THE Government has given Burton’s pubs and breweries an unexpected 1p CUT in beer duty.
Chancellor George Osborne told the House of Commons yesterday that the reduction — the first since 1959 — would come into effect on Sunday.
He also used his Budget statement to abolish the duty escalator, which has forced up the amount of tax levied on beer by inflation-busting levels every year since 2008.
Simon Cox, managing director of Burton-based brewer Molson Coors, said: “This cut in beer duty is a very welcome move to help get a great British industry back into growth.
“We are pleased the Chancellor has listened to Britain’s beer drinkers.”
The industry was bracing itself for a 3p duty hike that would have come into effect if Mr Osborne had not cancelled the escalator.
Andy Slee, a director of pub chain Punch Taverns, which has its head office in Burton’s Centrum 100 business park, said: “Our customers will be raising a glass to the Chancellor following his welcome decision to scrap the beer duty escalator and knock a penny off a pint of beer.
“Osborne has delivered a welcome break for pub landlords. But that good work could be undone if the Government presses ahead with more bureaucracy and legislation on an already hard-pressed pub sector.”
Praise for the Chancellor’s deer duty decision continued.
Nik Antona, a national director of the Campaign for Real Ale (CAMRA) pressure group and spokesman for its Burton and South Derbyshire branch, said: “It was a momentous moment. It was frankly unbelievable.
“I will be going out to have a pint soon to toast the Chancellor.”
The campaign to abolish the beer duty escalator, led largely by CAMRA, saw more than 108,000 people sign a petition on the Downing Street website. Eight thousand consumers also wrote letters to their MPs calling for the escalator’s abolition and 1,000 campaigners marched on the Houses of Parliament in December to lobby 200 politicians.
“It was a wave of pressure the Chancellor simply could not ignore,” Mr Antona said. “We are ecstatic he has listened to reason and we hope we will now see a surge in the number of people going to their local pubs.
“We now have a chance of retaining the pub as an affordable place for the average drinker.”
The escalator was introduced by Labour in 2008 and it caused duty to increase by two per cent each year, plus the rate of inflation. It was allowed to continue by the coalition government until yesterday.
It is estimated 6,000 pubs closed and beer sales fell by 16 per cent while the escalator remained in place, forcing up prices every single year. But the British Beer and Pub Association, the industry body, claims 5,000 jobs would be saved within one year now the escalator has been abolished.
The issue was twice debated by MPs: once in the House of Commons and, more recently, in Westminster Hall. On both occasions, politicians voted to review beer duty.
Burton MP Andrew Griffiths, chairman of the parliamentary beer group, who was publicly thanked by the industry yesterday for his part in the duty campaign, said: “I am jubilant because of the Chancellor’s decision.
“It exceeded all our wildest expectations. Nobody expected such a positive and helpful announcement for the brewing and pub industry.
“This has been the culmination of a two-year campaign to get the duty escalator scrapped. People constantly said we were wasting our time because there was no way the Treasury would give in.
“To see the escalator abolished as well as a cut in duty is like all our Christmases have come at once. This was a Budget for brewers and publicans.”
Mr Osborne’s announcement was met with large cheers in the House of Commons yesterday afternoon. The duty escalator will remain in place for other alcoholic drinks.
THE BUDGET AT A GLANCE:
Beer duty escalator is abolished and beer duty is to be cut by 1p from Sunday.
Scheduled autumn fuel duty rise is scrapped.
Income tax threshold to be increased to £10,000 by next year.
Economic growth is predicted to be just 0.6 per cent this year — down massively on the original 1.2 per cent forecast.
Chancellor George Osborne promises an extra £3 billon a year for infrastructure spending from 2015.
Public sector pay increase cap of one per cent is to remain in place until 2016.
Corporation tax is cut to 20 per cent from 2015.
Tax-free childcare vouchers worth £1,200 per child are to be introduced.
A new help-to-buy scheme worth £130 billion in loans is to be launched to help those struggling to gather a deposit for a mortgage.
The flat-rate pension of £144 a week has been brought forward to 2016.
A cap on the cost of social care is set at £72,000. Threshold for means testing of help is raised from £23,000 to £72,000.
The Chancellor said the deficit has been cut by a third from 11.2 per cent of gross domestic product in 2009-10 to 7.4 per cent this year.
Public sector net debt is not expected to fall until 2017-18.