perfect storm of the fallout from Covid, price hikes and an alarming rate of closures.
The pandemic, ongoing cost-of-living crisis and supply chain chaos has seen hundreds of hostelries shut their doors permanently.
This includes a slew from the Wetherspoons stable and brewing giant Marston’s, which put 61 pubs up for sale last week, including The Crooked House in Dudley, West Midlands, affectionately known as Britain’s wonkiest boozer.
The move to increase the generosity of draught relief will help protect community pubs large and small and would not have been possible if Britain was still abiding by rules and regulations pumped out of Brussels.
And, in a further boost, the historic Windsor Framework deal recently struck by Prime Minister Rishi Sunak means the changes also apply to every pub in Northern Ireland.
It was a tonic to Mick Harris, 60, landlord of the Good Intent in Petersfield, Hants, who said current trading conditions were the worst he had known.
Raising a glass to toast the news, he said: “Things are so tight that any saving we can make at the moment is good, but I’d rather do this sooner than later because everything has gone up – in fact it’s doubled.
“At the moment we are not making money. The last two months have been the worst since I have been here.
“We are simply surviving and I just hope it picks up. It’s just a case of keeping our heads above water because it’s all we can do.”
Although the Budget was toasted in boozers, Mr Hunt hammered millions of wine lovers with a tax raid that could see the price of some popular tipples rise by almost 50p a bottle.
It means alcohol duties will rise with inflation as the Government reforms the levies based on a drink’s alcohol strength.
Industry figures warned the twin changes – after levies were frozen last year to help firms – could mean a 20 per cent increase in tax on drinks including red and white wine, adding 44p to the cost of an average bottle.
Duty on Scotch whisky rose by 10.1 per cent in one of the largest tax hikes in recent decades, meaning the rate on spirits will rise to £31.64 per litre of pure alcohol.
The average price of a bottle of Scotch is £15.22, with £11.40 collected in tax through duty and VAT.
And it was bad news for smokers. The cost of cigarettes last night hit £11.80 after Mr Hunt slapped another huge tax hike on tobacco. The price of a packet of 20 will go up by £1.15.
UKHospitality chief executive Kate Nicholls said: “The reduction in draught duty is positive and we hope this will incentivise more visits to our pubs, restaurants and hotel bars.
“Addressing draught duty is a good start and I would urge the Government to consider rolling out this type of tax cut across the wider drinks market.
“With duty primarily paid by suppliers, such as breweries, it is essential any benefit is passed through to venues to help deliver the Government’s objective of reducing inflation and growing the economy.”
COMMENT BY EMMA McCLARKIN
This Budget was a make-or-break moment for pubs and brewers who have been running out of road for too long.
While the Chancellor’s efforts to support them are welcome, we look forward to seeing how the “Brexit pubs guarantee” will deliver for our sector.
The cut to draught duty as part of the alcohol duty reform is positive and we hope that it will result in a boost for our pubs this summer.
However, the fact is our industry will be facing an overall tax hike, not a reduction, come August – costing the sector £225million. Duty on non-draught beer will rise and the measures introduced today won’t rebalance the catastrophic impact soaring inflation and unfair energy contracts are having on both pubs and the breweries that supply them.
As April 1 rapidly approaches, businesses are also nervously awaiting what’s next for their energy costs. A lack of support announced yesterday will have a direct impact on their ability to keep their lights on and doors open.
We need the Chancellor to unlock growth opportunities for businesses of all shapes and sizes. We hope his measures on investment, people and skills lay the foundations to allow businesses to continue to create jobs and help regenerate local economies in every part of the country.
The Chancellor highlighted how our pubs are the most treasured community institution and we appreciate his efforts to provide relief, but a lack of immediate support in the Budget will still put the future of many of them at risk.
As they have recognised the importance of our pubs and brewers, we look forward to working with the Government to fix the fundamental issues holding pubs and breweries back, including bus
- Emma Mcclarkin is the Chief Executive of the British Beer and Pub Association.