Commons Sense

House of Commons · Ministerial Statement

Alcohol Duty

19 December 2022 · 14 other contributors

Opened by James Cartlidge Con South Suffolk

Taxation

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

James Cartlidge raised concerns about alcohol duty in the House of Commons. A government minister responded. Other MPs also contributed.

Key points

  • Reforms to the alcohol duty system were announced to simplify and modernize rules.
  • Higher duties will be introduced for stronger drinks based on drink strength.
  • Relief measures for pubs and small producers are estimated at 100 million annually.
  • Duty rates are frozen until 1 August 2023 to provide business certainty.

How the debate unfolded

MPs spoke in turn to share their views and ask questions. Here's what each person said.

Government Statement

James Cartlidge

The Minister announced significant reforms to the alcohol duty system, including simplifying and modernising rules that have not been updated for over a century. The new system will base tax rates on drink strength, introducing higher duties for stronger drinks while providing relief measures for pubs and small producers, estimated at £100 million annually. Duty rates are frozen until 1 August 2023 to give businesses certainty amidst economic challenges; changes after the spring Budget 2023 will not take effect until then. The reforms aim to support industry growth, align with public health goals, and ease administrative burdens on producers.

Other contributors (14)
  • N/A

    Question

    N/A

    Minister reply

    N/A

  • Abena Oppong-Asare Lab Erith and Thamesmead

    Question

    The MP thanked the minister but criticised the announcement as a U-turn, questioning the lack of long-term planning. She highlighted energy bill issues affecting 70,000 venues and the need for certainty in regulatory changes.

    Minister reply

    The Minister clarified that the reform package will introduce differential duty rates on tap and bottle beer from August next year, which is a significant change due to Brexit. He also mentioned an energy bill relief scheme worth £18.1 billion to support businesses.

  • Peter Bottomley Con Birmingham Yardley

    Question

    The MP supported the announcement and asked for consideration of farm-gate concessions for vineyards, suggesting that duty freezes can lead to revenue increases due to price elasticity.

    Minister reply

    The Minister acknowledged the wine rate averaging at 12.5% ABV for transition purposes and engaged with sectors ahead of decision-making.

  • Stewart Hosie SNP Dundee East

    Question

    The MP questioned inconsistencies in cost estimates associated with duty freezes and reforms, seeking clarity on the net cost to the Exchequer.

    Minister reply

    The Minister explained that costs depend on decisions made at the Budget next year. He also clarified that EU law previously prevented such differential duties.

  • Alun Cairns Con Vale of Glamorgan

    Question

    The MP welcomed the statement and asked if the Minister would consider a more significant cut to cider duty beyond the promised 5% at the next Budget.

    Minister reply

    The Minister thanked the MP for his support and highlighted that the proposed 5% cut is the largest since 1923. He acknowledged opportunities for further discussion before March's Budget.

  • Navendu Mishra Lab Stockport

    Question

    When will the Government finally end the U-turns and delays, and agree a long-term solution and support package for the alcohol sector?

    Minister reply

    This is the biggest reform to alcohol duty in 140 years. The reforms are designed to balance competitive rates of duty with consideration of public health.

  • Philip Dunne

    Question

    What is the 18-month period dependent on? If we were to move then to differential bands per percentage of ABV, that would not really help the trade to prepare.

    Minister reply

    The 18 months are there precisely to enable the sector to adapt to the changes coming. It is about public health and social drinking compared to private consumption.

  • Wendy Chamberlain Lib Dem North East Fife

    Question

    Why was there a delay in issuing the energy bills report?

    Minister reply

    The support for businesses, including pubs and distillers, since October amounts to £18.1 billion. The new year will see a review of non-domestic support due to its complexity.

  • Douglas Ross

    Question

    Will the Government listen to the industry when it comes to the Budget in March? It has time after time proven wrong Treasury officials who predicted that an increase in duty would increase revenue to the Treasury.

    Minister reply

    The extension of the freeze is good news for every single sector. The Minister will engage with the Scotch whisky industry and all other alcohol sectors.

  • Grahame Morris Lab Easington

    Question

    Can he go further and say something about the duty taper? Are the Government going to address the cliff edge above 5,000 hectolitres for small producers?

    Minister reply

    The draught relief is the new differential duty between the rate applied to alcohol purchased on draught versus in a supermarket. The Minister will write to the hon. Gentleman with details of the taper and technical points.

  • Andrew Jones

    Question

    Can my hon. Friend comment or write to me about the proposals for mergers and acquisitions?

    Minister reply

    My hon. Friend was an Exchequer Secretary to the Treasury, and I am more than happy to meet him and share with him further detail from officials about mergers and acquisitions.

  • Christian Wakeford Lab Bury South

    Question

    What assurances can he give me that he will continue to work cross-party and cross-Department to ensure that public health is fundamental in any alcohol duty changes?

    Minister reply

    The reform package in August has one underlying principle: taxation on the basis of ABV. This balances competitive duty rates with consideration of public health.

  • Jim Shannon DUP Strangford

    Question

    Has the Minister considered taxation aimed at multibuys in supermarkets, in co-ordination with the welcome freeze for pubs and hospitality?

    Minister reply

    The biggest impact economically is on consumption due to economic pressures. The support includes help for consumers through a duty freeze for six more months.

Shadow Comment

Abena Oppong-Asare

The shadow criticises the Government's indecision and U-turns regarding alcohol duty reforms. While welcoming the recent freeze extension, she argues it reflects a lack of long-term planning, leaving businesses uncertain about future regulatory changes. She highlights the economic hardships faced by venues like pubs due to high energy costs and calls for clarity on the impact assessment of the new duty regime. The shadow urges the Minister to provide more detailed plans and ensure stability in the alcohol sector.

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