Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent assessment she has made of the potential impact of the reduced rate of beer duty for draught products on the (a) on-trade and (b) off-trade sectors.

Pubs and brewers make a significant contribution to our economy and society, including through supporting jobs, and this is reflected in the tax system.

The alcohol duty system supports pubs and hospitality businesses through Draught Relief (DR), which ensures eligible products served on draught pay less duty. This recognises the cultural importance of pubs and other on-trade venues as community hubs that play a role in encouraging responsible drinking in supervised settings.

At Autumn Budget 2024, the Chancellor announced a duty cut on qualifying draught products – approximately 60% of the alcoholic drinks sold in pubs. This is the equivalent to a 1p reduction on a typical pint, and means draught beer now pays 13.9% less in duty than its packaged equivalents – an increase of over 50% on the previous draught discount of 9.2%. The Tax Information and Impact Note (TIIN) on this measure is published here:

https://www.gov.uk/government/publications/changes-to-the-rates-of-alcohol-duty/alcohol-duty-uprating

HMRC plans to evaluate the impact of the 2023 alcohol duty reforms, including DR, three years after the changes took effect on 1 August 2023. This allows time for HMRC to gather a broad range of data to properly evaluate the impacts. The Government welcomes evidence from industry on the impact of the changes so far.

The Chancellor makes decisions on tax policy at fiscal events, and, as with all taxes, the Government keeps alcohol duty under review as part of its Budget process. The Government welcomes representations from the beer and pub sectors in advance of the Budget.

Treasury ministers have meetings with a wide variety of organisations in the public and private sectors as part of the process of policy development and delivery. Details of ministerial and permanent secretary meetings with external organisations on departmental business are published on a quarterly basis and are available at:

https://www.gov.uk/government/collections/hmt-ministers-meetings-hospitality-gifts-and-overseas-traveL