Chancellor Rachel Reeves has announced that the price of a pint will drop by 1p following a fall in the draught duty.

It comes as the Labour government announced their first budget in 15 years, with their last in 2010 under Gordon Brown.

Taking to the House of Commons to announce the Autumn Budget, Reeves confirmed that draught duty on alcoholic drinks will fall by 1.7%.

Reeves said: "Nearly two-thirds of alcoholic drinks sold in pubs are served on draught.

"So today, instead of uprating these products in line with inflation, I am cutting draught duty by 1.7%, which means a penny off a pint in the pub."

The Chancellor's announcement gained big cheers from MPs in the House of Commons.

She added that the Government will renew the tobacco duty escalator for the remainder of the Parliament at RPI (Retail Prices Index) plus 2%, increase duty by a further 10% on hand-rolling tobacco this year and introduce a flat-rate duty on all vaping liquid from October 2026.

She added: “Alongside an additional one-off increase in tobacco duty to maintain the incentive to give up smoking.

“And we will increase the soft drinks industry levy to account for inflation since it was introduced, as well as increasing the duty in line with CPI (Consumer Prices Index) each year going forward. These measures will raise nearly £1 billion per year by the end of the forecast period.”

 

On supporting electric vehicle purchases, Ms Reeves said: “I will maintain incentives for electric vehicles in company car tax from 2028 and increase the differential between fully electric and other vehicles in the first year rates of vehicle excise duty from April 2025.

“These measures will raise around £400 million by the end of the forecast period.”

Universal Credit claimants get £420 boost in Budget

More than a million households in receipt of Universal Credit will benefit from changes to the system announced by Chancellor Rachel Reeves today.

Ms Reeves, giving her first budget as Chancellor, announced that Labour will be lowering the cap on deductions that can be taken from benefit payments by up to £420 a year.

It is estimated that the change will benefit around 1.2 million households across the country, including 700,000 families with children.

Making the announcement during today’s Budget, the Chancellor said: "I can today announce that we are introducing a new Fair Repayment Rate to reduce the level of debt repayments that can be taken from a household’s Universal Credit payment each month from 25% to 15% of their standard allowance.

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"This means that 1.2 million of the poorest households will keep more of their award each month lifting children out of poverty and those who benefit will gain an average of £420 a year."

The new Fair Repayment Rate will come into force in April 2025, with the deductions cap set at 15 per cent as opposed to 25 per cent.

This is money the government can take off a Universal Credit claimant's allowance to help them make debt repayments.