Osborne to cut beer duty in UK budget

The Chancellor George Osborne will “definitely” cut duty on beer for the third year in a row when he announces the UK Budget later this month, according to reports.

A drop in duty this year will make it a hat-trick of beer price cuts (Photo: Wiki)

The Sun has quoted one MP saying they would be “stunned” if the Chancellor did not make the cut in duty following what the newspaper describes as “a series of high-level Treasury talks” with MPs and industry figures. “I think it is definitely going to happen,” they said.

Campaigners and politicians have been trumpeting the benefits of further cuts in beer tax ahead of what could be Osborne’s last Budget, as May’s general election looms.

The Campaign for Real Ale (CAMRA) recently released figures showing that 1000 pubs have been saved and 16p knocked off the price of a pint since the duty escalator – a policy by which more tax was piled on to beer year-on-year – was scrapped and duty was cut by 2p per pint over the past two years.

Economists have also said the cuts made so far have added a boost to the industry which supports thousands of jobs across the UK, as people are more encouraged to drink in pubs than stay at home.

WSTA chief executive Miles Beale is pressuring the chancellor to make cuts to wine and spirits (Photo: WSTA)

Last week, CAMRA chief executive Tim Page said he wants to see any further cuts passed on to the consumer “so that pub-going remains an affordable activity”.

“At a time when there is concern about the number of people drinking excessively at home, the importance of pubs as places where you can drink responsibly in a social and community setting cannot be overstated,” he said.

CAMRA’s head of communications Tom Stainer told the drinks business today that, “whilst nothing is set in stone”, campaigners are “hopeful that the Chancellor will take this vital step to keeping the price of a pint affordable, which should in turn help the pub industry continue on the road to recovery.”

Last month the Wine and Spirit Trade Association and the Scotch Whisky Association, who are together campaigning for a duty cut in wine and whisky, also met with Treasury officials to put forward their case.

There are as yet no indications that wine and spirits will also see a tax cut.

The WSTA argues that today’s news shows the chancellor “understands the impact high duty rates are having on the British alcoholic drinks industry”, but are urging him to “go further than this” in his Budget on 18 March.

Chief executive Miles Beale told db, “We continue to urge the Chancellor to extend this cut to both wine and spirits that have seen duty increases of 54% and 44% respectively since 2008.

“A 2% cut for wine and beer could bring significant in terms of growth, jobs and growing contribution to the public finances.

“It would help to unlock over a further £1bn worth of duty every year; support businesses to grow and create jobs; as well as support pubs and bars, where wine and spirits make up 42% of the value of sales,” he said.