Draught pints to cost 1p less after tax change

Draught pints will cost 1p less from Thursday because of a cut in alcohol duty in a move intended to help the sector grow.

The 1.7% tax cut on the production of draught alcohol announced in the Budget last year is the first alcohol duty cut in a decade.

However, critics have said increases in employer national insurance contributions and the minimum wage announced in the Budget mean pint prices will go up.

A relief for craft alcohol producers also comes into effect from Thursday, with both policies costing a combined £85m.

“Our pubs and brewers are an essential part the fabric of the UK and our brilliant high streets,” Exchequer Secretary to the Treasury James Murray said.

The relief applies to draught drinks below 8.5% ABV, which equates to a 1p tax cut on the average 4.58% pint.

The measure will affect three fifths of all alcoholic drinks sold in pubs, the government said.

Meanwhile, the small producer relief is for products which are below 8.5% ABV, and tapers away the more alcohol is produced.

The Society of Independent Brewers and Associates said the polcies will help pubs compete against cheap alcohol sold in supermarkets.

However, critics have said the tax reliefs are not enough to counter other decisions made in the Budget.

Some pub owners have said they are looking at a 30p to 40p increase on a pint because of higher employment costs.

Wetherspoons chief executive Tim Martin said in the pub chain group’s results last week that higher employment costs will cost the firm £80m a year.

He said the measures from the Budget “have a significantly bigger impact on pub and restaurant companies than supermarkets” and accused politicians of being “dinner party goers, rather than pub goers”.

“Following the wider Budget announcements, pubs and brewers now face an April cliff edge,” said British Beer and Pub Association chief executive Emma McClarkin, referring to when measures in the Budget will come into effect.

Unions have defended the increase in minimum wage and criticised large firms of “pleading poverty” while making large profits.

The government has said the rise in employer national insurance was needed to fix the public finances.

The measures come at a time when the hospitality industry is already struggling, and contracting in order to brace against a raft of cost increases from April.

Several bars, pubs, and restaurants have already said their venues are “eerily quiet” because people are not spending enough due to rising costs of living.