Chancellor Jeremy Hunt has frozen alcohol duty until August 2024 in his Autumn Statement. He stated that: “for many people going to the pub has become more expensive” and that having listened closely to various MPs, a Councillor in his constituency, and The Sun newspaper, “I have decided to freeze all alcohol duty until 1 August next year; that means no increase in duty on beer, cider, wine or spirits.”
The Treasury estimates the cost of the alcohol duty freeze at £310m.
In the Autumn Statement publication (p.95) it states that: “The government will freeze alcohol duties until 1 August 2024 and delay its annual uprating decision to Spring Budget 2024 to give businesses time to adapt to the duty system introduced on 1 August 2023.”
Since duty was uprated with inflation in August 2023, it would have been a surprise for the Autumn Statement to have announced another uprating, as we discuss in a recent blog on the decision (as well as why freezing duty is bad for pubs and an uprating next year may be unlikely).
In Drink and Drug News, the AHA’s Professor Sir Ian Gilmore stated that it is:
utterly frustrating news. Freezing duty makes alcohol cheaper to buy in real terms. We know that the cheaper alcohol is, the more is consumed, and the more damage done. Cheap alcohol has unquestionably played a part in the record number of alcohol-related deaths and hospital admissions we are now experiencing. Reintroducing the alcohol duty escalator from 2008 to 2014 – which increased duty by 2 per cent above inflation each year – would save lives, help hospitality, and contribute to Treasury revenue.
Alcohol Change UK’s Dr Richard Piper said it was “astonishing” that the government had frozen alcohol duty again, calling it “a tax cut for wealthy alcohol producers”:
Alcohol harm costs all of us taxpayers around £21bn per year and it’s not acceptable that the government is failing to recoup this cost from those who profit from alcohol harm. We need the government to urgently reconsider this decision and remove the freeze on alcohol duty. With alcohol liver deaths rapidly rising, with no signs of that falling back, we desperately need bold action from the government to stop more lives being needlessly lost.
A YouGov survey for The Times found that the freeze was the least popular decision made in the Statement among the public, with only 38% of people support the decision and 47% saying it is the wrong priority for the country at the present time.
Emma McClarkin, chief executive of the British Beer and Pub Association, welcomed the freeze along with an extension of business rates relief for pubs, saying the measures would be worth £350m to the sector. But she warned that increases to the National Living Wage would add costs of £240m to pubs “at a time when we are struggling to not pass on costs to the consumer”.
The pub needs to remain affordable for all and we remain open to working with the government to ensure our pubs and brewers have the support they need to keep investing in people and places and providing much needed boost to local economies.
Wine and Spirit Trade Association (WSTA) chief executive Miles Beale also welcomed the freeze in alcohol duty, saying it came as “a huge relief” to a sector that had “taken a battering” in recent years.
The Daily Mail quoted Beale as saying:
We implore the Chancellor and his team to lock in the freeze until at least the end of this Parliament. This will keep people in jobs and mean consumers will still be able to enjoy a drink at a price they can afford.
The Sun quotes Diageo GB boss Nuno Teles who said:
Today we raise a glass to the Chancellor and the Prime Minister. They have listened to the industry’s plea for support and decided to back our homegrown sector, that employs so many people across the UK.
GB News discussed that some landlords have voiced concern about freezing duty, with one saying:
To be honest, freezing duties won’t save any money at all. The only thing that will help us at all is a VAT reduction. Freezing duties will save pennies. It goes through so many hands before it gets to us. I know that sounds pessimistic but that’s the reality of it.
Another labelled Hunt’s announcement “rubbish” and argued the government is only interested in big business.
Welcoming the duty freeze, Conservative MP Greg Smith told GB News:
Pubs are still struggling in the post pandemic world and need all the help they can get. Particularly in rural communities, pubs are so much more than a place to enjoy a pint but hubs for the whole community. It is essential duties are frozen or cut.