Updated: Wed, 06 Mar 2013 11:52:22 GMT | By pa.press.net

Beer tax cuts urged to save pubs

Government backbenchers have urged Chancellor George Osborne to slash beer taxes in a bid to raise cheer in community pubs across the country.


Several MPs have called for a reduction in beer taxes ahead of the Budget

Several MPs have called for a reduction in beer taxes ahead of the Budget

Government backbenchers have urged Chancellor George Osborne to slash beer taxes in a bid to raise cheer in community pubs across the country.

But 15 days before the Budget, Treasury Minister Sajid Javid said he could do little more than promise the MPs the Government was aware of concerns on the alcohol duty escalator, which increases taxes on beer above inflation.

Raising a debate in Westminster Hall, Marcus Jones, Tory MP for Nuneaton, said the Chancellor should scrap the escalator to help preserve community pubs and slow down the rate of closures.

Mr Jones said: "This is also having a very detrimental effect on the fabric of our society because there is a high social impact when a pub closes."

He added: "I appreciate the work the Government has done in reducing the deficit, which has given us far lower interest rates and obviously helped the whole economy ... but I would also urge you to assess this beer duty escalator and beer duty in general."

Mr Jones said up to 10,000 jobs could be lost as a result of the continuing impact of the escalator so he called for the industry to be "given a break".

Tories Nigel Mills, MP for Amber Valley; Glyn Davies, MP for Montgomeryshire; and Andrew Griffiths, MP for Burton, joined the calls, alongside Liberal Democrat Greg Mulholland, MP for Leeds North West.

But Mr Javid said he could not give any firm commitments but highlighted a range of things the Government had done to support businesses in general, such as cutting corporation tax, and for pubs in particular, such as reforms to gaming machines.

He said: "If this Government was to cancel the 2% rises for beer that are planned, it would cost the Exchequer £35 million next year and £70 million the following year. Given the sums involved it would naturally be prudent for the Government to think carefully of the consequences of making any such tax changes.

"The Government does however keep all taxes under review and we regularly the monitor the impact of alcohol duty rates on both the industry and consumers."

1Comment
05/03/2013 17:31
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So, the Treasury can't reduce the tax on beer because it would lose £35 million in revenue. But how much more revenue is it losing if pubs continue to shut at the rate they are? Strange, the reason given for cutting the higher band tax rate was that people would try to avoid paying it and revenue would be lost. So, we cut taxes on the rich in order to raise money, but we raise the tax on beer in order to raise money. There's a message here somewhere. Glass of champagne anyone?
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