Concerned shoppers tightening belts for Christmas
THE soaring cost of living means shoppers plan to cut back on food and drink in the run-up to Christmas, according to a poll.
Many say they will not only buy fewer luxury items, but also less meat, fish and cheese.
The poll by Survation found 69 per cent have been affected by rises in prices of food, drink and energy. Sixty-three per cent were hit by the increase in fuel costs.
Shoppers are planning to make savings by scaling back on purchases. Almost half (49 per cent) plan to buy restaurant takeaways less often, while four out of 10 expect to purchase fewer bottles of spirits, and 39 per cent anticipate buying less beer and cider, chocolates and sweets, and cakes and biscuits.
More than a third (34 per cent) say they will buy less red meat, with a quarter cutting down on fish and 22 per cent buying less cheese.
The research – commissioned by the UK Spirits Alliance – comes amid concerns that a combination of rising inflation and higher taxes will leave families worse off.
Seven per cent of shoppers say they will stop buying restaurant takeaways completely, while five per cent will quit purchasing spirits.
Liam Manton, founder of Manchester-based Didsbury Gin, warned of a “tragedy for the industry”. He said: “With over 20 million people expecting to enjoy a gin and tonic or cocktail in a bar or restaurant this festive season, the high tax burden on spirits is already starting to pinch as the cost of living rises.
“While we promote drinking responsibly, seeing consumers look to cut back due to a rise in the cost of living and because of the high level of spirits duty is a tragedy for the industry.” There is disappointment that Chancellor Rishi Sunak did not do more to help Scotch whisky in last week’s Budget, which featured tax cuts for sparkling wine, draught beer and cider.
A spokeswoman for the UK Spirits Alliance said: “We need the Chancellor to look again at the proposed changes to alcohol duty.
“Beer and cider have got specific help but spirits like gin and tonic and Scotch whisky have been passed over for long-term support.
“The new duty system must tackle the competitive disadvantage spirits face and create a simpler, fairer system that backs jobs, growth and consumers.”
Inflation is expected to average four per cent next year, with the Office for Budget Responsibility saying it could hit the “highest rate seen in the UK for three decades”.
The Institute for Fiscal Studies warns that “millions will be worse off in the short-term”. Professor Len Shackleton, a research fellow with the Institute of Economic Affairs, did not hide his disappointment with the choices the Chancellor made last week.
He said: “The faster than expected recovery and low unemployment gave him an unexpected opportunity to cut taxes.
“Instead he has shovelled money into an unreformable public sector – which, for the most part, has not distinguished itself by its performance during Covid – and restored the discredited foreign aid budget.
“Marginal reductions in the price of beer, fizzy wine and internal flights do not help families worried about greatly increased heating charges, rising fuel prices and the threat of uncosted green commit
ments.” Prof Shackleton added: “People should be given back the freedom to make their own decisions, rather than constantly badgered into changing their lifestyles and consumption patterns to suit the agenda of living-in-a-bubble politicians who do not understand the impact of their policies on ordinary families, and who are stoking up inflation which will erode living standards further.”
The Centre for Policy Studies (CPS) is alarmed at the increases in public spending and the consequent taxes, warning that the Prime Minister will soon “usher in the era of the trillion-pound British state”.
Tom Clougherty, head of tax at the CPS, said: “Britain is becoming a high-tax, high-spend country – this is the age of record tax burdens and a trillion-pound state.
“Living standards are already under pressure and these tax rises coming next year are going to hit working families’ take-home pay hard.
“More spending ultimately means higher taxes and, in the long run, it is always ordinary people and small business that bear the brunt.”
The Chancellor introduced a raft of measures to help low-income families, including an increase in the national living wage to £9.50 an hour and a rise in the work allowance – the amount people can earn before starting to lose Universal Credit – to £500.
The “taper rate” will also be cut so people on UC will see their benefit fall by 55p instead of 63p for every £1 they earn above the work allowance.
The Resolution Foundation is concerned about the impact of the end of the £20-a-week uplift to UC, which was introduced during the pandemic. Senior economist Karl Handscomb said for the 4.4 million households already on UC, the changes will “still leave the poorest fifth of households £280 a year worse off overall”.
However, a Treasury spokesman said: “As well as a historic simplification of the UK’S outdated alcohol tax system, we’ve frozen alcohol duty eight times over the last nine budgets, which means that, after inflation, spirits duty rates are at their lowest levels since 1918.
“This will save consumers £3billion over the coming years.
“The Government is taking targeted action worth more than £4.2billion a year to help families with the cost of living, and our Plan for Jobs is supporting living standards by getting people into work and helping them progress.”
‘Tax rises will hit working families’ take home pay hard’