The British Beer and Pub Association (BBPA) has called on the Government to freeze beer duty and scrap the alcohol duty escalator as part of its Budget submission to the Treasury.
Scrapping the duty escalator in March would save more than 10,000 jobs, mostly in Britain's pubs, according to analysis by Oxford Economics. It would also generate an extra £40m in tax revenues for the Government, according to the BBPA.
Brigid Simmonds (pictured), BBPA chief executive, said: "The Government needs to recognise the vital role that Britain's beer and pub sector plays in the economy, and call time on further, punitive tax increases.
"As the beer escalator is predicated on 2% above inflation, we could see a rise of 7% in the tax on beer. When the duty escalator was first introduced inflation was considerably lower. Beer accounts for 60% of drinks sold in pubs, so fairer beer taxation is vital to their survival. On current policies, we are heading for the biggest single rise in Beer Tax in a year ever - something for which the Government will surely not want to be remembered.
"In just six years, 30% of pub beer sales have disappeared, with a devastating effect on pubs, jobs, and the nation's social life. Yet we've endured a 26% rise in Beer Tax since March 2008, and the arrival of the average £3 pint in pubs. The recent rise in VAT, which is hitting pub beer sales much harder than supermarkets, is also going to cost over 8,000 jobs.
Highlights of the BBPA's Budget submission include the following points:
● Scrapping plans for above-inflation duty increases would save more than 10,000 jobs (Oxford Economics)
● Freezing duty to generate up to £40m in extra tax revenues.
● The recent VAT rise will encourage drinking at home, and results in the loss of over 8,000 beer-related jobs.
● The drink of choice on a big night out is predominantly spirits, yet beer has endured an increasingly heavy tax burden in relation to spirits in recent years.
● Beer duty should be reduced in relation to spirits to encourage the consumption of lower-strength drinks, as in Ireland
● The threshold level of lower-rate taxes for beers should be raised from the current 2.8% abv, to drive growth in the lower-strength category.
● Lower VAT rates in the hospitality trade could drive economic growth, and should be examined by the Government.
● Progressive Beer Duty, while a welcome success should be reviewed to ensure there is a sustainable and fair structure for the long term.
By Neil Gerrard
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