Alcohol duty to be frozen for further six months

The government has extended a freeze on alcohol duty for six months.

Chancellor Jeremy Hunt had said in his Autumn Statement that prices would go up in February, reversing a decision made by his predecessor Kwasi Kwarteng.

But the Treasury is now freezing the duty until August 2023 when a new system for calculating taxes on alcohol is also due to come into force.

Lifting the freeze would have added 7p on a pint of beer and 38p on a bottle of wine.

Mr Kwarteng had originally announced the freeze during his short time as chancellor in September, saying he had “listened to industry concerns” over planned rises in the tax during a time when the cost of living is rising at the fastest pace for 40 years.

But after Mr Hunt said the duty would rise in line with retail prices index (RPI) inflation from February, industry leaders were disappointed.

The Scotch Whisky Association said many distillers were “furious” at the move that it said would amount to an average increase of 12% in price, or £1.35p to the average bottle of whisky.

The duty paid on alcohol is revalued each year to keep pace with inflation – though it has been either cut or frozen in every budget since 2013.

Monday’s news was welcomed by the hospitality trade, but Michael Kill from the Night Time Industries Association called for more government support for the sector, which over the last few years has been hit by Covid lockdowns, and more recently train strikes leading to cancelled bookings and lower trade.

“The alcohol duty freeze will give businesses some breathing space but will not repair the damage already done or solve the immediate challenges faced by the sector following three years of disruption,” said Mr Kill.