Alcohol duty rates will be frozen for a further six months until August 2023, the government has confirmed.
Announcing the move in the Commons, Treasury minister James Cartlidge said it is hoped the extension will “provide certainty and reassure pubs, distilleries and breweries as they face a challenging period ahead”.
Alcohol levies were due to be hiked on 1 February following the reversal of most of the Kwasi Kwarteng’s disastrous mini-budget, but Mr Cartlidge said that this year the duty rates decision will be held until Chancellor Jeremy Hunt delivers his spring budget on 15 March 2023.
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Mr Cartlidge made clear that if any changes to alcohol duty are announced at the spring budget, they will not take effect until 1 August 2023.
Alcohol duty was due to rise by Retail Price Index (RPI) inflation in February. RPI inflation was 14% in November.
“Today’s announcement reflects this government’s commitment to responsible management of the UK economy and supporting hospitality through a challenging winter,” the Treasury minister said.
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“The alcohol sector is vital to our country’s social fabric and supports thousands of jobs – we have listened to pubs, breweries and industry reps concerned about their future as they get ready for the new, simpler, alcohol tax system taking effect from August.
“That’s why we have acted now to give maximum certainty to industry and confirmed there will be just one set of industry-wide changes next summer.”
The British Beer and Pub Association welcomed the decision to extend the freeze on beer duty.
Emma McClarkin, chief executive of the British Beer and Pub Association, said: “The decision to extend the freeze on beer duty will be welcomed by pubs and brewers alike. In 2022 our industry has faced pressures and challenges like never before.
“This freeze will allow £180 million to be reinvested into our sector at a critical moment and inject a much-needed flurry of festive cheer for pubs and breweries. It shows the government understands just how much our pubs and brewers mean to communities across the UK.”
But shadow treasury minister Abena Oppong-Asare told the Commons it is “laughable” the government announced a six-month extension to the alcohol duty freeze in the name of certainty.
“We should call it what it is: it is a U-turn. The previous chancellor announced a freeze, the current chancellor scrapped it, and now it’s back on. How did we get here?” she said.
Ms Oppong-Asare also accused the government of having “no long-term plan for the British economy”.
At the autumn budget in 2021, the government announced its intention to reform alcohol duty by adopting a “common sense approach” where the higher a drink’s strength, the higher the duty.
The government also said it will introduce new reliefs to help pubs and small producers thrive.
These reforms are due to take effect from 1 August 2023.
