Thank you for contacting me about draught relief for beer and cider served in pubs. I am aware of the campaign on this issue. I have ensured colleagues in the Treasury are aware of the concerns you have raised ahead of the Budget.
The Island has an excellent pub culture and my membership of the All-Party Parliamentary Group for pubs has enabled me to promote and support their interests. I am grateful to those local publicans who have been working with me and raising issues they are facing on the Island.
Under the new alcohol duty system, draught relief provides a 9.2 per cent duty reduction on draught beer and cider products below 8.5 per cent alcohol by volume. This ensures that there will always be a lower duty rate for draught products to recognise the value of our great British pubs. This means that every pint, in every pub across the UK, pays less duty than their supermarket equivalent – this is the Government's Brexit Pubs Guarantee.
I understand the Government is closely monitoring the impact of the recent reforms, including draught relief, and will evaluate the impact of the new rates and structures three years after the changes took effect on 1 August 2023. This will allow time to understand the impacts on the alcohol market, and for HM Revenue and Customs to gather useful and accurate data with which to evaluate the effects of the reform. As with all taxes, the Government keeps the alcohol duty system under review during its yearly Budget process.
Moreover, relaxed licensing regulations that allow pubs, restaurants and bars to sell takeaway pints without red tape holding them back have been extended. Under the relaxed regulations, any site permitted to sell alcohol on their premises can sell for off-site consumption too, without the hassle of applying for a new licence. Premises will also be able to continue to serve alcohol in the area covered by any pavement licence that they have.
The Government has also announced a £4.3 billion business rates support package. The small business multiplier will be frozen for a fourth consecutive year, and the 75 per cent relief for eligible retail, hospitality and leisure properties will be extended for 2024-25 - a tax cut worth £2.4 billion.
Regarding the juice content of cider, the present requirement under the Alcoholic Liquor Duties Act 1979 that 35 per cent of the finished product be made up by apple juice was last revised in 2010, following consultation with cidermakers. I believe that this strikes a suitable balance, facilitating the various ancient traditions found on these islands while still allowing for innovation in the sector and large-scale production of popular styles.
I continue to raise the issue of VAT on behalf of Island businesses with Ministers.
Thank you again for taking the time to contact me.
