There were few silver linings in today’s Budget announcement – but one measure the Labour lot are rather keen to harp on about is the cut to draught duty by 1.7 per cent. What exactly does this work out at? Er, a rather measly one penny off the cost of a pint. How very generous…
While the announcement received one the most enthusiastic cheers in the chamber, it seems that industry experts are not quite as thrilled about the move. Rachel Reeves was rather fast to glaze over the fact that the Labour government will raise alcohol duty rates on products like spirits and wines in line with the retail price index from February next year. Despite the government framing the ‘penny off a pint’ move as a positive one – as, the Chancellor said, ‘nearly two-thirds of alcoholic drinks sold in pubs are served on draught’ – there remain fears that tax hikes on other types of alcohol will hurt suppliers. Hospitality venues will have to adapt to supply issues while also struggling with Reeves’s ‘working people’ Budget that has introduced minimum wage uplifts and raised employers’ national insurance contributions. On a rather concerning note, the OBR has predicted what business leaders warned of in the days leading up to the Budget: that if employing workers becomes more expensive, then businesses will be rather more reluctant to hire additional staff – or even lay off staff – as a result. Crikey.
In more glum news, the hospitality industry expects the minimum wage increase alone – of at least 6.7 per cent – to cost the sector a staggering £1.9bn. So much for growth, eh? Taking to Twitter to fume about Labour’s measures, the CEO of the Wine and Spirit Trade Association Miles Beale raged:
Change of government, but not style. Labour has given hospitality the one thing it did NOT ask for and claimed it as a ‘win’ – without recognising [the impact of] the increase in business rates, minimum wage and employer NICs. Add to that the RPI increase in all alcohol duties, which will affect their suppliers and bring in LESS revenue to the Exchequer.
In the end all drinks will be MORE expensive – wherever you buy from.
Ouch. Going on, Beale blasted the government’s alcohol duty hike as ‘a real kick to the teeth’ and ‘counterproductive’, adding:
The decisions made at this Budget are a bitter blow for all. They will stifle the growth of British business and add another nail in the coffin for hospitality – and result in less choice and price rises for consumers.
Whisky consultant Blair Bowman was just as scathing, telling Mr S that the alcohol duty increase as a ‘missed opportunity to support Scotch whisky’, while the managing director of Diageo GB has taken to LinkedIn to scorn the Chancellor’s move, writing:
I’m deeply disappointed by today’s Budget decisions on alcohol duty. On the campaign trail, Keir Starmer pledged to ‘back the Scotch whisky industry to the hilt’. Instead the government has broken this promise and slammed even more duty on spirits. This betrayal will leave a bitter taste for drinkers and pubs.
Oo er. The move is not quite the dream for pub-goers – or owners – that Reeves appeared to suggest it was today, eh? Talk about smoke and mirrors…
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