Government considers pubs plan that would see alcohol duty frozen

The Government has discussed a giveaway for pubs which would see the business rates holiday extended and all alcohol duty frozen.

Treasury officials have been in talks with the hospitality industry to continue business rates relief and a VAT cut for pubs, restaurants and clubs beyond June 21 – when lockdown restrictions could be fully lifted – and potentially into the New Year, sources have told The Telegraph.

Beer and other alcohol duty could also be frozen in the Budget on Wednesday, although a proposed plan to cut tax on alcohol served in pubs while maintaining it on shop-bought drinks will not be included.

It came as 45 Conservative MPs Northern "Red Wall" seats urged Rishi Sunak, the Chancellor, to make "a bold move to reduce business rates" on retail as soon as possible.

However, the Treasury is concerned that a major extension of rates relief would mean a giveaway for supermarkets, which have profited during the pandemic and could not be legally segregated from any support package.

On Sunday, Mr Sunak signalled that the furlough scheme, bounceback loans, targeted VAT cuts and the stamp duty reductions would remain in place until June 21 to align them with Boris Johnson's roadmap from restrictions at an estimated cost of £15 billion.

However, he also prepared the ground for "stealth" rises in personal taxes and increases in corporation tax as he warned that he would "level" with the public over the challenge of repairing the economy after the "enormous shock" of the pandemic.

On Sunday, more than 60 female business leaders and MPs warned that the financial impact of the lockdown on women was being "overlooked".

In a letter to The Telegraph, leading names including Dame Helena Morrissey, Dame Jenni Murray and the former Home Secretary Amber Rudd urged the Government to commit to safeguarding the retail and beauty industries.