Budget 2014 – freeze in beer duty would secure 2,400 jobs this year alone, Britain’s brewers tell Treasury Minister

A freeze in beer duty would build on the success of last year’s historic Budget duty cut – promoting jobs, growth, and investment in Britain’s vital brewing and pub sector. This was the message to the Treasury from Britain’s brewers and pubs today, as they put their compelling Budget case to Economic Secretary to the Treasury, Nicky Morgan MP.

 

 

Industry CEOs told Nicky Morgan that a duty freeze in 2014 would lead to 2,400 additional jobs in the first year alone, at virtually no cost (£4 million) to the Government, according to new research from independent experts, Oxford Economics. This would provide a further boost to the industry and would be warmly welcomed by British beer drinkers and pubgoers.

 

 

British beer remains hugely overtaxed, with British beer drinkers paying 42 per cent of the entire EU beer duty bill. For every pint sold in the pub the Government receives over 50 times more in tax revenues than the brewer retains in profit. Nearly half of brewer turnover, and one pound in every three spent in pubs, goes to the Exchequer.

 

 

Last year’s duty cut has led to renewed confidence within the sector. Earlier this week, the British Beer and Pub Association reported that beer sales had grown for the second successive quarter – the first time this has happened in ten years. Companies have been committing to reducing prices, increasing investment and creating additional jobs, but a duty hike in March could rapidly undo these benefits. A duty freeze, however, would create jobs, especially for young people, boost the economy and put money back in people’s pockets.

 

 

Brigid Simmonds, Chief Executive of the British Beer & Pub Association, comments:

 

 

“There is a compelling case for a beer duty freeze. The Government has made an excellent start, in abolishing the beer duty escalator and with the historic cut in duty last year. It has been a real boost to jobs and growth in the sector, at a time when the economy most needs it.

 

 

“The recovery remains fragile, but we can continue this good news story for the Government, with a further duty freeze. And in avoiding further damage to beer and pub businesses, a  freeze can be achieved with virtually no cost to the Treasury. It is a win-win situation for the Government.”

 

Ends

 

For further information please contact:

 

 

 

Neil Williams, Head of Media: (020) 7627 9156 / 07974 249 779

 

Gareth Barrett, Public Affairs Manager: Tel: (020) 7627 9154

 

Sophie McIntyre, Communications & Campaigns Officer: Tel: (020) 7627 9155

 

 

 

Notes to editors:

 

For further information on line, see www.beerandpub.com/thebeerstory

 

 

For a pdf version of the new joint BBPP, SIBA, CAMRA,  Pubs of Ulster ‘Beer Story – Fact s on Tap’ leaflet and infographics, click here.

 

 

UK beer duty – key facts:

 

·         The beer and pub sector supports over 900,000 jobs, 46 per cent of which are held by 16-24 year olds.

 

·         Beer and pubs contribute £22 billion to UK GDP and generate £11 billion in tax revenue.

 

·         82 per cent of the beer sold in Britain is made here in Britain.

 

·         1 job in brewing generates 1 job in agriculture, 1 in the supply chain, 1 in retailing and 18 in pubs.

 

·         From 2008 to 2013, beer tax increased by 42 per cent, with beer sales down 21 per cent, 7,000 pubs closing, and 58,000 UK jobs lost.

 

·         A beer duty freeze in 2014/15 would cost the Treasury just £4 million, according to Oxford Economics.

 

·         Beer duty rates in the UK are still among the highest of any country in Europe

 

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Impact of a freeze in beer duty in Budget 2014 and Budget 2015

 

 

Source: Oxford Economics

 

Other Budget proposals put forward by the BBPA include:

 

·         Continue to work with industry on efforts to tackle alcohol duty fraud. The brewing industry has welcomed the Government’s proposals to tackle alcohol duty fraud and remains committed to supporting this endeavour.

 

·         Extend small business rate relief into the next Parliament. The measures outlined in the 2013 Autumn Statement were appreciated by industry as a response to the burden placed on small businesses, particularly in the retail sector. SBRR is worth £27 million to the pub sector. The BBPA urges Government to provide ongoing support in reducing the impact of business rates on pubs.

 

·         No further increase in the rate of Machine Games Duty (MGD). The industry believes that the change from the previous regime has not been cost-neutral due to the administrative cost involved. Therefore a period of stability is needed to ensure that pubs are not worse off through the introduction of MGD.

 

·         Consider the case for reducing the rate of VAT for food sold in the hospitality sector over the medium-term. It is recognised that there is a significant cost attached to such a proposal but there are also very great opportunities in terms of jobs and growth.