BEER, cider, wine and spirits will go up in price after the Chancellor reversed duty freezes today.
Jeremy Hunt made an emergency statement this morning where he ditched almost all of Liz Truss’ mini budget from last month.
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Just weeks ago, Kwasi Kwarteng had binned planned hikes to duty rates for beer, for cider, for wine, and for spirits.
But as part of plans to raise £32billion of cash and help stabilise the markets, that will not go ahead as planned.
Alcohol duty rates will now rise in line with RPI – the retail price index – but they were going to be frozen.
Alcohol duty usually rises in line with the Retail Price Index of inflation, which currently sits at 12 per cent – the highest since the 1980s.
It will save the Treasury around £600million this year.
It’s likely to be the equivalent to 7p on a pint of beer, 4p on a pint of cider, 38p on a bottle of wine and £1.35 on a bottle of spirits.
The Chancellor announced this morning as he ripped up nearly all of his predecessor’s plans:
The entire package will save £32billion a year for the Treasury – which will at least be half of the £60billion the IFS said needed to plug the gap in the finances.
The industry reacted with fury to the Chancellor’s plans on alcohol duty today.
Mark Kent, Chief Executive of the Scotch Whisky Association, said: “Business can only work on the basis of certainty and stability. That has been stripped from the Scotch Whisky industry following the Chancellor’s decision to U-turn on the duty freeze for Scotch Whisky announced just over two weeks ago.
“Time after time, duty freezes on spirits have increased government revenue contrary to what the Treasury’s forecasts have predicted. The industry has been an economic anchor, even in times of volatility.”
Emma McClarkin, Chief Executive of the British Beer and Pub Association hit out: “The Chancellor’s decision today to reverse the Alcohol Duty freeze is a huge blow to brewers and pubs.
“The freeze would have delivered a £300million saving to our industry at a time when we desperately need any relief we can get, to help to keep a lid on spiralling costs and keep the price of pint affordable for pub goers this winter.
“The cost of doing business is completely out of control for pubs and brewers and the failure to act today to reduce pressures on businesses will hit them extremely hard.
“Our sector needs stability to plan and be able to keep serving communities at a reasonable price, but instead has been subject to ongoing uncertainty for too long.
“Waiting until a February budget to ease these pressures will be too late, we need the Chancellor to act before Winter really starts to bite for our brewers, pubs and the customers and we lose them forever in communities across the UK.”
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Mr Hunt said earlier today that “there will be more difficult decisions to take on tax and spending” – in a hint of more pain to come.
The Office for Budget Responsibility will lay out their spreadsheets of what this means about the nation’s finances on October 31 as planned.
Mr Hunt will also lay out more fiscal changes then too “to put the finances on a sustainable footing”, the Treasury said.
And ALL departments will be expected to submit their plans for cuts to their budget by the end of the WEEK.
