Beer Duty and Pubs

Pubs make an enormous contribution to our economy and our society. They are an important part of our culture and heritage, and a crucial source of local employment. It is worrying that over 6,000 pubs and bars closed from 2010 to 2023, with many still struggling to recover from the pandemic, as well as having been hit by the cost-of-living crisis.

I know that the Government is committed to supporting the pubs that are so important to our local communities, and took action last autumn to support them by cutting alcohol duty on draught products – which make up around 60% of the alcoholic drinks sold in pubs – reducing it by 1p per average strength pint. This came into effect in February 2025, and increases the relief available on draught products to 13.9%. It will reduce businesses’ total duty bill by over £85 million a year. With regards to a further cut in duty charged on draught products, the Government keeps all areas of the tax system under review and makes decisions on tax policy at fiscal events. I know that the Government welcomes representations from the beer and pub sectors in advance of the Budget.

More broadly, the Government is working to support pubs through the Hospitality Support Scheme. Working with Pub is the Hub, the Government is providing funds to help community pubs adapt to changing local needs, ensuring these vital social hubs continue delivering for their communities.

I also recognise the concerns pubs have about business rates. Our business rates system disincentivises investment and creates uncertainty, and is particularly unfair on high street businesses. I welcome the Government’s plan that from 2026-27, it will introduce permanently lower tax rates for hospitality properties. This will enable them to benefit from much-needed certainty and support, and will be funded by introducing a higher multiplier on the most valuable properties, such as the warehouses used by large online companies. I understand that the new levels will be announced at the 2025 Autumn Budget.

In the meantime, hospitality businesses were facing a cliff edge in April, with temporary business rates reliefs due to expire. I therefore also welcome that the Government has offered a 40% discount to retail, hospitality and leisure properties up to a cash cap of £110,000 per business in 20256-26, as well as freezing the small business multiplier. This is a support package worth over £1.6 billion in 2025-26 and will save the average pub over £3,300 in 2025.

I will continue to support measures that I believe will play a crucial role in supporting pubs to thrive once again.