Cheers! Chancellor FREEZES tax on beer, wine AND cider in major budget boost to stop pubs shutting during coronavirus crisis

  • The Chancellor said he was abandoning a planned rise in duty on spirits 
  • Sunak also revealed he would freeze the rates on beer, cider and wine as well
  • Was among measures designed to immunise the high street against coronavirus 

By David Wilcock, Whitehall Correspondent For Mailonline

Published: 13:12 GMT, 11 March 2020 | Updated: 16:13 GMT, 11 March 2020

Drinkers will be raising a glass to Rishi Sunak after he stepped away from increasing booze taxes in the Budget today.

The Chancellor said he was abandoning a planned rise in duty on spirits and would freeze the rates on beer, cider and wine as well.

The announcement was one of a slew of announcements designed to help Britain’s under-pressure High Streets and pubs as they struggle against an expected major coronavirus slowdown in the economy.

The duty freeze is only the second time almost two decades that the Treasury has avoided using drinking as a way to boost its coffers with a rate rise.

Mr Sunak told the Commons: ‘Pubs are at the centre of community life but too many have closed over the past decade. 

The Chancellor said he was abandoning a planned rise in duty on spirits and would freeze the rates on beer, cider and wine as well.

The Chancellor said he was abandoning a planned rise in duty on spirits and would freeze the rates on beer, cider and wine as well.

‘For only the second time in almost 20 years that is every single one of our alcohol duties frozen.’ 

Dayalan Nayager, managing director of Diageo Great Britain, Ireland & France, said: ‘Drinkers across the country will raise a toast to the Chancellor tonight. 

‘The Government’s measures to help the hospitality and retail sectors will also be a welcome move for our customers, their employees and consumers in general.’

Mr Sunak has been lobbied by distillers to cut or freeze rates.

The UK Spirits Alliance pointed out that drinkers can pay more than £10 in alcohol duty and VAT on a £14 bottle of hard liquor, and charities are lobbying for the tax to be increased further, on health grounds.  

Chief executive of the Wine and Spirit Trade Association, Miles Beale said the decision would be good for business and consumers.

He said: ‘While he has not cut duty, it is reassuring to see that in his first Budget as Chancellor, Rishi Sunak has taken steps to address the UK’s excessively high duty rates.

‘He has shown he is in touch with British consumers, from all walks of life, who want to enjoy a drink without getting stung by further tax hikes.

‘In particular the UK’s 33 million wine lovers, a large proportion whom are women, are expressing a sigh of relief after they were singled out for a duty rise at the last Budget.’ 

But the reaction was not totally positive. Franco Sassi, professor of international health policy and economics at Imperial College Business School said the move was a tax cut on alcohol, and suggested health concerns were being ignored.

Prof Sassi said: ‘The freeze on alcohol duties effectively amounts to a tax cut on alcohol products, because inflation erodes the impact of the tax over time.

‘The Government’s priority seems to protect and promote the alcohol beverage business, based on the way the measures have been framed.

‘The Chancellor has gone out of his way promising to fight US tariffs on UK alcohol products, which is not strictly a budget measure.

‘If any concerns are signalled about alcohol consumption, they are in connection with the environmental impacts of the distilling business.

‘Any health concerns are ignored.

‘The extra health care expenditure on alcohol-related conditions arising from the freeze will be in the order of tens of millions of pounds each year in the years to come.

‘Yet, it was underlined with pride that all alcohol duties have been frozen ‘for only the second time in almost 20 years’.

As well as the freeze on alcohol duty, the Chancellor announced a £5,000 business rates discount for pubs.

In other steps designed to help pubs and other high street staples the Chancellor said from the coming year he would take the ‘exceptional step’ of abolishing business rates for businesses with a rateable value below £51,000.

A ‘temporary coronavirus business interruption loan scheme’ will be introduced for banks to offer loans of up to £1.2 million to support small and medium-sized businesses.  

The Chancellor said that the Government will meet the cost for businesses with fewer than 250 employees of providing statutory sick pay to those off work ‘due to coronavirus’.

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