Spring Budget: Wetherspoon boss Tim Martin welcomes Jeremy Hunt’s ‘Brexit pubs guarantee’

Jeremy Hunt’s plan to freeze the tax on draft beer received a mixed reaction from the pub industry today, with Wetherspoon boss Tim Martin welcoming the move, but a landlady dismissing it as a ‘velvet glove’.

Amid sweeping changes to the way alcohol is taxed announced in his budget, the chancellor said the levy on draft beer and cider would not rise in line with inflation in August. Instead, a pint from a pub would have 11 pence less excise duty than store-bought alcohol.

Mr Hunt said the move was part of the ‘Brexit pubs guarantee’ which ensures that ‘pubs will always pay less tax on a pint compared to supermarkets’.

Mr Martin praised the excise duty freeze, but insisted that more needs to be done to close the gap between taxes on pubs and supermarkets.

“Any reduction in the tax disparity between pubs and supermarkets is welcome,” he said. “We have been campaigning for tax equality for a long time. This gesture by the government is a tacit acknowledgment that something has to be done.’

Emma McClarkin, CEO of the British Beer and Pub Association, said Mr Hunt’s announcement was ‘positive’

Mr Martin added: ‘We will examine how much of the fiscal inequality remains after this step. We stand by our view that anything less than equality is an unsustainable disruption and economically counterproductive.”

Nick Mackenzie, CEO of Greene King, said the measure would provide only partial relief to landlords who will face a spike in their energy bills when an existing government support program expires in April.

“We are delighted to see that the Chancellor has listened to the pub industry and increased draft beer relief, an important step in supporting the Great British Pub,” he said.

“The devil is in the details, however, and we are concerned that the extended draft exemption still won’t mitigate the challenging headwinds British pubs are facing.”

Mr Mackenzie added: ‘As the duty is mainly paid by suppliers, such as breweries, it is essential that any benefit is passed on to venues to meet the Government’s target of reducing inflation and growing the economy, to help realize.’

Under a 1992 EU directive, different excise duties could be applied to beer based only on its alcohol content, not where it is sold.

In his speech yesterday, former Remainer Mr Hunt presented his announcement as a Brexit dividend.

“I will do something that was not possible when we were in the EU and significantly increase Draft Relief’s generosity,” he said.

Greene King CEO Nick Mackenzie said the decision to freeze beer excise duty would only provide partial relief to landlords

Dawn Hopkins, Vice-President of the Campaign for Pubs and a Landlady, wondered if the government was serious about helping pubs

Mr Hunt told MPs the beer tax change would also apply to ‘every pub in Northern Ireland’ due to the Windsor Framework unveiled by Rishi Sunak more than two weeks ago but has yet to be passed by MPs.

He added: ‘British ale may be warm, but the load on a pint is frozen.’

The favorable tax treatment of draft beer was described as ‘welcome’ by the Campaign for Real Ale.

But Mr Hunt’s announcement was described by the Campaign for Pubs as a ‘velvet gloved slap’ – which also lashed out at the Chancellor’s ‘crude’ reference to traditional beers being served ‘hot’.

“If the government was serious about supporting pubs and hospitality, they would have kept this support, reduced VAT and finally announced the long overdue review of the corporate pricing system that they have promised time and time again,” said the vice-chairman, Dawn Hopkins.

‘The rude remark about warm beer shows that Jeremy Hunt doesn’t go to the pub and he certainly doesn’t understand the serious plight of pubs, tax collectors and small brewers.

“We will lose even more pubs and small breweries in our country if this government continues to ignore calls for targeted aid.”

A move to tax drinks based on their alcohol content – the stronger the drink, the higher the levy – means millions of drinkers will see the price of red and white rise by 20 percent – or 44 pence a bottle – according to the Wine and Spirits Trade Association

Other critics pointed to broader tax changes that will affect the cost of a bottle of wine and spirits.

A move to tax drinks based on alcohol content – the stronger the drink, the higher the charge – means millions of drinkers are seeing the price of red and white rise by 20 percent.

This yields an average of 44 pence per bottle, according to the Wine and Spirits Trade Association, the largest increase in half a century in the tax on a bottle of red or white.

Also, taxes on alcohol will increase across the board with inflation — 10.1 percent — on August 1.

Together, these measures were criticized as a “two-pronged tax attack” on drinkers.

Emma McClarkin, managing director of the British Beer and Pub Association, said: ‘The reduction in the tap duty as part of the alcohol excise reform is positive and we hope it will result in a boost for our pubs this summer.

“The fact is, however, that our industry will see an overall tax increase in August, not a cut.”

In his speech yesterday, former Remainer Mr Hunt presented his announcement as a Brexit dividend

Miles Beale, CEO of the Wine and Spirit Trade Association, added: “The government’s decision to punish wine companies and consumers with a 10 percent increase in excise duty on spirits and a whopping 20 percent on wine from August 1 is staggering. . It is the largest increase in wine excise duty since 1975.

“This budget is in direct contradiction to what this government claims it wants to address. It will further fuel inflation. It will cause the consumer even more misery.’

Nuno Teles, of Diageo, the makers of Johnnie Walker whiskey, said the “decision is a sledgehammer … We urge the Chancellor to reverse this punitive and inflationary tax increase.”