E-Malt.com News article: UK: New report shows ending beer duty ‘escalator’ would save thousands of jobs without any overall loss of revenue to the Treasure

A clear and compelling case has been made for a freeze in the tax on beer: in a new report published on March, 4 by a leading industry trade body. In ‘Beer, Pubs & the Budget 2013’, the British Beer & Pub Association says that ending the Government’s controversial and unpopular beer duty ‘escalator’ in the March Budget would save thousands of jobs - without any overall loss of revenue to the Treasury.

If the Government goes ahead with plans to raise the tax on beer by five per cent in the Budget, this will bring the rise in Beer Tax to a staggering 50 per cent over the past five years. The policy is having a damaging effect on jobs in Britain’s pubs, says the BBPA, where 70 per cent of drinks’ sales are beer – the vast majority brewed here in Britain. Research in the report says that if beer duty were frozen in the Budget, this would save over 5,000 jobs, increasing to nearly 10,000 by 2014/15 – mostly jobs for younger people in pubs.

The report also finds that far from raising more in taxes, the policy is failing to bring in additional revenues. Leading researchers Oxford Economics estimate that despite a slight drop in beer duty revenues, a tax freeze would raise an additional £5 million in revenue across the whole tax base, mainly through a significant boost to employment tax revenues, and avoiding social security payments from reduced employment in pubs. In contrast, even the Treasury’s own current forecasts show that less will be raised from beer duty in 2013/14 compared with the previous year – yet further tax hikes are planned.

The report shows that beer taxes in Britain have now reached unprecedented levels. Beer Tax is higher than in any other EU country bar Finland, and is now 13 times higher than in Germany. British Brewers now pay an astonishing 50 per cent of their turnover in beer duty, damaging growth and investment in this key, British-made product. UK beer drinkers now pay 40 per cent of the beer tax across the EU, but only consume 13% of its beer.

BBPA Chief Executive, Brigid Simmonds comments:

“Far from hitting the bottom line, a duty freeze would raise revenues, protect thousands of jobs, allow us to create yet more jobs and help one of our greatest national assets – our network of much-loved British pubs, still struggling in difficult economic times. I hope this compelling analysis will persuade the Government that now is the time for change.”

06 March, 2013