Just months after George Osborne pledged support for the hardworking owners of hospitality businesses across the country in his Autumn Statement, the Chancellor is preparing to saddle them with the much-hated beer duty escalator in March’s Budget.
New figures uncovered by the ‘Call Time On Duty’ campaign using the Government’s own revenue forecasts reveal the true extent of the financial damage this will cause, and business owners and industry body are dually asking the Government to reconsider.
Sandia Chang, co-owner of London restaurant Bubbledogs, said: “Running a successful restaurant depends on the hard work and passion of dozens of people. It is frustrating when this hard work is undermined by unreasonable taxes on products we depend on to make a profit.
“Pubs, cafes and restaurants are actually the sort of enterprising small businesses that the Government should support. I’d ask Mr Osborne to reconsider his alcohol super tax.”
Job creation
Introduced in 2008, the alcohol duty escalator has increased the tax on alcohol by 2 per cent above inflation every year and, under current plans, is due to do so again in the 2014 Budget. Whilst beer was removed from the duty escalator in the 2013 Budget, tax on wine has increased by 50 per cent and tax on spirits by 44 per cent in the past five years.
Pubs, bars and restaurants already contribute around £3.5bn in alcohol duty a year. But despite the Government’s current stance to keep the escalator, recent independent research from Ernst & Young found that removing it would actually boost Government finances by £230m and create around 6,000 new jobs.
Miles Beale, chief executive of the Wine & Spirit Trade Association - which launched the Call Time On Duty campaign last month - said: “George Osborne has committed to helping pubs, bars and restaurants. He can do so this March by abandoning plans to hike up their tax bill.
“Calling a halt to the alcohol super tax and ending the duty escalator will help businesses, improve Government finances and create jobs. It’s time to call time on duty.”
The campaign group is urging supporters to email their local MP and ask them to write to the Chancellor through the calltimeonduty.co.uk website, calling for the alcohol super tax to be scrapped in the upcoming Budget.
EDM 892
One organisation that has already done just that is the British Beer & Pub Association (BBPA). Chief executive Brigid Simmonds has written to MPs urging them to support a Parliamentary motion, calling for a beer duty freeze in the Budget on 20 March.
Early Day Motion 892 has been tabled by Andrew Griffiths MP and already has the support of 24 other MPs from six political parties. It calls on the Government to sustain the momentum created by the 2013 beer duty cut by once again freezing the escalator, which the BBPA says would secure over 2,000 jobs.
“I hope as many MPs as possible will join calls for a freeze in this year’s Budget, which means we need to urge our MPs to support EDM 892,” said Simmonds. “Last year’s cut gave the industry a real confidence boost, but another freeze will allow us to create more jobs, boost the economy and put money back into people’s pockets.”
Call Time on Duty's figures were calculated from ONS data for the financial year 2012/2013 as well as data from Nielson and CGA strategy.