Beer duty escalator scrapped and beer duty to fall by 1p a pint

The duty on a pint of beer is to fall by 1p, Chancellor George Osborne has confirmed as part of today's Budget.

In a widely-expected move, the unpopular beer duty escalator, which has seen the price of a pint rise by 2% above the rate of inflation ever since it was introduced by the last Labour Government, has been scrapped.

But duty on other forms of alcohol has increased. Duty on cider will rise by 2p, wine will climb by 10p, and spirits up by 38p.

Osborne said he recognised the tough time pubs had endured over the past few years and had listened to MPs including Andrew Griffiths, MP for Burton and Uttoxeter, which is home to some of Britain's biggest brewers.

Meanwhile other highlights in the Budget included a scrapping of the planned rise in fuel duty in September, and a drop in corporation tax by April 2015 to 20% by April 2015.

And Osborne's biggest tax cut in the Budget was a cut of up to £2,000 on employer national insurance contributions for every company in the country.

Growth for this year was forecast to be 0.6%, 1.8% in 2014 and 2.3% in 2015.

Reacting on Twitter, the Hobgoblin brand of beer, brewed by Wychwood, which fronted a campaign to scrap the beery duty escalator congratulated MPs Andrew Griffiths and Greg Mulholland who were also vocal campaigners.

Meanwhile, Nigel Wright, chief operating officer of managed pub & bar group TCG, said: "It's welcome news that we will be cutting beer prices for our customers. Consumer confidence is fragile and we were already looking at ways we could absorb part of the expected duty increase in some of our local and community pubs rather than pass it on in full. It sounds as though the Chancellor has listened to the pub trade's concerns that the role of pubs as an important community asset, as well as a major employer, needs to be supported."

Tony Jennings chief executive of Budweiser Budvar UK described the Chancellor's reduction in beer duty as "the first tentative step to repairing the horrendous economic damage that successive governments have done to the pub trade and the brewing industry." He said: "I think the Chancellor finally realised that he was in real danger of killing the goose laying the golden eggs".

Ufi Ibrahim Chief Executive of the British Hospitality Association welcomed the abolition of the beer escalator and duty cut on beer, but was disappointed the Chancellor did not go further to help hospitality businesses.

She added: "We welcome the prospect of the Employment Allowance from 2014 as the £2,000 National Insurance cut will help the large majority of our hospitality employers who are small and micro businesses.We also welcome the further drop in corporation tax.

And Paul Easton, head of business rates at the Edward Symmons group, said it was disappointing that the chancellor had not addressed business rates.

He said: "There will be widespread disappointment that, as anticipated by many ratepayers, business groups and the property profession, the Chancellor has decided to focus in other directions and there is nothing that will help the hard pressed business ratepayer and ease any pain they have particularly with the postponement of the next revaluation from 2015 to 2017."

More reaction will be added as Caterer and Hotelkeeper gets it.