Jeremy Hunt’s Budget pledge to cut duty on draught beer in pubs to protect one of the nations “most treasured community institutions” is nothing more than an attempt to secure positive headlines and will do little to help struggling pubs, a Stockport landlord told i.
The Chancellor made a play to appeal to Brexit supporters by attaching his draught beer duty reduction to the UK’s EU departure, christening the move a “Brexit pubs guarantee”, saying “British ale is warm, but the duty on a pint is frozen”.
But the drinks industry has poured scorn on Mr Hunt’s triumphant Budget announcement heralding the future of the “Great British pub”, pointing out that the Chancellor is “giving with one hand and taking away with the other” by hiking other alcohol duty rates in line with inflation and pushing up the price of wine and spirits. Under EU law the Treasury could have reduced duty across all types of beer.
From 1 August, the duty on draught beer in pubs will be up to 11p lower than the duty in supermarkets. But duty on all other alcohol will rise by an average of 10.1 per cent, Mr Hunt announced.
Landlord Jamie Langrish runs three pubs in and around Stockport – The Crown, in Heaton Mersey, the Bakers Vaults, in Stockport, and the Red Lion, in Cheadle. He described the Budget as “devastating” and said the alcohol duty rise, combined with the removal of energy support measures for businesses, meant the draught cut was just a “drop in the ocean” for struggling pubs.
Within minutes of Mr Hunt’s announcement, Mr Langrish was being grilled by customers keen to know when he was going to lower the price of his draught beer.
Having heard the headline figure, they had assumed prices would immediately come down, by 11 pence. But Mr Langrish said this will not be possible. In fact, he says he is probably going to have to raise prices due to the increase in duty on wine and spirits and the Government’s Energy Bill Relief Scheme, for businesses, coming to an end. (The Energy Price Guarantee, which limits household bills for typical usage to £2,500, will be extended until August.)
“[The Treasury has] clearly gone for a headline grabber [suggesting that] pints will be cheaper than supermarket,” said Mr Langrish.
“Everything else is going up. It won’t affect the price of a pint of beer at all. It’s giving with one hand and taking away with the other…It’s really disappointing,” he added.
While Mr Hunt’s claim that his draught beer duty cut would not have been possible were the UK still part of the EU was technically correct, this is only because under EU rules alcohol duty does not allow differentiation by package type, the British Beer and Pub Association confirmed. This means the Chancellor would have had to cut duty on all beer, including that sold in bottles or cans, as well as draught, or none.
Emma McClarkin, the chief executive of the BBPA and a former Conservative MEP, said: “This Budget was a make or break moment for pubs and brewers who have been running out of road for too long.”
She added: “The cut to draught duty as part of the alcohol duty reform is positive and we hope that it will result in a boost for our pubs this summer.
“However, the fact is, our industry will be facing an overall tax hike not a reduction come August. Duty on non-draught beer will rise and the measures introduced today won’t rebalance the catastrophic impact soaring inflation and unfair energy contracts are having on both pubs and the breweries that supply them.”