The Government announced the increase which you mention in last year’s Pre-Budget Report to counter potential price reductions caused by the new 15% rate of Value Added Tax. The Liberal Democrats tabled amendments to the Finance Bill to try and prevent these increases because whilst the VAT cut is expected to be temporary the beer duty increase is not.
As with Post Offices, good pubs are an asset to the communities they serve. They are also important small businesses: they provide jobs and support our local economy. It is crucial therefore that we support them. My concern is that tax rises on beer will harm pubs which are already struggling in difficult economic circumstances and closing at a record rate. They will also damage smaller independent beer breweries.
The current Axe the Beer Tax campaign being led by the British Beer & Pub Association and the Campaign for Real Ale is attributing the financial difficulties experienced by British pubs solely to the rate of beer duty. Yet research by the Fair Pint campaign has revealed that pub companies are typically selling beer at twice the price a barrel that tenants could purchase it on the open market.
In addition many pub chains have been raising rent and other costs, forcing tenant landlords and publicans into heavy debt. I have been told by landlords in my constituency of the worries they face due to the increasing costs heaped upon them by the pub chains. Clearly the pub companies need to be held to account for the high price of beer.
There is genuine concern, about excessive alcohol consumption and the impact that it is having on behaviour in public places. But there is little evidence to suggest that the higher taxes in the Budget will have a significant impact on binge drinking, and the suspicion must be that the Government’s primary motivation was to raise additional revenue.
We need to see a broader and more intelligent response to binge drinking. This should include more being done to prevent alcohol sales to under-18s, the introduction of new social minimum pricing measures to stop irresponsible pricing by supermarkets and better enforcement of existing laws which prevent bars from selling alcohol to customers who are clearly drunk.
