Government ‘considering scrapping alcohol duty freeze’

03-Jul-2018 - Last updated on 03-Jul-2018 at 08:59 GMT

Freeze frame: the Government could start raising duty on alcohol again

Reports have suggested that the Government is minded to scrap the freeze on alcohol duty introduced last year.

The Guardian has suggested that the move may be taken in a bid to free up £200m for further spending plans,.

The same report suggests the Government is also planning to lift the eight-year freeze on fuel duty.

The prime minister has come under pressure to give additional cash to other departments after pledging an extra £20bn for the NHS by 2023. She is also under pressure to find more money for defence and policing.

Growing deficit hole

Carl Emmerson, deputy director of the Institute for Fiscal Studies, told the Guardian: “If they don’t [lift the freeze] the deficit hole will get even bigger. The challenge of finding the money for the NHS, keeping the public finances on the track the chancellor might want, would all be harder if you continued freezing it.

“I presume that the Treasury is finding it difficult to say we can just squeeze spending in areas such as defence or schools or justice or working age welfare. That leaves them the option of either ditching the deficit target and borrowing more, or going for some tax rises.”

Taxpayers contribution

A Treasury spokesperson said: “As the prime minister and chancellor have made clear, taxpayers will have to contribute a bit more, in a fair and balanced way, to support the NHS we all use. We will listen to views about how we do this and will set out plans at future fiscal events.”

Brigid Simmonds, chief executive of the British Beer & Pub Association, told MCA: ”I can understand why raising tax on beer sounds easy. But, when you pay 40% of the total beer tax in Europe and only consume 12% of the product and only the Finns pay more tax than we do, more tax rises will damage a British manufacturing industry which contributes £23bn to the economy and supports 900,000 jobs and footfall in pubs where 70% of alcoholic drinks sold is beer.

”Consumers will vote with their feet and more pubs will close. Our message must be, if you care about local communities, international investment and the great British pub, don’t raise duty on beer.”