Autumn Budget 2017

Beer duty frozen by Chancellor in Autumn Budget

By James Beeson contact

- Last updated on GMT

Tax freeze: the news will bring some relief to the industry, which had been campaigning for a cut in duty
Tax freeze: the news will bring some relief to the industry, which had been campaigning for a cut in duty

Related tags: Beer duty, Alcoholic beverage, Public house, Beer, Chancellor

Chancellor of the Exchequer Philip Hammond has announced a freeze in beer duty in his Autumn Budget, unveiled in Parliament yesterday (22 November).

Hammond announced that all alcohol duties will be frozen, rather than increasing by RPI as originally planned, while a new duty band is set to be introduced in 2019 from 6.7% to 7.5% ABV to target cheap, high-strength white ciders.

Announcing the freeze, the chancellor said: “Excessive alcohol consumption by the most vulnerable people is all too often through high-strength, low-quality products, especially so-called white ciders. 

"Following our recent consultation we will legislate to increase duty on these products from 2019, but recognising the pressure on household budgets and backing our great British pubs, duties on other ciders, wines, spirits and on beer will be frozen. This will mean a bottle of whisky will be £1.15 less than in 2018 than if we had continued with Labour's plans, and a pint of beer 12p less."

It is estimated that the freeze will cost the Government almost £1.2bn by 2023. 

The news will bring some relief to the industry, which has been campaigning for a cut in duty to help Britain’s struggling pubs.

More action still required

Responding to the freeze in duty, SIBA chief executive Mike Benner said: "SIBA’s 850 brewery members will be delighted by the chancellor’s announcement that he will freeze beer duty in this Budget, recognising the important role of the great British pub. This is great news for brewers, pubs and consumers alike.

"We’d now like to see the chancellor go further and commit to a freeze in beer duty across the entire Parliament. An extension by one more year of rate relief for pubs and a move to CPI from RPI is also welcome but more action is still required.

"While news for our sector has been positive from the chancellor, brewers and pubs still face a tough trading period ahead, with uncertainty around Brexit, and worsening growth and productivity figures. For now, though we will raise a glass of craft-brewed British beer to the chancellor."

 The British Beer & Pub Association (BBPA) also welcomed the move. Chief executive Brigid Simmonds said: “The chancellor’s decision to freeze beer duty and cancel his planned rise is an early Christmas present for beer drinkers and pubgoers worth £117m this year and in subsequent years. It will secure over 3,000 jobs in pubs and the wider beer supply chain that would otherwise have been lost.

"This real-terms duty cut shows he has listened to our campaign and the concerns of pubs and pubgoers, and acknowledged the special role that beer and pubs play in the nation’s social life."

Appeal to brewers

CAMRA national chairman Colin Valentine added: “Pubgoers were fearing the worst from this Budget, but will now be raising a glass. Freezing beer duty will help arrest rising beer prices and keep the British pub-going tradition affordable. I will be celebrating this decision in my local this evening and I hope millions of beer lovers across the country will be doing the same.

"Now, to make a real, lasting difference we hope that this move represents the first step towards a long-term freeze. CAMRA is calling on brewers to match the chancellor's support by holding beer prices so that local pubgoers benefit."

Earlier this week, it was reported that 46% of the UK public supported freezing or reducing beer duty​, according to a new YouGov poll.

The poll was commissioned by the British Beer & Pub Association (BBPA), which has been campaigning for the cut alongside a number of MPs and the TaxPayers Alliance.

Related topics: Beer

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