Alcohol Duty announcements in Autumn Budget 2024 are a positive step. More is needed to offset the social and economic cost of alcohol harm.

What is the Autumn Budget?

The Autumn Budget is a speech in which the Chancellor of the Exchequer provides an update to Parliament on the economy. Earlier today, Chancellor Rachel Reeves stood at the despatch box in the House of Commons to deliver this year’s Autumn Budget. She updated MPs and the public on the overall health of the economy and announced changes to taxes and government spending.

The Budget provides a crucial moment for the Government to take action to prevent the raising harm caused by alcohol. The default policy is for taxes to rise with inflation each year, to stop the value of the tax being eroded.

In the previous Budget, announced in Spring 2024, the Government chose to freeze alcohol duty, after making the positive choice to raise it in line with inflation in March 2023, following a decade of freezes and cuts. Alcohol Duty is a type of tax paid by companies that produce alcohol. Over the years, these companies have enjoyed huge profits from alcohol but have not paid their fair share in the cost of tackling the harm that it causes.

What did the Chancellor announce in terms of alcohol duty?

The Chancellor announced that from 1 February 2025, there will be:

• An increase in non-draught alcohol duty rates in line with inflation
• A cut in duty paid on draught products by 1.7%
• An end to the current temporary wine easement as planned

Cuts on duty on draught products explained: Alcoholic products below 8.5% ABV sold on draught in on-trade venues such as pubs and restaurants were already entitled to a lower rate of duty, as long as they were able to be connected to a pump system or drinks tap and be contained in a container of capacity of 20 litres or higher.

These products represent 60% of alcoholic drinks sold in pubs. Today’s announcement means reducing duty by one penny per average strength pint in pubs – a measure which the Government has taken to support British pubs. This move may start to level the playing field, as cheaper, non-draught products sold in shops and supermarkets play a key role in driving higher rates of alcohol harm.

Alcohol Change UK reaction

In response to the announcements, Dr Richard Piper, CEO of Alcohol Change UK, said:

“After years of real terms cuts, today’s announcement that alcohol duty will keep pace with inflation is a step in the right direction. This will see the country’s total alcohol duty receipts reach £15.9bn per year by 2029/2030. Yet, this is still less than half of the cost of alcohol-related harm in the UK, currently estimated to be at least £33bn each year. This gap needs closing.

“From headaches, sleepless nights, work and relationship issues to poor mental health, heart disease and cancer, alcohol harm impacts millions of us and is felt across our communities, society and economy. Looking ahead, we hope the Government and its Health Mission Board explore further action on the taxation, cost, availability and marketing of alcohol. This should include reintroducing the duty escalator and bringing in minimum unit pricing in England, a targeted and proven measure for reducing alcohol harm. Our health and prosperity go hand-in-hand.”

Why is alcohol duty important?

The harm caused by alcohol is affecting millions of us every day. From low energy and anxiety to high blood pressure and cancer, alcohol affects us in so many ways.

As well as the social cost, alcohol harm also has a huge economic impact, costing an estimated £33 billion each year across the UK. By comparison, Alcohol Duty raises only £12.6 billion. That is why it’s so important that health and wellbeing is put above the huge profits of big alcohol companies.

Raising alcohol duty is one of the most effective and cost-effective ways to reduce alcohol harm, by:

• Increasing the price of alcohol, which has become more affordable compared to food and other drinks. Cheaper alcohol leads to an increase in consumption, which increases harm at both an individual and population level. Increasing the price will decrease purchasing, consumption, and subsequent problems.
• Providing tax receipts which can be used to cover the costs of alcohol harm through funding prevention, treatment, and public services. Cutting the real terms alcohol duty rates in the Spring 2024 Budget was estimated by the Government to cost the Treasury £1.7 billion between 2024-2029.
• Encouraging producers to reformulate their drinks to lower their strength, which is better for public health.

What comes next?

Alcohol Change UK’s calls on Alcohol Duty remain unchanged, as described in our consultation response to the Autumn Budget 2024 and Spending Review. We will also continue to call for a reduction in alcohol’s availability, affordability, and marketing.

Today’s announcement is a step in the right direction for the nation’s health. Alcohol harm costs the UK an estimated £33 billion each year, yet only around £12.6 billion was raised by alcohol duty for HM Treasury last year. The Autumn Budget was an opportunity to do better, and we remain cautiously optimistic that the new Labour Government will listen to the evidence and enact policies to reduce alcohol harm.

In the detail of the Autumn Budget, the Government stated that while they are cutting duty on draught products, they have also heard representations to increase alcohol duty by more than inflation to tackle increasing alcohol-related deaths, as well as economic inactivity.

As such, Alcohol Change UK is expecting further announcements on alcohol harm prevention, through the Health Mission Board, the Change NHS 10-Year Plan consultation, and an expected decision on treatment services as part of the Spending Review to be concluded in Spring 2025. Alcohol Change UK remains ready to work with policymakers to ensure that evidence-based policies are enacted to reduce the harms caused by alcohol. Our health and prosperity go hand in hand.