The Chancellor brought some cheer to the nation’s beer drinkers by scrapping a duty escalator blamed for closing pubs – and going further by cutting duty by 1p.
The beer industry and campaign groups have been warning the Government that the escalator, which has added 2% to the price of a pint since it was introduced by Labour in 2008, was forcing pubs out of business.
The Campaign for Real Ale (Camra) gathered more than 100,000 names on a petition which led to a parliamentary debate last year.
Camra pointed out that beer duty has risen 42% since 2008, adding that 18 pubs a week are closing.
George Osborne told MPs that 10,000 pubs have closed in the past decade.
Duty on alcohol will not be cut, but the Chancellor said the beer duty escalator will be scrapped, preventing a 3p rise this year.
Mr Osborne drew cheers from MPs when he said he intended to go further, by cutting beer duty 1p from Sunday evening.
“We are pleased the Chancellor has listened to Britain’s beer drinkers and we are grateful to our local MP, Andrew Griffiths, for his tireless efforts to champion beer.”
Brigid Simmonds, chief executive of the British Beer & Pub Association, said: “This is absolutely brilliant news, and it will make George Osborne the toast of Britain’s pubs today. By cutting the tax on beer, he has moved to boost jobs in Britain’s pubs at a time when it is most needed.
“In also abolishing the beer tax escalator, the Chancellor has ended a hugely damaging policy that would have made Britain’s beer the most heavily taxed in Europe.
“This will protect thousands of jobs this year, and will allow us to create many new jobs in this brilliant industry.
“I want to pay tribute to the hundreds of thousands of people who have supported this campaign. This has been a broad and persuasive campaign uniting the industry and consumers. I hope this heralds the start of a long-term change that recognises the benefits of beer and pubs, for the economy, and for society.”
Mike Benner, chief executive of Camra, said: “This is a momentous day for Britain’s beer drinkers, who will tonight be raising a glass to the Chancellor for axing this damaging tax escalator and helping keep pub-going affordable for hard-pressed consumers. This decision will keep the lid on the cost of a pint down the pub.
“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.
“Today’s decision is a huge triumph for Camra’s pub campaigners who have been building overwhelming public support for a fair deal for beer and pubs, pub by pub and beer festival by beer festival.”
Airline groups were disappointed that the Chancellor put “beer before aviation” by making no changes to the air passenger duty (APD) airport departure tax that is due to rise again next month.
Dale Keller, chief executive of airline group BAR UK, said: “Just because the industry was fully expecting a slap in the face from the Treasury does not make it any more palatable. It’s beyond belief that the Chancellor has put beer before aviation.”