Watch Live: PMQs and Chancellor Jeremy Hunt delivers budget
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There was a collective cheer among drinkers as a “Brexit pubs guarantee” promised to slash the price of a pint. Tax on draught beer will remain frozen from August 1 in a move that cuts the cost of pouring beer. It means duty on ale, cider and lager in much-loved locals will be brought in line with much cheaper supermarket booze. Drinking a properly pulled pint will become more affordable.
Chancellor Jeremy Hunt said the move would have been forbidden if we were still in the European Union and hailed Brexit as helping an adored UK institution, the “great British pub”.
He said: “I will do something that was not possible when we were in the EU and significantly increase the generosity of draught relief.
“From August 1 the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets, a differential we will maintain as part of a new Brexit pubs guarantee. British ale may be warm, but the duty on a pint is frozen.”
The move comes as the pub and hospitality sector continues to reel amid a perfect storm of the fallout from Covid, price hikes and an alarming rate of closures.
The pandemic, ongoing cost-of-living crisis and supply chain chaos has seen hundreds of hostelries shut their doors permanently.
This includes a slew from the Wetherspoons stable and brewing giant Marston’s, which put 61 pubs up for sale last week, including The Crooked House in Dudley, West Midlands, affectionately known as Britain’s wonkiest boozer.
The move to increase the generosity of draught relief will help protect community pubs large and small and would not have been possible if Britain was still abiding by rules and regulations pumped out of Brussels.
And, in a further boost, the historic Windsor Framework deal recently struck by Prime Minister Rishi Sunak means the changes also apply to every pub in Northern Ireland.
It was a tonic to Mick Harris, 60, landlord of the Good Intent in Petersfield, Hants, who said current trading conditions were the worst he had known.
Raising a glass to toast the news, he said: “Things are so tight that any saving we can make at the moment is good, but I’d rather do this sooner than later because everything has gone up – in fact it’s doubled.
“At the moment we are not making money. The last two months have been the worst since I have been here.
“We are simply surviving and I just hope it picks up. It’s just a case of keeping our heads above water because it’s all we can do.”
Although the Budget was toasted in boozers, Mr Hunt hammered millions of wine lovers with a tax raid that could see the price of some popular tipples rise by almost 50p a bottle.
It means alcohol duties will rise with inflation as the Government reforms the levies based on a drink’s alcohol strength.
Industry figures warned the twin changes – after levies were frozen last year to help firms – could mean a 20 per cent increase in tax on drinks including red and white wine, adding 44p to the cost of an average bottle.
Duty on Scotch whisky rose by 10.1 per cent in one of the largest tax hikes in recent decades, meaning the rate on spirits will rise to £31.64 per litre of pure alcohol.
The average price of a bottle of Scotch is £15.22, with £11.40 collected in tax through duty and VAT.
And it was bad news for smokers. The cost of cigarettes last night hit £11.80 after Mr Hunt slapped another huge tax hike on tobacco. The price of a packet of 20 will go up by £1.15.
UKHospitality chief executive Kate Nicholls said: “The reduction in draught duty is positive and we hope this will incentivise more visits to our pubs, restaurants and hotel bars.
“Addressing draught duty is a good start and I would urge the Government to consider rolling out this type of tax cut across the wider drinks market.
“With duty primarily paid by suppliers, such as breweries, it is essential any benefit is passed through to venues to help deliver the Government’s objective of reducing inflation and growing the economy.”
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