Escalator ignored as Osborne bails out Broken Britain with beer tokens…
By: JimOldfield
December 6th, 2012
Chancellor George Osborne has delivered an Autumn Statement snub to the tens of thousands of Britons demanding an end to the hated “Beer Escalator” tax which brewing bosses have warned is handicapping the industry and the economy at large.
Despite more than 104,000 voters signing a Government e-petition and forcing a debate in the Commons just last month, Osborne once more chose to ignore the industry’s united voice.
His statement concentrated on issues such as performance-related pay for teachers, small business rates and changes to corporation tax – but made no mention of a review of the escalator duty.
The British Beer & Pub Association (BBPA) expressed “disappointment” at his decision not to at least review the escalator.
BBPA chief executive Brigid Simmonds, said: “This is a missed opportunity. Employment could be boosted by 5,000, this year alone, with a freeze in Beer Tax – mostly jobs for younger people in Britain’s pubs.
“The Coalition should distance itself from the previous Government’s tax policy, and the Chancellor should now heed calls from MPs of all parties for a review.
“However, there are announcements to welcome. As an industry that pays £11 billion in taxes each year – including excise duty, VAT, national insurance, business rates and corporation taxes – the beer and pub sector also supports the Government’s intention to ensure that all businesses contribute their fair share to support the economy.
“It is also reassuring to see that Government acknowledges that money does need to be invested in enforcement to crack down on tax avoidance, rather than lumbering UK businesses with the bill.”
The BBPA welcomed Osborne’s extension of small business rate relief to April 2014, which it says will support pubs.
But it pointed out that the lack of action on beer duty flew in the face of the Government’s decision to cancel a rise in fuel duty – which the BBPA said was an admission that automatic tax hikes are an inappropriate way to manage tax policy, in vital parts of the UK economy.
It added: “With around one million UK jobs dependent on the brewing and pub sector the BBPA wants a similar approach for beer”.
The BBPA, CAMRA and other industry bodies – along with drinkers – are united in condemnation of the tax, which has meant a third of the price of a pint now goes straight into the Treasury’s pocket.
In the debate, on November 1, MPs were unanimous in calling for a review of the policy – that has seen the tax on beer rise by 42 per cent since the March 2008 Budget.
But the new Economic Secretary to the Treasury, Sajid Javid, ignored pleas from MPs from all three parties.
He had been warned that continuation of the duty – which adds two per cent duty above the rate of inflation every year onto every pint sold – would cost at least 5,000 jobs this year, and around 16,000 jobs before 2015.
But Osborne’s department insists the tax remains part of the Government’s plan to cut the national debt and Javid responded by saying that abolishing the escalator would cost the treasury £35m next year, which the Government would have recoup by making public sector cuts.
Putting the British duty in persepctive, the French Parliament this week hiked that country’s beer tax by a massive 160 per cent… but the move STILL left our tax more than THREE times the French duty!
Brigid Simmonds said: “Even with this huge rise, UK beer tax is still more than three times higher than in France – around 39 pence per pint.
“And there must be more than a degree of Schadenfreude in Germany about Beer Tax, as the UK rate is now an astonishing THIRTEEN times higher than theirs.”
