Chancellor Philip Hammond has announced that beer, cider, and spirits duties will be frozen in this year’s Budget.
HM Treasury forecasts the move will cost the government £35m in the fiscal year to 2019, and a further £880m between 2018/19 and 2023/24.
This measure freezes duties on spirits, beer, still ciders and sparkling ciders below 5.5% Alcohol by Volume (ABV). This measure will be effective from 1 February 2019 for a one-year period. Duty on most wine and higher strength sparkling cider will rise by retail price index (RPI) inflation.
The new band for still ciders rated at between 6.9% and 7.5% ABV – announced by the government in the Autumn Budget 2017 – will also come into effect, although it will mean the duty on cider within that threshold will rise by a mere 0.1 pence per unit at the low end (from 5.4p to 5.5p) and 1.4 pence per unit at the top end (from 5.4p to 6.8p).*
The Chancellor’s announcement follows representations made to the MP for Runnymede and Weybridge from Conservative Party colleagues, and in particular a sustained lobbying campaign from Scottish members of the party.
Responding to the announcements, Professor Sir Ian Gilmore, Chair of the Alcohol Health Alliance, said:
‘The decision to freeze alcohol duty yet again represents a missed opportunity to take pressure off the NHS and other public services, and to protect the most vulnerable in our society.
‘In real terms, this freeze represents a cut in alcohol duty. Alcohol duty cuts since 2013 have already cost the Treasury about £4bn in lost revenue and will now cost another £5bn by 2023. At a time when our public services and specifically alcohol treatment services are under substantial pressure, we cannot afford any more duty cuts.
‘Alcohol is much more affordable today than it was 30 years ago, and alcohol-related harm continues to rise. With 65 people dying every day from alcohol-related causes, there’s an urgent need for Government to take action on cheap alcohol.
‘Increasing alcohol duty is an effective and cost-effective measure to reduce alcohol harm and ease the pressure on the NHS, while raising additional revenue for public services at the same time.’
* 2016 prices
You can listen to John Jolly of drug and alcohol charity Blenheim CDP discuss the effect of the Autumn Budget on treatment services in our October 2018 podcast: