Alcohol freeze to back ‘the great British pub’
Chancellor Jeremy Hunt announced an extension to the freeze on alcohol duty to February 2025 in the Budget, declaring that the government was backing “the great British pub”.
The move has been welcomed and will benefit 38,000 pubs across the UK. However, there have also been vocal calls for more support for the hard-pressed hospitality sector.
And there was widespread disappointment that Mr Hunt didn’t go further and reduce the industry’s VAT burden. He also had nothing to say about business rates.
Emma McClarkin, chief executive of the British Beer and Pub Association, called the freeze good news for brewers, pubs and consumers, but has warned that the hospitality trade is on a “cliff edge”.
She said: “This April brewers and pubs still face a £450million cliff edge of spiralling wage costs and business rates increases, particularly those pubs that are larger or food-led.
“It is disappointing that the chancellor did not choose to go further with a cut duty, reduce VAT or cap the increase to the business rates multiplier which would have helped mitigate the huge cost of doing business.
“Pressures on our sector remain acute with margins being squeezed to the point where we fear it is likely that a further 500-600 pubs are likely to close this year on top of the 530 that closed in 2023.
“No government should turn a blind eye to the erosion of such an integral economic, social and cultural asset and it is vital that at the election the political parties commit to putting in place a fiscal and policy framework that will see our sector thrive for the long term and not continue to deteriorate”.
She added: “We very much hope that the decision to cut National Insurance contributions for all workers by 2p in the pound will boost consumer spending power and encourage people to enjoy an extra pint in their local.
“But I urge the government to look again at the urgent measures needed to make the cost to doing business more affordable at the next fiscal event and through policy commitments made in the run up to the election to truly back the British pub.”
The Heineken brewery also called for more help. A spokesperson said: “Licensees across the UK now need further help to thrive, in the form of long-term, fundamental reform to the business rates system which despite recent support still sees UK pubs overpaying by £400m.”
Mr Hunt announced that fuel duty will remain at its current rate and be frozen for the next 12 months.
And he has also extended the “temporary” 5p cut on fuel duty, which was set to end this month. The moves will help motorists and businesses with road transport overheads.
In his statement Mr Hunt also revealed the OBR expects inflation to fall below the two per cent target in just a few months – a year earlier than forecast in the autumn statement.
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