Spring Budget 2023: Freeze in draught beer duty but no business energy support

The chancellor has announced a freeze on draught beer but failed to address the impact of rising costs, the increase in corporation tax and the cut in business energy bill support in today’s Spring Budget.

 

He told the House of Commons the government remained “vigilant and won’t hesitate to take whatever steps necessary for economic stability”, adding the UK wasn't expected to enter a technical recession this year.

 

There will be a tax cut on draught beer sold in pubs from 1 August under the ‘New Brexit Pubs Guarantee’, in recognition of the country’s “most treasured institutions: the great British Pub”.

 

This will mean that the duty on draught products in pubs will be up to 11p lower than the duty posed on supermarkets.

 

The 5p discount per litre on petrol and diesel will also remain in place for another 12 months, with Hunt citing “now is not the right time to uprate duty”.

 

Although energy price guarantee for households will remain at £2,500 for the next three months, there was no further clarification on the cut in energy bill support for businesses announced in January.

 

As it stands, the reduction in energy bill support is due come into force next month.

 

The chancellor also confirmed there would be an increase in corporation tax from 19% to 25% in April, marking the end of a two year “super-deduction” policy that offered 130% tax relief on companies.

 

The “super-deduction” measure will instead be replaced by a full capital expensing policy for the next three years.

 

Every pound that a company invests in plant, machinery and IT will be deducted from taxable profits, amounting to a corporation tax cut of £9b.

 

However, it was not made clear whether this would cover hospitality investment.

 

Hunt added that the government would deliver 12 new investment zones – dubbed “12 potential Canary Wharfs” – which will receive £80m over the next five years.

 

These will be located in Liverpool, North East, South Yorkshire, West Yorkshire, West Midlands, East Midlands, Greater Manchester, Tees Valley, and one each in Scotland, Wales and Northern Ireland.

 

He has also pledged a £400m support package that will go towards mental health and muscular skeletal resources to avoid workers being “forced to leave work for back pain or mental health issues”.

 

He added that the Budget would provide 30 hours of weekly free childcare to working parents of one and two-year-olds in Britain in a bid to save household income.