One hand gives, the other takes at the tap. The Chancellor is expected to put 2p on a pint today. From behind the bar, it looks less like a tax rise than last orders for the British pub.
The Prime Minister is a friend of pubs when it suits him. Drinking a pint is handy when he’s doing his TikToks
The tax hike has been briefed so thoroughly that publicans up and down the country have already been asked by regulars whether they’ll be ’rounding it up’. Not a penny of that 2p is mine, of course. Duty on a pint is expected to go from 50p to 52p, and every bit of it goes straight to the Treasury.
As the landlord, I’m the one who changes the prices on the board, and I’m the one who gets the look from the customer. The Chancellor gets the money and the landlord gets the blame. The rise is expected to be 3.9 per cent, in line with RPI (Retail Prices Index). CPI (Consumer Prices Index), the measure the Treasury prefers almost everywhere else, is 3.5 per cent. Funny how the higher number always wins when it’s the drinker paying.
Wine is expected to go up by 10p to 12p a bottle and gin by about 35p. None of that sounds like much on its own. Nothing ever does. That is how pubs die, not with a bang but with a long run of small, reasonable-sounding increases, each one waved through as a rounding error.
The Prime Minister is a friend of pubs when it suits him. Drinking a pint is handy when he’s doing his TikToks and wants to be seen as a man of the people. But TikToks don’t pay my rent. Over the summer, he helped us with business rates. Now it looks as if the Prime Minister gave us a fiver while the Chancellor slipped behind us and nicked fifty quid from our wallets.
And it isn’t only duty. National Insurance is up. The minimum wage is up. Diesel is up, and customers are skint. Put it together and you have a perfect storm about to crash over the hospitality industry. It is hard to see how many of us will survive the winter.
The strangest part is that the duty doesn’t even work. Alcohol duty receipts peaked at £13.2 billion in 2021/22 and haven’t topped £12.5 billion since. The rates go up and the money doesn’t follow. People drink less, drink at home, or buy something cheaper at the supermarket. If a business kept putting up its prices while its takings kept falling, you’d call in the administrators. When the Treasury does it, it’s called fiscal responsibility.
Meanwhile, the pubs keep closing. The British Beer and Pub Association (BBPA) expects about 360 to close this year, roughly one a day, with around 5,000 jobs gone. More than half of those jobs belong to people under 25. With nearly a million young people already not in education, employment or training, every shuttered pub pushes thousands more towards the benefits office.
A typical pub is no drain on the public purse. The BBPA reckons each one contributes about £200,000 to HMRC. Every one that shuts is a tax base the Chancellor has closed down himself.
We already tax beer harder than almost anyone. The BBPA puts UK beer duty at about 12 times that of Germany and Spain. Nobody thinks the Germans or the Spanish are nations of teetotallers. They simply decided long ago that the local bar was worth having.
So here is a modest proposal for John Healey. Freeze the duty. Then boost draught relief, the lower rate on beer poured in pubs, which currently stands at a 13.9 per cent reduction. Make it big enough that a pint in the pub can compete with a slab of cans from the supermarket. If ministers want people drinking sensibly, let them do it somewhere with a landlord, a bit of company and someone to tell them they’ve had enough. The supermarket car park offers none of that.
The pub isn’t just a shop that sells beer. For a lot of young people it’s where they get their first job, learning to change a barrel, handle a difficult customer and turn up on a Saturday when their friends are still in bed. That matters more now than ever. AI is shutting the door on young graduates trying to get their first break. Hospitality and pubs offer an alternative, a place to learn how to work and how to deal with people. But every time a pub closes, another door slams shut.
None of this is an argument for special treatment. It’s an argument for not taxing a struggling institution into the ground for money that, on the Treasury’s own figures, isn’t arriving. Healey still has time to change his speech. If he doesn’t, it will be publicans up and down the country who have to explain the new prices, and tell the regulars exactly where the 2p is going.
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