Freeze Beer Tax now or sacrifice 16,000 jobs, says BBPA

10th February 2012, 11:15am

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% 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% 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% 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 said the government's priorities need to change: "We are facing a further, punitive tax rise of over 5% 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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