Chancellor eyes up another 'sin tax' with hike on alcohol duty

The government are reportedly eyeing up another 'sin tax' with the Chancellor set to consider a hike on alcohol duty as Labour's war on pubs continues. 

The potential tax hike comes after the government previously confirmed it was considering a ban on cigarettes in beer gardens. 

Pubgoers across the nation are waiting with baited breath for Rachel Reeves long-awaited budget - which is due next month. 

As a part of the upcoming budget, Ms Reeves is yet to rule out a putting up taxes on alcohol in an effort to plug an alleged £22billion hole in the public finances. 

The Daily Telegraph reported that the Chancellor has been presented with forecasts which show a raise in alcohol duty could raise an extra £800million next year. 

However, official figures show that the last time the tax was raised in 2023 tax takings to plummet by a staggering £1.3billion as Brits enjoyed their pints at home. 

This has led, leading figures in the hospitality sector to warn that a higher alcohol duty will lead to lower sales in the already crisis hit sector. 

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Speaking to the Telegraph Miles Beale, the chief executive of the Wine and Spirits Trade Association (WSTA), said: '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 £1.3 billion. 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.'

To help the industry, the WSTA are urging the new Labour government to consider a two-year freeze in duties. 

Alcohol duty was frozen for nearly three years between 2020 and 2023  until then chancellor Jeremy Hunt increased the tax once again. 

Figures show between September 2023 and August 2024 alcohol duty was down to £11.8billion from £13.1billion during the same period the year before that. 

Last month, the Prime Minister Keir Starmer confirmed he is considering tougher laws on smoking, which could see Brits barred from lighting up in beer gardens or outside stadiums.

Sir Keir told journalists on a visit to Paris he is looking at changes as he pointed to a 'huge burden' on the NHS.

According to leaked plans, the Government could extend the indoor smoking ban, which was introduced under the previous Labour government in 2007, to cover other locations.

This may include small parks, outdoor restaurants or even shisha bars, as well as areas outside hospitals and football grounds.

According to The Times, Sir Chris Whitty - the chief medical officer for England - has been personally pushing for the ban on smoking in some outdoor places.

It is said to have been considered but rejected by former PM Rishi Sunak while he was in Downing Street.