Campaigners call for freeze on beer tax
Campaigners fighting for less tax and public spending waste joined forces with brewers in the West last night to call for Chancellor George Osborne and ‘spineless MPs’ to scrap the controversial escalator which guarantees the tax on beer will go up in next month’s budget.
The Taxpayers’ Alliance is joining the long-standing campaign from the pub and brewery industry and from real ale drinkers to stop the annual hike in taxes on a pint.
They have told the Chancellor to freeze tax on beer in the upcoming Budget, after figures showed that a third of the cost of a pint of ale goes straight to the taxman.
Tax on beer has increased by a staggering 42 per cent in the past four years and duty on beer is the second highest in Europe and ten times the level in Germany.
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One brewer in the region said the fixed beer duty escalator gave ‘spineless MPs’ the chance to duck making an annual decision on beer tax.
Taxpayers Alliance chief executive Matthew Sinclair launched a ‘mash beer tax’ campaign yesterday, saying it was partly responsible for Camra figures revealing that since the beer tax escalator was introduced in 2008, more than 5,800 pubs have closed. The escalator automatically hikes the duty by two per cent above inflation and is fixed until 2015.
“Beer is already taxed more in the UK than almost every other country in Europe. Yet another rise in beer duty at this year’s Budget would be a further blow to people already struggling with the increasing cost of living,” he said.
“It would also harm the scores of pubs whose existence is under threat because ever higher taxes are putting people off going for a drink.
“The abolition of the beer duty escalator is long overdue and a freeze in the rate at this year’s Budget would help people coping with so many other pressures on their finances,” he added.
Leading breweries in the South West such as Devizes-based Wadworth’s, Dorset-based Badger’s and Bath Ales have all called for the Government to scrap the escalator, saying it actually leads to a fall in tax revenue because jobs are being lost as pubs shut. While the amount taxed has risen by 42 per cent, the amount the Treasury is receiving has gone up by just eight per cent.
A spokesman for Bath Ales slammed MPs for continually putting up beer tax. “We would argue that the beer duty rise is wholly unjustified and against a backdrop of excessive beer duty rate rises year in year out,” he said.
“What a cop out this beer duty escalator is, allowing spineless MPs – our public servants – to hide behind bureaucracy and remove themselves from the real world.”
Jem Ham, managing director of Cheddar Ales, said: “Something like 20 per cent of our turnover goes to the Government as beer duty, and I can’t think of another business for whom that applies, apart perhaps from petrol stations and landfill.
“Our customers are 85 per cent pub-led and pubs are closing all the time. The duty affects the price, we have to pass it on, and that hits the pubs.”
Another Somerset managing director, Guy Newell, of Butcombe Brewery, said: “Freezing the duty would make a huge difference. It has gone up 42 per cent in four years, but it is debatable whether the Government is better off as a result. If you add VAT and the tax on diesel for delivery it is a ridiculous situation for breweries.”
Cleeve Palmer, sales and marketing director at Palmer’s brewery at Bridport, said: “The Chancellor has been told often enough to leave the drinks industry alone and hopefully this time he will do it.”