Chancellor scraps beer duty escalator

George Osborne has announced the government will scrap the beer duty escalator that saw beer duty increased at 2% above inflation.

The beer duty escalator would have seen 3p added to the price of a pint of beer in September, this will now not go ahead.

The chancellor further pleased the beer lobby by announcing a 1p cut in beer duty, which will come into place on Sunday, with the chancellor adding that he expects this to be immediately passed on to the consumer.

Brigid Simmonds, the chief executive of 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.”

The duty escalators on wine and spirits will stay in place “as previously announced”.

The chancellor confirmed that the government is still investigating options to deal with the problems caused by cheap and discounted alcohol, but added that “responsible drinkers should not pay the price.”

In other measures the chancellor announced that he would cancel the rise in fuel duty that was planned for September, which would be “a £7 saving when filling up the petrol tank” of an average family car.

From next year the personal allowance of income tax will rise to £10,000, which means no income tax will be collected on the first £10,000 of people’s salaries.

Mr Osborne also said corporation tax will be reduced by a further 1% to 20% in April 2015, while small company and main rates of corporation tax will be merged at 20p.

And in a further boost to small businesses the government’s new Employment Allowance will take the first £2,000 off the employer National Insurance bill of every company in the country. Around 450,000 small businesses – one third of all employers – will pay no employer National Insurance at all after the introduction of Employment Allowance in April next year.

The chancellor closed his Budget statement by saying: “This is a Budget that doesn’t duck our nation’s problems. It confronts them head on. It’s a Budget for an aspiration nation.”

Reacting to the statement, Labour leader Ed Miliband said: “This is the Chancellor’s fourth Budget but one thing unites them all; every Budget, he comes to this House and things are worse not better for this country.”