Cheers! Alcohol and fuel duty increases cancelled

ALCOHOL and fuel duty were frozen yesterday as the Chancellor vowed to keep the cost of living low.

Rishi Sunak told MPs: ‘I can confirm that the planned increases in duties for spirits – like Scotch whisky – wine, cider and beer will all be cancelled. All alcohol duties frozen for the second year in a row – only the third time in two decades.

‘And right now, to keep the cost of living low, I’m not prepared to increase the cost of a tank of fuel. So the planned increase in fuel duty is also cancelled.’

It means fuel duty – 58p per litre for petrol and diesel – will be frozen for the 11th consecutive year. Alcohol duty is charged at different rates on beer, cider, wine and spirits.

Despite the freeze last year, the Chancellor received big returns from alcohol duty as people drank more during lockdown. Bumper alcohol sales in supermarkets and offlicences will give the Treasury an extra £800million in duty, the Office for Budget Responsibility has forecast.

Unlike with many of his other announcements, Mr Sunak did not set out how long the alcohol and fuel duty freezes would last, suggesting that they may rise in future Budgets. Fuel duty, in particular, is likely to increase to help the Government meet climate change targets.

The Treasury conceded: ‘Future fuel duty rates will be considered in the context of the UK’s commitment to reach net-zero emissions by 2050.’

The tax has been frozen since March 2011, with the Treasury claiming that this has saved the average car driver £1,600 in total. AA president Edmund King said: ‘[The freeze in fuel duty] will be welcomed by the cardependent, key workers and all businesses that rely on road transport.’

Drinks industry figures said the alcohol duty freeze will help the sector to recover – but pressed for more help when a postBrexit review of the duty has taken place.