Draught pints to cost 1p less after tax change

To aid the industry, the UK government has announced that the price of draught beer will be reduced by 1 penny starting this Thursday due to a cut in alcohol duty. The 1.7% tax relief on draught beer production, announced in last year's budget, is the first reduction in alcohol duty in a decade.

However, critics point out that increases to employer national insurance contributions and the minimum wage, also announced in the budget, mean that beer prices will actually rise. Additionally, a tax relief policy for craft alcohol producers will also take effect on Thursday, with the total cost of both policies being £85 million.

Treasury Secretary James Murray stated, "Our pubs and breweries are a vital part of the UK and our thriving high streets." The relief applies to draught beer with an alcohol content below 8.5%, equivalent to an average reduction of 1 penny on a 4.58% beer tax. The government says this measure will affect three-fifths of alcoholic drinks sold in pubs.

Meanwhile, the tax relief policy for small-scale producers applies to products with an alcohol content below 8.5% and gradually decreases as alcohol production increases. The Society of Independent Brewers has stated that these policies will help pubs compete with cheap alcoholic beverages sold in supermarkets. However, critics argue that the tax relief is insufficient to offset other decisions made in the budget.

Some pub owners have stated that they are facing price increases of 30 to 40 pence per pint due to increased employment costs. Wetherspoons chain CEO Tim Martin said in the company's performance report last week that higher employment costs would cost the company £80 million annually. He believes that the measures in the budget have a much greater impact on pubs and catering companies than on supermarkets, and accused politicians of being "dinner party people, not pub people."

Emma McClarkin, CEO of the British Beer and Pub Association, said, "Pubs and breweries are now facing a cliff edge in April after the wider budget was announced." She was referring to the time when the measures in the budget would take effect. Unions have defended the increase in the minimum wage and criticized large companies for "crying poor" while making huge profits. The government has stated that raising employer national insurance contributions is to address public finance issues.

These measures come at a time when the hospitality industry is already struggling and contracting to cope with a series of cost increases starting in April. Some pubs and restaurants have already stated that their establishments are "unusually quiet" due to people spending less because of the rising cost of living.