Chancellor ‘totally wrong to raise beer tax’, says BBPA

The latest outcry comes together with today’s release of the BBPA’s Beer Barometer, which shows that Britain’s pubs have seen a six per cent fall in beer sales in the first quarter of 2012.

“These figures show the Chancellor was totally wrong to raise beer tax again in his Budget,” said Brigid Simmonds, the BBPA’s chief executive. “This key British industry could be an engine of growth for the economy – but poor tax policy is damaging our potential.

“The public are getting behind calls for a change in policy, and signing the e-petition in their thousands. I hope people will continue to respond positively and back a tax freeze – and I hope the Government will listen.”

The recent Budget tax hike was made under the controversial ‘duty escalator’ policy, despite widespread calls to rein in the rises. The BBPA and Oxford Economics believe this decision will cost some 5,000 jobs in 2012 and 2013. A Government e-petition demanding an end to these punitive tax rises has already attracted over 28,000 signatures.

Some comfort...​

The BBPA believes that the current pressures on the beer and pub sector, on which almost one million jobs depend, further highlight the poor decision of the Government to raise Beer Tax by a further five per cent in the March Budget – making for a 42 per cent tax hike since March 2008.

There is, however,  some comfort in the figures from the Beer Barometer, in that beer sales are now falling at a slower rate than in the previous four years. Overall, beer sales fell by 1.4 per cent in the quarter compared to last year. In the year to March 2012, overall beer sales were down 2.9 per cent, following the 7 per cent rise in beer duty last March. 

The decline in pub sales amounts to 57 million less pints drank by Britain’s pub-goers, compared with last year’s first quarter.

BigHospitality’s beer tax timeline:​​

March 2008 –​ The discredited beer tax ‘escalator’ policy was introduced by the then-Chancellor Alistair Darling

March 2009 –​ Figures revealed that a record 2,000 pubs had closed since Chancellor Alistair Darling increased beer tax in the 2008 Budget, taking with them 20,000 industry jobs

April 2009 –​ The pub closures were revealed to have cost the Treasury £242m in lost tax revenue, while 90 per cent of the British public were calling for freeze on beer tax​

April 2009 –​ A poll commissioned by the Axe the Beer Tax – Save the Pub campaign revealed the majority of MPs opposed Alistair Darling’s plans to increase beer tax ahead of the 2009 Budget​

June 2009​ – More figures from the BBPA revealed that Britons are paying the third highest amount of beer tax on a single pint in the EU​ - nine times more than the Germans

December 2009 –​ The Chancellor confirmed that alcohol tax increases will remain in place​ after announcing in his Pre-Budget Report that the VAT rate will return to 17.5 per cent in January

March 2010​ – Budget 2010: Alcohol duty rose, as planned​

April 2010​ – More than 400 would-be MPs signed up to the BBPA’s I'm Backing the Pub campaign​

March 2011​ – The rate of pub closures slowed to 25 per week, although government revealed a seven per cent rise in beer tax in the budget​

March 2011​ – The pub industry gave its reaction to the 2011 Budget​, claiming that the continuation of the beer tax escalator will not only cost the Treasury money, but lose the pub industry ten thousand jobs in 2011

October 2011​ – More bad news. UK pub beer sales were down 4.3 per cent in the third quarter​ from the same period in 2010 – something the BBPA claimed could be put down to the tax escalator

November 2011​ - Chancellor George Osborne offered help to small and medium-size businesses in his autumn statement, but the BBPA urged action on the escalator​

February​ - Pub company Admiral Taverns announced it is to freeze the prices of a broad selection of its draught beers​ in an attempt to hit back at imminent increases in beer tax

February​ – Last orders: The British beer and pub industry has unanimously demanded a freeze in the Government’s controversial beer tax escalator​ ahead of the upcoming budget.

March​ – Budget 2012:​ Beer Tax hikes reach 42 per cent since the first stage of this timeline​