![Hands holding glasses with beer on a table](https://media.guim.co.uk/fd2adce9b709610b65de150a4069438b86abf2dd/107_1_2003_1202/1000.jpg)
A freeze on alcohol duty is to be extended for a further six months as the government seeks to help pubs, restaurants, brewers and distilleries weather the looming recession.
The Treasury minister James Cartlidge told MPs there would be no increases in duty on beers, wine, cider and spirits until August 2023 – when a new simplified system comes into force – even if the chancellor announces new rates in next year’s budget.
Jeremy Hunt will announce his first full budget on 15 March, giving him the chance to respond to what is expected to be a recession-hit winter for the UK economy.
However, Cartlidge said the government wanted to provide reassurance for businesses affected by the double whammy of a cost of living crisis and travel disruption during their busiest period of the year.
“The alcohol sector is vital to our country’s social fabric and supports thousands of jobs – we have listened to pubs, breweries and industry reps concerned about their future as they get ready for the new, simpler, alcohol tax system taking effect from August,” Cartlidge said.
The chancellor said on Monday that he had asked the Office for Budget Responsibility (OBR) to prepare a comprehensive set of forecasts as he sought to further restore the Conservative party’s reputation for financial orthodoxy.
Hunt announced a package of measures in last month’s autumn statement designed to placate the financial markets after Liz Truss’s turbulent six-week period in office.
The March fiscal event will allow Hunt to take stock of subsequent developments, including the cost of energy and the impact of interest rate increases from the Bank of England.
The chancellor will also have to decide whether to boost investment incentives to business to offset the planned increase in corporation tax from 19% to 25%, which will come into force in April.
In a written statement to MPs, Hunt said: “Today I can inform the house that I have asked the Office for Budget Responsibility to prepare a forecast for 15 March 2023 to accompany a spring budget.
“This forecast, in addition to the forecast that took place in November 2022, will fulfil the obligation for the OBR to produce at least two forecasts in a financial year, as is required by legislation.”
Hunt – Britain’s fourth chancellor of 2022 – raised taxes and toughened up the government’s spending plans in the wake of Kwasi Kwarteng’s badly received September mini-budget. Even so, the impact of what Hunt described as “difficult” decisions was mostly deferred until after the likely date of the next general election – expected to be in 2024.
In November, the OBR forecast unemployment would rise by 505,000 from 3.5%, to peak at 4.9% in the third quarter of 2024.
Inflation was expected to be 9.1% over the course of this year and 7.4% next year, contributing to a dramatic fall in living standards.
With plans for almost £25bn in tax increases and more than £30bn in spending cuts by 2027-28, the OBR said tax as a share of the economy’s output would peak at 37.5% in 2025-25 – a post-second world war high.