• Beer and pub industry plea to Treasury to save 16,000 UK jobs by 2015, by scrapping 
controversial tax ‘escalator’
• Most jobs saved would be those of younger people in pubs and would boost youth employment
• Beer Tax hikes now set for an astonishing 42 per cent rise since March 2008 if the Government does not change course – rise set to add up to ten pence to a pub pint
The beer and pub industry is demanding a freeze in the Government’s controversial beer duty ‘escalator’ to avoid the loss of 16,000 jobs. The British Beer & Pub association says the Government is shooting itself in the foot by clinging to the policy, with job losses likely to hit younger people working in pubs. Beer Tax hikes are now set to reach an astonishing 42 per cent since the Budget of March 2008, when the discredited ‘escalator’ policy was introduced by the previous government.
In a submission to the Government ahead of the March Budget, the BBPA makes clear the special relationship between beer and pubs. With beer accounting for seven out of every ten pub drinks sold, huge tax rises in beer have been shutting Britain’s much loved locals and costing jobs. With real incomes falling and VAT having already added six pence to a pint, the ‘escalator’ is long past its sell-by date, says the BBPA.
Duty and VAT have now reached an eye-watering £1.05 per pint, a level of tax that is now at a totally unsustainable level. At 12 times the beer duty level in Germany, Britain’s beer drinkers are now paying 40 per cent of the entire EU duty bill, despite only drinking 13 per cent of the beer. As a result, beer sales have continued to fall, with the a drop of 3.4 per cent in pub sales in 2011 – equivalent to 140 million pints, fuelling the current loss of pubs, which is still running at 16 per week.
Instead the BBPA wants a growth strategy for pubs, which could secure 16,000 jobs over the next three years, mainly for young people, if the Government gets the policy right, by tackling both tax and red tape in the sector.
BBPA Chief Executive Brigid Simmonds comments: “We are facing a further, punitive tax rise of over five per cent in the Budget – so action is needed now. We need policies that support pubs, and to put an end to these totally unsustainable tax rises. We need a tax policy that creates vital jobs for young people, at a time when this should be the Government’s top priority.”
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For further information please contact:
David Wilson: Public Affairs Director Tel: 020 7627 9151
Neil Williams, Communications Manager Tel: (020) 7627 9156 / 07974 249 779
Gareth Barrett, Public Affairs Officer Tel: (020) 7627 9154
Notes to editors:
The British Beer & Pub Association is the UK’s leading organisation representing the brewing and pub sector. Its members account for 96 per cent of the beer brewed in the UK and around half of Britain’s 52,000 pubs.
Budget Submission 2012 – A Growth Strategy for Pubs is now available on the BBPA website here.
The beer story – facts on tap, a summary outlining the case for a freeze in duty published jointly by the BBPA, SIBA and CAMRA, is available on the BBPA website
Alongside a freeze in beer duty and the abolition of the escalator, the BBPA is calling for other measures to help pubs:
• A Machine Games Duty rate of no higher than 15% to ensure it is fiscally neutral and does not impose additional tax burdens on pubs and the removal of SWP machines from MGD;
• Further substantial reductions in the regulatory burden on the sector
• Serious consideration to be given to the potential for a reduced VAT rate on food and alcohol served in pubs
• Positive action to assist small pub businesses
• Discounted business rates for pubs which diversify and offer additional services to their local communities
• The retention of the current National Planning Policy Framework presumption in favour of sustainable development, which helps fuel business growth and diversification, particularly in rural areas.
Beer and the Budget – Key facts:
• Beer is a British product, and generates £8 billion in tax revenue every year
• The beer and pub sector supports almost 1 million jobs – 46 per cent of whom are 16-24 year olds
• The tax burden for beer, now at 50 per cent of turnover, is unsustainable
• Britons now pay 40 per cent of the entire beer duty bill in the European Union
• Beer supports pubs, as 68 per cent of pub alcohol sales are beer
• Since 2004, duty has risen by 50 per cent and 7,800 pubs have closed, with the loss of 78,000 jobs
• Pubs bring people together, boost local economies, and enrich local life
Neil Williams
Communications Manager
British Beer & Pub Association
020 7627 9156
07974 249 779