While Rachel Reeves announced that alcohol duty rates on non-draught products will increase in line with RPI next year as a part of Labour’s efforts to plug what it claims is a £22 billion ‘black hole’ in public finances, there was some good news for beer lovers – the price of a pint pulled in a pub will decrease by a penny.
The official reasoning for this is to ‘encourage responsible drinking in social, controlled settings’.
The Chancellor’s announcement gained big cheers from MPs in the House of Commons.
Ms Reeves added that the Government will renew the tobacco duty escalator for the remainder of the Parliament at RPI (Retail Prices Index) plus 2%, increase duty by a further 10% on hand-rolling tobacco this year and introduce a flat-rate duty on all vaping liquid from October 2026.
For many pubs, it will slightly sweeten the pill of increased national minimum wage rates and employer National Insurance contributions, plus reductions in rate relief in many areas. But many will not be able to consider cutting beer prices.
Alison Boutoille, founder of the CityStack London Pub Collection, says: “The recent reduction in alcohol duty for draught beers is a positive step, indicating that the Government recognises the importance of pubs as vital community hubs.
“However, the increases in National Insurance and minimum wage, while necessary to tackle the cost-of-living crisis, impose further financial burdens on small businesses.”
Many publicans have taken matters into their own hands and they are now looking at ways to bring in more revenue in the build-up to Christmas, one of the busiest times of the year in the hospitality trade.
But, with fierce competition from the big chains, they are having to find new ways to stand out.
CityStack is an initiative to support independent pubs and help Londoners socialise within their budget with a special beermat that gives £10 off a £20 spend at any ten of their 50+ participating London pubs.
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“Independent pubs have faced a myriad of challenges in recent years, including inflation, declining customer numbers, staff shortages, and skyrocketing operating costs,” says Alison.
“What they need now is relief from financial pressure, not more. It would have been beneficial to see greater support from the Government to help small businesses thrive.”
It remains to be seen whether the penny on each pint will actually reduce bills for customers, or if it will have to go towards mitigating the losses of increased taxation in other parts of the budget.
