Alcohol duty frozen until next August

Beer is poured at a beer festivalEPA-EFE/REX/Shutterstock

Alcohol duty has been frozen until 1 August 2024, the chancellor has announced.

Delivering his Autumn Statement in the Commons, Jeremy Hunt said that meant there would be no increase in duty on beer, cider, wine or spirits.

Citing cost-of-living pressures, he said he recognised that "for many people going to the pub has become more expensive".

But tobacco duty has risen, by 2% above the Retail Prices Index inflation rate.

Meanwhile, the duty on hand-rolling tobacco will rise by an additional 10%, to 12% above RPI inflation.

The changes will raise £40m in 2023-24 and £85m in 2024-25, according to Treasury figures.

Earlier this month, the King's Speech, which outlines the government's programme for the current session of Parliament, included plans for a Tobacco and Vapes Bill.

The aim is to introduced a phased ban on smoking, and restrictions on the packaging and marketing of vapes.

The idea, first proposed by Rishi Sunak at the Conservative Party conference in October, is to raise the age at which tobacco products can be bought by a year every year from 2027, so that no one currently aged under 15 can buy cigarettes or tobacco legally.

The Treasury estimates the cost of the alcohol duty freeze at £310m.

Mr Hunt said the government remained committed to its "Brexit Pubs Guarantee", saying that it meant that "duty on a pint is always lower than in the shops".

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.

'Huge relief'

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.

He said a new duty regime, introduced by the government in August this year, had resulted in the largest rise in alcohol tax for almost 50 years, and the latest sales figures showed a "worrying decline".

Wine and spirits had seen a near triple digit increase in inflation in the last three months, the WSTA added, pointing to a rise in supply chain costs and glass recycling fees.

"We are pleased that the frustrations of consumers, who are fed up with never ending price rises, and of businesses struggling with the cost and complexities of the new system have been heeded," Mr Beale said.

UK Spirits Alliance spokesman and distiller Stephen Russell said: "We raise a toast to the Chancellor for his decision to freeze duty and thank him for listening to thousands of distillers, landlords and bar owners up and down the UK.

"He has raised the spirits of the sector, and his decision is a vote of confidence in this vibrant homegrown sector."

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