Alcohol duties were frozen for the second year running, making 2020’s spring Budget the seventh year out of the last eight that alcohol duties failed to keep up with inflation.
According to the Office for Budget Responsibility’s costings, the freeze in alcohol duties – a cut, in real terms – are estimated to cost just over £1bn to the year 2024–25.
Exchequer’s impact of alcohol duty changes on HM Treasury revenue (£million)
In his statement to parliament, Chancellor of the Exchequer Rishi Sunak also promised to lobby the United States Government to remove tariffs on Scotch Whisky imports, and to help small pubs by increasing their business rates discount fivefold (from £1,000 to £5,000) for the coming fiscal year.
Further alcohol-related policy actions from HM Treasury include the publication of its review into Small Brewers Relief in the spring, and launching a call for evidence of potential reforms to the duty system after the United Kingdom’s transition period for leaving the European Union (EU) by the summer.
Responding to the announcements, IAS Chief Executive Katherine Severi said:
‘It is disappointing that the chancellor has cut alcohol duty in real terms in today’s Budget. It is a short-sighted move that will cost the public purse another £1 billion over the next five years, on top of the £6 billion it was already set to lose due to previous duty cuts. That is money that could have been used to relieve pressure on an NHS facing record numbers of alcohol-related admissions every year.
‘This decision calls into question this government’s commitment to supporting our health and social care services as they continue to struggle with the consequences of cheap alcohol. It also represents a step backwards in tackling health inequalities: people from disadvantaged backgrounds are over-represented among the estimated 2,000 additional alcohol-related deaths resulting from recent duty cuts.
‘We will continue to press the government to put an end to the harms linked to the ultra-cheap alcohol that blights some of our poorest and most vulnerable communities.’
— IAS (@InstAlcStud) March 11, 2020