Chancellor defends Prosecco price cut claiming it is 'not the preserve of wealthy elites'

28 October 2021, 09:34 | Updated: 28 October 2021, 09:50

Rishi Sunak says Brexit means alcohol taxes can be redesigned

By Sophie Barnett

Chancellor Rishi Sunak has defended cutting the price of a bottle of Prosecco by 80p in his latest Budget, claiming it is "not the preserve of wealthy elites".

The chancellor was grilled by Nick Ferrari on LBC after he set out his plan for the nation's finances in a speech on Wednesday.

Rishi Sunak told MPs in his Budget speech that a planned increase in duty on spirits such as Scotch whisky, wine, cider and beer will be cancelled, representing a tax cut worth £3 billion.

3p will be taken off a pint of draught beer and sparkling wine will become cheaper.

The Chancellor said changes to duties will see taxes increase on some higher strength drinks, such as some red wine and "white ciders".

However, consumers of some lower strength products, such as rose, fruit ciders, liqueurs, and lower strength beers and wines, "will pay less", he said.

The chancellor, speaking from Bury, told Nick we currently have a system which "makes no sense".

Read more: Chancellor announces 'historic' change to booze taxes with 3p taken off price of pint

Read more: Budget 2021: What were the key announcements?

Ben Kentish breaks down the budget announcements for listeners.

"We currently tax sparkling wines, like Prosecco, 28 per cent more than still wines, even if they have the same alcohol content.

"Now that we have left the EU we have the freedom to design a much better system of taxing alcohol, and the system we have come up with has a simple principle; the higher the strength, the higher the rate.

"It's a simpler, fairer, healthier system and it's also going to support pubs."

Defending his decision to drop the duty on a bottle of Prosecco, Mr Sunak told LBC it is the "fair and simple thing to do".

"Prosecco sales, sparkling wine sales, have doubled in the last five years," he said.

"They are not the preserve of wealthy elites and I think actually it is totally misunderstanding the country to say that they are.

"One of the most popular things is Canti Prosecco, or I Heart Prosecco, it's about £7.50 a bottle. And lot's of us - not me obviously as a non-drinker - when things happen in our lives we want to celebrate, to cut 80 odd p of that bottle is meaningful and the fair and simple thing to do."

Read more: Chancellor faces questions on Budget after insisting 'our plan is working'

Nick Ferrari confronts Chancellor on high taxes

Setting out his Budget in a speech on Wednesday, Mr Sunak warned of "challenging months ahead" as the country continues its recovery from the coronavirus pandemic.

The Chancellor made a number of key announcements, including an increase in the minimum wage, a rise in per-pupil spending in schools and a cut to the taper rate for Universal Credit.

Read more: Changes to Universal Credit 'to make work pay' would be 'attractive', MP says

Shadow Chancellor reacts to yesterday's budget

Despite the Chancellor's promise that his "plan was working", the Office for Budget Responsibility (OBR) said the Budget would leave the overall tax burden at its highest since the final period of Clement Attlee's post-war Labour administration 70 years ago.

This story is being updated