Jeremy Hunt’s budgetary commitment to cut taxes on draft beer in pubs to protect one of the nation’s “most valuable public institutions” is little more than an attempt to make positive headlines and will do little for pubs in trouble, he said, the Stockport owner. I.
The chancellor made an attempt to appeal to Brexiteers by tying his cut in the excise duty on draft beer to the UK’s exit from the EU, calling the move the “Brexit Pub Guarantee” and stating: “British beer is warm, but the pint fee is frozen.”
But the beverage industry has expressed disdain for Mr Hunt’s triumphant budget announcement foreshadowing the future of the “Great British Pub,” noting that the chancellor “gives with one hand and takes with the other” using other alcohol excise taxes imposed in line with inflation that driving up the price of wine and spirits. He also confirmed that, in accordance with EU legislation, the Ministry of Finance could reduce excise taxes on all types of beer.
Hunt announced that from August 1, the excise on draft beer in pubs will be 11 pence lower than the excise in supermarkets, but the excise on all other alcohol will increase by an average of 10.1%.
Landlord Jamie Langrish runs three pubs in and around Stockport: The Crown in Heaton Mersey, Bakers Vaults in Stockport and Red Lion in Cheadle. He described the budget as “devastating” and said that the increase in taxes on alcohol, combined with the removal of business support measures, meant that the reduction in drafts was just a “drop in the ocean” for struggling pubs.
Minutes after Mr. Hunt’s announcement, Mr. Langrish was questioned by shoppers who wanted to know when he would cut the price of his draft beer.
Upon hearing the headline, they assumed prices would drop 11p immediately. But Mr. Langrish said that was impossible. In fact, with the increase in the excise tax on wine and spirits and the phasing out of the government’s energy bill relief scheme for businesses, he may have to raise prices. (The energy price guarantee, which limits household bills to £2,500 under normal use, has been extended until June.)
The Treasury “clearly chose the headlines [suggesting that] Pints then get cheaper [at the] Supermarket,” Mr. Langrish said.
“Everything rises. It doesn’t affect the price of a pint in any way. Give with one hand and take with the other … It’s really disappointing,” he added.
While Mr Hunt’s statement that tax cuts on draft beer would not be possible if the UK were still part of the EU was technically correct, this is only supported by the fact that EU rules do not differentiate taxes on alcohol based on packaging type. approved by British Beer. and the Pub Association.
This means that the chancellor should have a reduced excise tax on all beer, including beer sold in bottles or cans and draft beer, or ban beer altogether.
Emma McClurkin, chief executive of the BBPA and a former Conservative MEP, said: “This budget has been a defining moment for pubs and breweries that have been off the road for far too long.”
She added: “The reduction in bottling fees as part of the alcohol tax reform is positive and we hope our pubs get a boost this summer.
“But the fact is that in August our industry will face a general increase in taxes, not a reduction. Excises on draft beer will rise and the measures introduced today will not offset the catastrophic impact of rising inflation and unfair energy contracts on the pubs and breweries that supply them.”
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budget announcements included promise of 30 hours of free childcare for children older than 9 months, but phased out until September 2025. Also unexpectedly removed was the cap on the lifetime benefit on pension savings, a freeze on excises on beer in pubs and an increase in the tax on tobacco products, increasing the average price of a pack by 20. The price of cigarettes was reduced from £10.65 to £11.80.
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Source: I News
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