Rachel Reeves had been told to reverse the Conservatives’ controversial alcohol duty rise or face 9,000 pubs going out of business.
A survey of 201 pub landlords across the UK has revealed that one in five boozers believe that they will not survive the next year if the hike is kept in place.
In 2023, the Tories introduced a 10.1 per cent duty hike on spirits, which has been slammed by many as a “disastrous decision”.
Following its introduction, one in four pubs have said they are familiar with a distiller that has been forced to shut its doors.
Rachel Reeves told to immediately U-turn on booze tax Getty/PAIn the poll, conducted by the UK Spirits Alliance (UKSA), it also revealed that 58 per cent of pub owners are fearful of what the next year may hold.
In a letter to the Chancellor, gin, vodka and whisky makers warned her that “the future of this once booming craft distillery sector is at stake”.
The group, represented by the UK Spirits Alliance, wrote: “The disastrous decision by the previous Government to increase duty on spirits in 2023 by a historic 10.1 per cent not only heaped further pressure on struggling pubs, penalised consumers and drove up inflation – it led to a significant drop in much-needed tax revenue.
“We recognise your support for the sector, and we urge you to resist repeating the mistake of the previous Chancellor and instead reverse their short-sighted decision in your Autumn Budget.”
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In the poll, conducted by the UK Spirits Alliance (UKSA), it was also revealed that 58 per cent of pub owners are fearful of what the next year may hold
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Reeves has repeatedly said that she will need to make “difficult decisions” regarding tax when she delivers her first budget at the end of this month.
Whilst forecasts suggest that increasing the booze tax even further would raise £800million a year, leading figures in the alcohol industry have said that it would actually result in lower sales.
Megha Khanna, owner of the Gladstone Arms in London, told The Sun: “By choosing to support only beer and cider makers while raising taxes on other products, the previous Government damaged our pubs and bars and targeted those consumers who choose to enjoy a cocktail, gin and tonic or spritz.
“The Chancellor can back pubs, and the fantastic spirits makers that supply them, by reversing the disastrous decision by the last Government to hike duty by 10.1 per cent, which heaped pressure on pubs, slammed the breaks on the gin-boom, and ramped up inflation.”
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Miles Beale, the chief executive of the Wine and Spirits Trade Association (WSTA), said businesses were still struggling to cope with 2023’s increase.
He told The Telegraph: “Last year’s damaging reforms to the alcohol excise duty system, including the largest single duty hike in almost 50 years, have hit businesses, consumers and the Government purse.
“Prices have risen, sales are down and so is duty income by over £1.3billion.
“Increasing duty – which is the Government’s inherited policy – will serve only to reduce income to the Government further at a time it can least afford it.
“The WSTA is urging the Chancellor to announce a two-year freeze in duties, which it said would “keep prices stable while optimising government income.”
A Treasury spokesman said: “Thriving pubs are often at the heart of our communities and play a vital role in supporting economic growth across the UK. That’s why it is important for us to act on the challenges that they face, including through our national growth mission.
“Business is at the heart of that mission, which is why we have pledged to cap corporation tax at 25 per cent, make the business rates system fairer, and publish a business tax roadmap so that future investments can be planned with confidence.”