The British Beer and Pub Association (BBPA) has again called on the Government to scrap the beer duty escalator, as it emerged that inflation hit 4% in January.
Meanwhile the Retail Prices Index (RPI) measure of inflation (which includes mortagage payments) climbed to 5.1%. And the figures showed that the price of alcohol rose by 6.7% from December to January - a record monthly rise.
VAT has already added 6p to a pub pint this year, pushing the typical price through the £3 mark. The BBPA warned that a 7% rise would mean that beer tax has risen by 35% since the start of 2008, when the beer tax escalator kicked in. .
BBPA Chief Executive, Brigid Simmonds said: "With these inflation figures, and along with the VAT increase, the Chancellor is set to introduce the biggest ever rise in tax on beer in a single year. The Government is creating a vicious circle of rising taxes causing further rises in inflation, which leads to yet more beer tax hikes in the future.
"At the end of this chain reaction, real people in real pubs lose their jobs, and vital community assets are lost.
"Yet there is a far better way forward. Scrapping the 'escalator' would give an immediate lifeline to struggling pubs, and could save over 10,000 UK jobs in a single stroke, bringing in more government revenues. It is surely time to call a halt to a policy that rightly belongs in the past."
By Neil Gerrard
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