Budget proves disappointing for pubs
Chancellor George Osborne's 2012 Budget has proved to be yet another disappointing one for pubs, having appeared to make no changes to the way in which alcohol is taxed.
That means that the beer duty escalator, which many pub industry figures have called on the Government to scrap, remains in place and duty will rise again by 2% above inflation.
Meanwhile, the Machine Games Duty, which affects the sort of gaming machines used in pubs, will rise to 20%.
The immediate reaction on Twitter from pub industry figures was not favourable. Brigid Simmonds, chief executive of the British Beer and Pub Association (BBPA), called the lack of action on beer duty "very disappointing" and warned it would result in job cuts. She also said the machine games tax was "far too high" and that 15% would have been more reasonable.
Meanwhile the King's Head hotel in Ross on Wye, Herefordshire (@kingsheadhotel), reacting to the rise in beer duty, said: "Another 10p on the price of a pint, thanks George."
And Alex Routledge (@HardknottAlex), a brewer from Lancashire-based brewery Hardknott, pointed out: "If you want to make the same profit on the beer you are selling tomorrow as you made today, you must increase your prices by 9%."
In opening his Budget, Osborne said it would "unashamedly back business" and also promised a simpler tax system that made businesses more competitive.
He did offer some measures to support smaller businesses, promising that businesses with an annual turnover below £77,000 would be taxed on the the basis of cash passing through the business.
And he also offered a doubling in the reduction of corporation tax to 2%, meaning that it will fall to 24% from April this year, before dropping to 22% by 2014.
Meanwhile, there was also the prospect of changes to the way in which hot takeaway food, which still attracts 20% VAT, is taxed. Osborne acknowledged that it was an anomaly that supermarket takeway food avoided the VAT charge and indicated that he would publish plans to help remove some anomalies like this, although he did not detail how the Treasury planned to go about this.
And economic growth was forecast to be slightly stronger this year than previously expected, at 0.8%, before rising to 2% next year, 2.7% in 2014, and 3% in 2015.
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By Neil Gerrard
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