Beer Duty Debate To Continue As Ministers Vote To Review Tax

Hop To It! Commons Tells Government To Review Beer Tax Escalator

The Treasury is unlikely to remove the crippling beer duty escalator tax despite an impassioned 180 minute debate in the House of Commons and a unanimous vote for the government to review it.

In a motion brought before the house by MPs Andrew Griffiths and Greg Mulholland on 1 November, the government was asked to review the beer duty escalator.

The escalator, introduced by the Labour government in 2008, increases duty on alcohol by 2% above inflation each year.

Pint for pint, British beer drinkers now pay nine times more in beer tax than the French, and 13 times more than the Germans. In the EU, only Finland slaps a higher tax on beer, as Brits pay 40% of all EU beer tax.

A petition calling for the debate has received more than 104,00 signatures, thanks in part to campaigning from lobby groups such as the Campaign for Real Ale (Camra).

Speaking to the house on 1 November, Griffiths said: "The Treasury's own projections show the beer duty escalator will bring in no extra money at all, but it will cost jobs at breweries...all we're calling for is fairness when it comes to beer duty."

Mulholland added: "I'm astounded by the level of understanding here today in the house, clearly the chamber gets it, and now it's our job to make sure the Treasury gets it.

"Most pubs get 60% of their income from beer; they rely on selling it more than wine, cider or anything else. A fairer taxation would help in terms of growth...and employment, particularly of young people."

The house heard how more than one million people are employed by the pub industry, half of which are young people.

"Oxford Economics has shown that by removing this escalator, the government would save 5,000 jobs in the first year and stop the closure of hundreds of pubs - this is a huge opportunity to bring fairness and balance to the situation," Mulholland continued.

In a lively and good-natured exchange, several MPs came forward to offer their insights on the importance of breweries and pubs in their local area, as well as the impact supermarkets' cheap offers were having on breweries, pubs and the health of the nation.

When asked by the speaker, all ministers on both sides of the house were in favour of urging the government to review its position on the escalator.

There was a huge reaction on twitter, with many using the hashtag #saveourpint.

Despite the strength of the votes, Treasury minister Sajid Javid's response was muted.

After thanking the ministers for the debate, and the 104,000 members of the public for their vote to bring the debate before the house, Javid laboured the point that the escalator was a policy the government had inherited from the previous Labour government.

He also stated that cancelling the escalator would remove £35m from the 2013 budget and £70m in 2014, which would need to be recouped elsewhere.

"The sad truth is pubs have been closing for many years due to many changes in society, not just beer duties," he said, before highlighting the various small business tax benefits available to the smaller breweries and pubs.

He also lauded the government's plan to introduce a minimum price for units of alcohol, which he said would benefit pubs as the problem of supermarkets' heavily discounted alcohol products would be removed.

"I have been in absolute listening mode, and this has been a very valuable debate," Javid concluded.

Griffiths told the house he was "disappointed" that the minister wasn't able to offer more positive news, and vowed to keep campaigning for the government to scrap the escalator.


What's Hot