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Budget 2018: Duties frozen

Chancellor Philip Hammond has announced that beer, cider, and spirits duties will be frozen in this year’s Budget.

HM Treasury forecasts the move will cost the government £35m in the fiscal year to 2019, and a further £880m between 2018/19 and 2023/24.

This measure freezes duties on spirits, beer, still ciders and sparkling ciders below 5.5% Alcohol by Volume (ABV). This measure will be effective from 1 February 2019 for a one-year period. Duty on most wine and higher strength sparkling cider will rise by retail price index (RPI) inflation.

The new band for still ciders rated at between 6.9% and 7.5% ABV – announced by the government in the Autumn Budget 2017 – will also come into effect, although it will mean the duty on cider within that threshold will rise by a mere 0.1 pence per unit at the low end (from 5.4p to 5.5p) and 1.4 pence per unit at the top end (from 5.4p to 6.8p).*

The Chancellor’s announcement follows representations made to the MP for Runnymede and Weybridge from Conservative Party colleagues, and in particular a sustained lobbying campaign from Scottish members of the party.

Responding to the announcements, Professor Sir Ian Gilmore, Chair of the Alcohol Health Alliance, said:

‘The decision to freeze alcohol duty yet again represents a missed opportunity to take pressure off the NHS and other public services, and to protect the most vulnerable in our society.

‘In real terms, this freeze represents a cut in alcohol duty. Alcohol duty cuts since 2013 have already cost the Treasury about £4bn in lost revenue and will now cost another £5bn by 2023. At a time when our public services and specifically alcohol treatment services are under substantial pressure, we cannot afford any more duty cuts.<

‘Alcohol is much more affordable today than it was 30 years ago, and alcohol-related harm continues to rise. With 65 people dying every day from alcohol-related causes, there’s an urgent need for Government to take action on cheap alcohol.

‘Increasing alcohol duty is an effective and cost-effective measure to reduce alcohol harm and ease the pressure on the NHS, while raising additional revenue for public services at the same time.’

 

 * 2016 prices

You can listen to John Jolly of drug and alcohol charity Blenheim CDP discuss the effect of the Autumn Budget on treatment services in our October 2018 podcast: