MPs call time on above-inflation beer tax

08-Nov-2012 - Last updated on 09-Nov-2012 at 10:48 GMT

Endangered species? The Nags Head in Belgravia, London

MPs have called for an end to above-inflation beer tax to protect the brewing industry and stop Britain’s pubs going out of business.

Under the current beer duty escalator tax, prices rise annually by 2% plus inflation, which means the price of a pint in the UK rises by between 5p and 10p a year.

Conservative MP Andrew Griffiths, who chaired the debate in parliament last week (November 1), said: “Scrapping the beer duty escalator would save thousands of jobs in the first year alone and stop the closure of hundreds of pubs.

“This is a huge opportunity to bring balance and fairness into the duty system and to support our pubs and breweries.”

100,000 people

The debate came after more than 100,000 people signed an e-petition against the current beer duty escalator, which is forcing beer prices to levels consumers cannot afford to pay and forcing many pubs to close.

The price increases are forcing 18 pubs out of business a week and it is only a matter of time before brewers feel the effects too, warned the pressure group Campaign for Real Ale (CAMRA).

There are 1,009 breweries in the UK, amounting to one per every 50 pubs.

But many brewers will face the challenge of finding new outlets to stock their beer, as more pubs will be forced to shut under the current beer tax, warned CAMRA.

Jon Howard, CAMRA press manager, said: “This affects the whole industry, from grain to glass.

“It is simple economics: the more pubs that close, the bigger the threat will become for brewers.”

Pub closures

CAMRA’s latest statistics reveal that 450 pubs across the country have closed since March, as they struggle against the burden of taxation, low supermarket pricing and poor consumer confidence.

The Pub Tracker, produced by CAMRA and ‘on-trade’ consultancy CGA Strategy, predicts the rate of pub closures will continue to get worse unless the government re-thinks its beer tax escalator.

“We have seen 4,500 pubs close since 2008. If changes are not made, we will see several thousand more pubs in the next year,” said Howard.

Brigid Simmonds, chief executive at the British Beer and Pub Association, called on chancellor George Osborne to put an end to the beer duty escalator.

“The chancellor must listen to the thousands of people now calling for change, so the sector can grow,” she said.

MPs’ decision to support the thousands who signed the e-petition will put growing pressure on the chancellor to scrap the escalator tax in his autumn statement on December 5.

Pubs – in numbers