It was announced in the Budget proposal on March 20, 2013, that the government would be scrapping the beer tax escalator of 2% over inflation ever year. A move welcomed by a loud “Cheers!” by everyone involved in the Real Ale industry.
A measure imposed under labour back in 2008, and signed on until 2015, the tax has seen prices rocketing for everyone from the customer to the landlord, while brewers are stuck trying to compete in corporate market. In total since its introduction, the average price of a pint has risen by a staggering 40%.
Such rises were, frankly, unsustainable from the start. The pub industry was crumbling at a rate of 16 closures per week by the end of 2012. A staggering 5,000 have closed in total.
The move to scrap the added duty will aim to slowly reduce these closures, find even level, and keep it there at the very least. Those pubs already struggling to keep their heads above water will now have the opportunity to get themselves afloat.
Going one step further, the chancellor George Osborne added: “But I’m going to go one step further, and I am going to cut beer duty by 1p.
“I expect it to be passed on in full to customers.”
Better get the penny jars at the ready.
CAMRA, naturally, greeted the news ecstatically. Chief Executive Mike Benner, said: “This is a momentous day for Britain’s beer drinkers, who will be raising a glass to the chancellor for axing this damaging tax escalator and helping keep pub-going affordable for hard-pressed consumers.
“Since the duty escalator was introduced in 2008, 5,800 pubs have been forced to call last orders for good. What could have been the final nail in the coffin for our pubs has been decisively avoided by the chancellor in a move that will spark celebration in pubs across the UK.”
“Scrapping the beer duty escalator, combined with a 1p cut, is a massive vote of confidence in British pubs and will lead to an increase in pub going and more money in the Chancellor’s coffers.”
The CAMRA E-Petition gathered approximately 109,000 signatures, which prompted the Chancellor to drastically re-think his stance from last year: that the escalator would be kept firmly in place. Over 8,000 also wrote to their local MP’s to lobby them to make a stand against the escalator.
If that doesn’t show the community spirit that we all know and associate with Real Ale, then I don’t know what does.