Pub leaders warn Chancellor over Budget

Over 30 leading brewing and pub company executives have signed a letter to the Chancellor George Osborne demanding that he reconsider the tax "onslaught" against the pub industry.

The Sunday Telegraph​ says it has seen a three-page letter from the British Beer & Pub Association (BBPA) to the Chancellor, which has been signed by executives from 33 brewers and pub companies, including Ted Tuppen of Enterprise Inns; Jeremy Blood of Mitchells & Butlers; Ralph Findlay of Marston's; and Jonathan Neame of Shepherd Neame.

In the letter, the executives warn the Chancellor that continued increases in beer duty do not bring in as much revenue as first estimated, while hurting an industry that is predominantly UK-based.

The executives also argue that the continuation of the beer duty escalator — the so-called "booze tax" — amounts to a 7.2% tax rise and is at odds with Mr Osborne's claims that his Budget focused on promoting growth and delivering new jobs in the private sector.

The newspaper also says that the letter demands that "a new and different approach" be taken by the Treasury when it comes to the industry, alleging that the "beer duty escalator does more harm than good".

Of the recent tax rise, the executives write: "This is not compatible with a Budget designed to promote growth and will have a devastating effect on our sector."

Pub jobs​

According to the report, the group of leading industry figures base their claims on research undertaken by Oxford Economics which shows that the beer and pub sector supports almost 1 million jobs in the UK.

It also argues that the trade is one of the UK's last great domestic industries, with 85% of beer sold in the UK actually made here.

The letter reportedly says: "The sector has the potential to sustain and create thousands more jobs, generate economic activity and help lead the country out of recession. But only if we have a fair policy environment."

According to the research carried out by Oxford Economics, if beer duty had been frozen last month, it would have saved 10,000 jobs in the sector in the current fiscal year, by having a positive effect on community pubs which are now destined to close.

Duty freeze​

In addition, it estimated that an additional £40m could have been generated for the Treasury by freezing the duty through additional tax revenues of beer sales and employment taxes.

The newspaper says that the letter goes on to point out that successive increases in beer duty over the last number of years have altered British drinking habits, with many more people buying alcohol in supermarkets to drink at home.

It also argues that only 30% of alcohol consumed in the UK is now served in pubs and bars, and points out that £1 of the price of the average pint now goes to the Exchequer in duty and VAT.