Philip Hammond has announced a freeze on alcohol duty, rather than the previous strategy of increasing duty in line with inflation.
In today’s Budget announcement the Chancellor outlined plans to increase duty in 2019 on high-strength alcohol – particularly white cider – in order to tackle excessive alcohol consumption, but he said duties on other cider, wines, spirit and beer would be frozen.
In his statement in the House of Commons today he said: “Recognising the pressure on household budgets and backing our great British pubs, duties on other ciders, wines, spirits and on beer will be frozen. This will mean a bottle of whisky will be £1.15 less in 2018 than if we had continued with Labour’s plans.”
Miles Beale, chief executive of the Wines and Spirit Trade Association, said: “We are pleased that the Chancellor has found his festive spirit and listened to the call from the WSTA and its members and has frozen wine and spirit duty. He has shown the Government is in touch with what consumers want and is supporting an industry that is proving to be a real asset to British business. He has recognized that rebalancing the UK’s excessive duty rates is a win/ wine for both the Treasury, the wine and spirit trade – not to mention consumers. This decision will be celebrated by millions who raise a glass this festive season.”
The WSTA had been calling on the Chancellor to freeze duty after a hike of 3.9% for wine in March this year, which added 8p to a bottle of still wine and 10p to sparkling. Beale said a second rise in duty this year would have hit businesses hard.
The WSTA has calculated that the change in government policy will save the wine and spirit industry around £247 million. It is only the second time in 15 years that wine duty has been frozen.
Suppliers in the drinks industry also welcomed today’s news.
Bruce Ray, vice president corporate affairs for Carlsberg UK, said: Today’s announcement about a freeze in beer duty will be welcomed by brewers, publicans and everyone who enjoys a glass of beer. This year’s cut will support continued innovation and investment, create new jobs, attract tourists and ultimately benefit our beer-loving nation. This is a wonderful achievement secured through cross-industry work, and we are pleased that government has recognised that a thriving and prosperous beer and pub industry is what our nation needs.”
And Charles Ireland, managing director, Diageo Great Britain, agreed today’s announcement is good news but he said the company is repeating its call for a review of the alcohol duty system.
He said: “The duty freeze provides some respite for britain’s drinkers, although taxes on spirits remain amongst the highest of any major economy in the world. We have been greatly encouraged by the fantastic support of Parliamentarians from all parties, especially Ruth Davidson, David Mundell and the other Scottish Conservatives MPs, who have called for a fairer deal for Scotch and spirits: an industry that generates £5 billin of exports and employs 50,000 people. We now repeat our call for a review of the alchohol duty system to deliver fairness for Scotch whisky, which is exactly the kind of unique British product the UK needs to thrive after Brexit.”
Also in this Budget, Hammond stated that the minimum wage will rise 4.4% from £7.50 an hour to £7.83.
He explained that the Government is on a mission to create: “An outward looking free-trading nation; a force for good in the world.
And he added: “This government will continue its relentless focus on getting people into work.”