Boris Johnson today revealed Rishi Sunak is considering rolling out lower rates of alcohol duty for pubs than for supermarkets as the Chancellor prepares to unveil his Budget on March 3.
Tory MPs have urged the Government to treat pubs differently to large retailers to stop them being ‘undercut by cheap supermarket booze’.
Mr Johnson said at PMQs at lunchtime that a review into so-called ‘differentiation’ has been carried out and Mr Sunak is ‘looking very closely at the findings’.
It came amid claims that Mr Sunak will extend the stamp duty holiday until the end of June to give a boost to the housing market.
Last July the Chancellor exempted most buyers from the levy if they completed their transactions before March 31, 2021 – saving people up to £15,000 – and leaving would-be homeowners racing to meet the deadline.
But sources told The Times he is now preparing to use the Budget to extend the holiday by another three months.
The policy covers the sale of property worth up to £500,000, and would cost around £1billion to implement.
Critics believe that failing to extend the holiday would result in a cliff edge, jeopardising hundreds of thousands of sales.
Conservative MPs are hoping Mr Sunak will use the Budget to bring forward a range of measures to give Britain a boost in the spring as lockdown rules are lifted and families and businesses look to recover from the pandemic.
Chancellor Rishi Sunak will unveil his latest Budget next week on March 3 amid reports he will extend a stamp duty holiday
Tory MP Giles Watling raised the alcohol duty issue at PMQs and said: ‘My right honourable friend will know that pubs have been closing all over Britain for decades now, tearing the hearts out of communities.
‘This terrible pandemic has made things even worse but part of the problem is undercutting by cheap supermarket booze.
‘Now we are out of the EU surely we can do as we please on beer duty.
‘Differentiation in favour of on sales could deliver great benefits to pubs in communities like Clacton at nil cost to the taxpayer.
‘Will my right honourable friend commit ministers to look at this differentiation proposal?’
Mr Johnson replied: ‘He makes an extremely good point which I am sure will be heard with great interest around the country.
‘There is just such a review being carried out after consulting pub owners and brewers and others and I know that the Chancellor is looking very closely at the findings.’
Changes to the alcohol duty system to help pubs would be welcomed by many Tory MPs, as would an extension to the stamp duty holiday.
Recent analysis by the Centre for Policy Studies (CPS) think tank said the tax break had propelled house sales to their highest level since before the 2007 financial crisis.
After an initial slump in sales between April and June 2020, the number of transactions increased from 132,090 in the second quarter to 225,870 in the third quarter and 316,300 by the end of quarter four – the highest level since 2007.
The think tank’s research shows that stamp duty revenues actually rose by 27 per cent in Q3 compared to Q2, from £1.1billion to £1.35billion, and suggests they will rise again in Q4 given the continued increase in transactions.
The CPS is calling on ministers to either permanently increase the threshold on primary residences to £500,000 – at a cost of £3billion – or abolish it altogether.
Jethro Elsden, CPS data analyst and the report’s author, said scrapping the holiday would be a ‘sledgehammer blow to the housing market’.
The Chancellor is also set to use the Budget to extend the furlough scheme until the end of June, costing £4billion a month.
The business rates holiday for the retail, hospitality and leisure sectors will also be expanded at a cost of £1billion a month, the Times said.
And the VAT cut for hospitality and tourism would also last until the end of June, costing £200million a month.
Mr Sunak is also said to be considering putting up corporation tax to as much as 25 per cent over the course of the Parliament.
Recent analysis by the Centre for Policy Studies (CPS) think tank said the tax break had propelled house sales to their highest level since before the 2007 financial crisis
Sir Keir Starmer today told the PM that ‘now is not the time’ for tax rises ahead of the Budget.
Sir Keir told the Commons: ‘Turning to next week’s Budget, now I don’t expect the Prime Minister to pre-empt what’s in the Budget. If I want that, I can read it on the front page of The Times.
‘But can the Prime Minister at least agree with me today that now is not the time for tax rises for families and for businesses?’
Mr Johnson responded: ‘The Budget is happening next week, it’s not a date that is concealed from (Sir Keir), he knows when it is… but it’s preposterous for him to talk about tax rises when he stood on a manifesto only a year ago, little over a year ago, to put up taxes by the biggest amount in the history of this country.
‘It is the Labour Party, his Labour council in Camden, that puts up taxes across the country, that is the way Labour behave and it’s thanks to prudent fiscal management by this Government that we’ve been able to fight this pandemic in the way that we have.’