Chancellor Kwasi Kwarteng revealed an 18-month transitional measure for wine duty. He also said the Government would extend draught relief to cover smaller kegs of 20 litres and above, to help smaller breweries.
The increases planned in the duty rates for cider, wine, beer and spirits will all be axed, he added.
Kwarteng laid out an economic strategy for a “new era”, which included a decrease of regulation and slashed taxes.
He also reiterated the Government’s energy relief scheme for businesses, which will see energy prices for firms, including those in hospitality, cut. He called the energy crisis the “biggest issue” the country was facing.
The Government has pledged to work with suppliers to reduce wholesale energy costs as well as the significant rise in bills many businesses have seen.
Energy help
This package is similar to the Energy Price Guarantee for households. Kwarteng estimated the energy plan should reduce peak inflation by 5%.
The support was designed to reduce cost of living pressures, and “will help millions of people and business right across the country with the cost of energy,” said Kwarteng.
“Let no one doubt, that during the worst energy crisis in generations, this Government is on the side of the British people,” he added.
The estimated cost of energy plans, based on recent prices, was £60bn, but the Chancellor expected the costs to come down as Government negotiated long-term energy contracts with suppliers.
He compared the help with energy costs to Government’s “sizeable intervention” during the pandemic.
Borrowing powers
“In the context of a global energy crisis, it is entirely appropriate for the Government to use our borrowing powers to fund temporary measures to support families and businesses.
“[…] The heavy price of inaction would have been far greater than the cost of these schemes.”
He also claimed UK economic growth was not as high as it should be. Higher taxes on capital and on labour had lowered returns on investment and work, reducing economic incentive and hampering growth, according to Kwarteng.
He aimed to reach a trend rate of 2.5% growth through tax incentives and reform, but added, “none of that is going to happen overnight”.
To do this the Government would reduce benefits for people who were not fulfilling their job search commitment and will ask 120,000 people on universal credit to seek more, or better paid work, or have benefits reduced. Support will also be provided for unemployed over 50s.
Furthermore, Government was working with areas of the country including Norfolk and the Wes Midlands to create investment zones. This means on newly occupied business premises, there will be no businesses rates to pay.
Furthermore, if a business hires new employee on tax site, for first £50,000 they earn, the employer will pay no national insurance.