George Osborne will said there will be no increase in beer duty in today’s Budget
Beer taxes were frozen in today’s Budget by George Osborne.
The Chancellor has cut beer duty by 1p duty cut in his last three Budgets. But the £4billion hole in the public finances has prevented him cutting again.
The freeze still means an effective cut because duty has not gone up with inflation.
Drinkers already pay 52p per pint in tax, one of the highest rates in Europe.
In his Budget today, Mr Osborne said: ‘The action we took in the last Parliament on beer duty saved hundreds of pubs and thousands of jobs.
‘Today I back our pubs again. I am freezing beer duty and cider duty too.
‘Scotch Whisky accounts for a fifth of all of the UK’s food and drink exports.
‘So we back Scotland and back that vital industry too, with a freeze on whisky and other spirits duty this year.
‘All other alcohol duties will rise by inflation as planned.’
Mr Osborne’s decision means wine and other alcohol will go up in price as taxes and duties rise in line with inflation.
Turning to other so-called ‘sin taxes’, Mr Osborne revealed duty on hand rolled tobacco will increase by inflation plus 5 per cent plus inflation in recognition more and more people are using instead of regular packs.
The changes will mean tobacco taxes will add 21p to a pack of 20 cigarettes and 44p to a 30g pack of hand-rolling tobacco.
Free betting promotions online are to be brought into line with additional restrictions in place in bookies.
Business Secretary Sajid Javid raised hopes of another cut in beer duty in the House of Commons yesterday.
He said there are ‘lots of reasons to cut beer duty’ when challenged about the Government’s support for the beer industry.
Miles Beale, chief executive of the Wine and Spirit Trade Association, said 25 million spirits consumers would welcome the spirits duty freeze, but expressed disappointment that 30 million wine drinkers had been ‘singled out for a duty rise’.
He said: ‘The freeze in wine duty in 2015 has resulted in £118 million extra in revenue to the Treasury in the last 10 months, up 4%, which makes it very unfair that wine has been penalised.
‘We also deeply regret that the Government has missed this important opportunity to support the emerging English wine industry, which is a real home-grown success story that needs nurturing rather than being hit by another unfair tax increase.’
Mr Osborne has continued protection for single malt whisky, which he said were a crucial industry for Britain
The Scotch Whisky Association (SWA) also welcomed the freeze, but said tax remained ‘too high’ at 76%.
SWA chief executive David Frost said: ‘We welcome the freeze in excise duty on spirits. We hope that this will sustain continued growth in the UK market for Scotch whisky and thus help improve the public finances.
‘But tax is still 76% of the price of an average bottle of Scotch and the majority of the British public think that is unfairly high. We will continue to call for fairer taxation of Scotch, a vital UK industry, and we urge duty reductions in future years.’
Meanwhile the charity Action on Smoking and Health ‘warmly welcomed’ the increase in tobacco taxes.
Ash chief executive Deborah Arnott said: ‘This is excellent news and we’re delighted the Chancellor has heeded the calls of the health community to further raise tobacco taxes, to reduce the incentive for smokers to downtrade to cheaper products.
Hand rolling tobacco will see steep rises in duty as the Chancellor looks to raise additional money from changing habits
‘The new tax structure will increase the effectiveness of taxation and encourage more people to quit. It will also help close the gap in health inequalities.’
Conservative MP Andrew Griffiths asked if Mr Javid could have a word his close ally Mr Osborne.
The Burton MP, a champion of the beer and pub industry, said: ‘Given your support for the brewery industry when you were in the Treasury, being the man who led the call for the duty cut, will he outline what his department is doing to support the beer and pub industry and will he pick up the phone and ask the Chancellor for another cut?’
Mr Javid replied: ‘I’ve heard him loud and clear on a further cut. I know he’s made his representations to the Chancellor.’
‘I do recall when I was the economic secretary I did get a beer named after me, Sajid’s Choice, which was a fine brew, so there is a lot of reasons to cut beer duty.’