02 November 2012 10:11
The beer duty escalator is killing off pubs and harming the brewing industry, MPs were told yesterday, amidst calls for it to be scrapped altogether.
Cutting the annually increasing tax would encourage more responsible drinking as customers supped in pubs rather than at home, boost the economy – and raise more in tax for the Treasury, Conservative MP Andrew Griffiths claimed.
The escalator, launched in 2008 by then-chancellor Alistair Darling, hikes the price of a pint by 2% above inflation, and is due to last until 2014/15.
But MPs demanded a quick end to the scale, amid plummeting beer sales and as 16 pubs a week close.
Mr Griffiths, who chairs the all-party parliamentary group on beer, said: "Scrapping the beer duty escalator would save thousands of jobs in the first year alone and stop the closure of hundreds of pubs in all of our communities.
"This is a huge opportunity to bring balance and fairness into the duty system and to support our pubs and breweries."
The Burton MP was opening a backbench-led Commons debate, triggered after 104,000 people signed a Government e-petition demanding Westminster address the issue.
Mr Griffiths said beer duty had risen by a "crippling" 42% since 2008, with sales plunging 16% – the equivalent of 1.5 billion pints – depriving the Treasury of tax from lost sales.
Calls to axe the duty have attracted cross-party support in the run-up to Chancellor George Osborne's autumn statement on December 5th.
It has been revealed that 5,800 pubs have shut since the escalator's introduction four years ago, as pints became more expensive.
Mr Griffiths said 450 pubs had closed since March, with villages, suburbs and towns losing their traditional hubs.
"Those establishments are the heart of our communities. Not only do they provide employment, they provide an opportunity for people to come together to celebrate, to meet friends and they run local football clubs," he told MPs.
He said UK pubs and the brewing industry employed a million people – and attacked the widening gap between the price of a pint in pubs and the cost of cans in supermarkets.
"In the same way they (supermarkets) did with milk and our dairy farmers, they have driven the price down. Every time there is a duty increase, they have forced the brewers to stand that," added Mr Griffiths.
Greg Mulholland, the chairman of the All-Party Parliamentary Save the Pub Group and Lib Dem MP for Leeds North West, said from an economic point of view the beer duty escalator "simply doesn't make sense".
He said: "Now clearly incomes have fallen, inflation is higher and VAT has risen. The simple reality is that since 2004 beer duty rates have increased by 60%, and beer duty revenue by just 10%. That is actually a significant fall in real terms."
It is a tax, he added, that "simply doesn't add up".