ESCALATOR TAX: ‘I HEAR YOU … BUT THAT’S ALL!’
By: JimOldfield
November 1st, 2012
Beer tax row finally goes all the way to the top… but Minister won’t push stop button on stairway to hell
The wishes of over 104,000 people wanting an end to the beer duty escalator fell on deaf ears in Parliament today when the Treasury refused to consider scrapping the tax.
After a Commons debate lasting nearly three hours, new Economic Secretary to the Treasury, Sajid Javid, ignored pleas from MPs from all three parties to hold a review into the escalator, which pubs and brewers say is crippling the industry.
Despite listening to over 20 MPs, and a unanimous vote for a motion in favour of a review of the duty, Mr Javid said that the escalator – which adds two per cent duty above the rate of inflation every year onto every pint sold – remained part of the Government’s plan to cut the national debt.
However, MP Andrew Griffiths, who tabled the debate in response to the 104,880-name “stop the beer duty escalator ” e-petition, defiantly told his Conservative Party colleague: “We will not let it rest and we will continue the campaign”.
He told Mr Javid he was “disappointed” he was “not able to give more positive news from the dispatch box”, and added the matter concerned the “future of a central part of the community”.
Earlier Mr Javid had been warned by MPs that failure to scrap the tax escalator would cost at least 5,000 jobs this year, and around 16,000 jobs before 2015 if the escalator was not abolished.
MPs, including Burton MP Mr Griffiths and Greg Mulholland – chairman of the all-party parliamentary group Save The Pub – told the minister that decreasing beer sales, combined with pub closures meant the escalator would raise no money, but would cost jobs and stifle economic growth.
Mr Griffiths urged Mr Javid to seize the accolade of being “the man who saved the Great British pint”.
But Mr Javid responded by saying that abolishing the escalator would cost the treasury £35 million next year, which the Government would have recoup by making public sector cuts.
Beer duty has now risen by 42 per cent since the escalator was introduced in 2008.
British Beer & Pub Association (BBPA) chief executive Brigid Simmonds said afterwards: “In showing their support for a review of the duty escalator, which is urgently needed, MPs spoke up very strongly today to show the Government that this issue will just not go away.
“I am confident that any review, which we hope the Government will announce, will show that above-inflation increases in Beer Tax do not make sense – they would bring in no additional revenue for the Treasury, but at the same time threaten pubs, employment, and our great British brewing and pub industry. Instead, we could be generating growth, creating jobs, and investing in a real UK success story.”
SIBA chairman Keith Bott added: “We hope the Treasury appreciates the strength of feeling that has been expressed here today by members on both sides of the House. A review of the beer duty escalator is vital ahead of the next Budget:
“Britain’s pubs simply cannot survive these continued hikes which are putting turning a pint into an unaffordable luxury for many drinkers.
“We would also remind the Government that, according to their own estimates, the Exchequer will receive just £35m in additional duty from the escalator in 2013/14. This amount would be largely offset by the boost in sales and employment related taxes that a beer duty freeze would create.”
And CAMRA chairman Colin Valentine added: “At a time when Britain’s pub closure rate is back on the rise, any review must take into account the 5,800+ pubs which have closed since the Government’s punitive escalator system was introduced in 2008.
“It must also be reinforced that further planned increases will bring in no additional revenue for the next 3 years, and will only serve the purpose of harming many communities across Britain when their local pub is no longer able to run a viable business.”
The campaign group is now planning a mass Parliamentary lobby on December 12, with over 1,000 members expect to attend.
Hand-Pumped link:
Watch the debate on your PC
