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Changes to the tax system will now take into account the strength of a drink rather than the type of drink it is. The changes were a centerpiece of Sunak’s hour-long address to lawmakers in which he increased spending on a range of pet projects following a stronger-than-expected economic recovery from the worst of the pandemic.

Sunak criticized the current tax system, which raises more than 12 billion pounds ($ 17 billion) a year, as obsolete, adding that the changes would not have been possible if Britain had remained in the European Union. Beer duties were first introduced in 1643 by his predecessors in Parliament, when they first levied an alcohol tax to fund the Roundhead armies during the English Civil War against the Cavaliers of Charles I.

“Our new system will be designed around a common sense principle: the stronger the drink, the higher the rate,” said teetotaler Sunak.

The changes, which will take effect from February 2023, potentially represent good news for true beer, rosé and sparkling wine drinkers; bad news for those who prefer something a little stronger like certain red wines, port or sherry.

The alcohol tax changes have certainly picked up more of Sunak’s words than environmental issues, even as the UK is set to host the UN climate summit in the Scottish city of Glasgow in A few days.

Overall, Sunak painted a relatively rosy picture of the state of the UK economy after the country’s deepest recession in around 300 years following the pandemic. The economy, which suffered the worst recession among the industrialized Group of Seven countries last year, has recovered in recent months after the lockdown restrictions were lifted.

Sunak said independent government forecasters at the Office for Budget Responsibility forecast 6.5% growth this year, up from 4% just a few months ago, and that growth will be 6% next year. .

He also said borrowing and debt would be lower as a proportion of national income than previously thought over the coming years, an improvement Sunak used to lavish money on new hospital equipment. local community football pitches, as well as Prime Minister Boris Johnson. long-term priorities to ‘level’ prosperity in the UK

“He used this windfall to spend a lot more, especially over the next few years,” said Torsten Bell, executive director of the Resolution Foundation Think Thank. “The lasting effect of this additional spending is to allow it to partially reverse some of its own spending. Decisions.”

In his speech, Sunak said his controversial temporary cut in government spending on overseas aid to 0.5% of national income was projected to return to the previous level of 0.7% by 2024. / 2025. He also said he would make the welfare program more generous for low-income families no later than December, just weeks after a pandemic-related increase ended for all claimants.

“Today’s budget does not draw a line under COVID. We have tough months ahead, ”Sunak said. “But today’s budget begins the work of preparing for a new post-COVID economy.”

Given that inflation is expected to rise further over the next few months, potentially to over 5%, one wonders whether the wage increases will be enough to keep up with inflation.

Rachel Reeves, Treasury spokesperson for the main opposition Labor Party, said struggling families must think Sunak “lives in a parallel universe” if he thought the measures would offset the price hike and previous ones tax increases.

“Taxes on those with the broadest shoulders, those who derive their income from stocks and stocks and dividends and real estate portfolios, they are hardly spared,” she said. “We have a government that is synonymous with waste, cronyism and vanity projects.


ABC News

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