The Treasury is facing an alarming £150 million ‘black hole’ in the Budget this year, due to excessive increases in Beer Tax, it has been revealed. In a letter published in The Times today, 39 of the brewing and pub industry’s most senior executives warn against planned further rises in beer duty on 20th March.
The astonishing 42 per cent tax hikes imposed on British beer drinkers since 2008, coupled with -wayward estimates of what the tax rises will raise, have led to the huge shortfall in revenues this year. The industry is calling for the scrapping of the escalator in the Budget on 20th March, a move which would not hit the Treasury’s bottom line.
“Last year’s tax increase was expected to yield an additional £100 million. However, the Treasury’s own figures show it has seen declining revenues, estimated to be down £50 million by the end of the year,” the letter says.
“This unpopular policy will therefore have left a £150 million black hole in the Treasury’s accounts and cost 5,000 jobs, whilst making a pint in the pub an unaffordable luxury for many more people.”
Those who have signed, led by Jonathan Neame, Chairman of the British Beer & Pub Association and Chief Executive of Kent brewer Shepherd Neame, say that a freeze is essential to kick start growth in the thousands of enterprises throughout the brewing and pub supply chain.
“It is time to call time on the damaging beer duty escalator,” the letter concludes.