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Budget reaction: Pubs welcome beer duty cut

20 March 2014 by

There was a broad welcome for Chancellor George Osborne's Budget yesterday, with most commentators in the hospitality sector, particulary in pubs, expressing their satisfaction with a reduction in the rate of beer duty and the scrapping of the alcohol duty escalator.

However some were upset that the duty freeze on whisky and cider did not extend to other forms of alcohol.

Other key points in the Budget were:

  • A doubling of the investment allowance for businesses to £500,000 a year.
  • An extension of the government's grant to small businesses to support 100,000 apprenticeships.
  • A decision not to introduce a planned rise in fuel duty in September.

Bibendum Wine Ltd managing mirector, Michael Saunders

"I am delighted that the Government has listened to the WSTA's Call Time on Duty Campaign and scrapped the alcohol duty escalator. However, the decision to increase wine and spirits duty in line with inflation is disappointing.

"A recent Ernst and Young report had showed that freezing duty on wine and spirits would have created 6,000 new jobs and resulted in £230m extra revenue for the Treasury. Today's budget may be a step in the right direction but it still represents a missed opportunity."

Daniel Lyons, partner for indirect taxes at Deloitte

"Cheers will ring out across British pubs today as beer duty is cut by one pence. This brings the duty on a pint down by eight pence over this overnment's term, compared to what had been previously planned. We also heard that the alcohol escalator will be abolished and there will be a freeze for all spirits. Pubs play an important role providing jobs across the country and many of these will be protected following today's announcements. The West Country, in particular where cider producers have been impacted by the floods, will welcome the duty freeze on cider. It would appear that after the rain, comes the freeze."

Tim Hulme, chief executive of the British Institute of Innkeeping (BII)

"Today the chancellor has done something extremely positive for pubs and the tens of thousands of people who rely on them to make a living. Cutting duty for the second year running and freezing cider duty helps keep pub visits affordable for the British public at a time when many are still feeling the post-recessionary pinch. It also means that publicans don't have to face the impossible task of absorbing extra cost and making cut-backs at a time when they are playing such a vital role in creating new jobs to fuel the fledgling growth we're seeing in the UK economy. I am really heartened by the chancellor's continued support for our industry and the vital role pubs play within their communities."

Stephen Owens, director of Christie + Co

"The moves to freeze or lower duties are welcome for both consumers and producers, especially smaller brewers and the Scottish whisky and West Country cider producing regions.

"In addition, the extra money announced for flood defences, while not able to turn back the clock for the beleaguered regions, is welcome succour for the many pubs by seas and rivers that were affected by the harsh winter. This is especially good news when allied to the freeze on duties on cider, when much of the country's cider-producing region was underwater."

But Owens wared about the potential impact of an increase in minimum wage to £6.50 per hour. "While the impact on the pub sector is broadly neutral, any additional cost increases on the pub sector are generally unwelcome. And while cuts to energy costs were announced by the Chancellor in the Budget, these seemed to be aimed predominantly at large manufacturing industry or the personal consumer, so it'll be interesting if there is any great benefit to smaller businesses like pubs."

Nigel Wright, chief operating officer of managed pub and bar group TCG

"The Budget is really positive news for the trade. Another reduction in the rate of duty on beer, along with the freeze in cider duty, is particularly good news, especially in a World Cup year. A well-served pint at the pub is an essential accompaniment to meeting friends or watching the match for millions of consumers, and it's important that it remains an affordable treat.

"The end of the duty escalator on wine and spirits is a welcome move, and all credit goes to the trade bodies that co-ordinated the campaign to persuade the Treasury of its merits. We've invested significantly in both our cocktail range and wine lists over the past year, supported by staff training, and an end to above inflation increases in duty means we can expect to continue to see the benefits in terms of increased sales."

"The further significant increase in the income tax threshold to £10,500 next year is also a welcome development. Both our customers and our employees will see the benefits of the increase in the threshold to £10,000 in their April pay packets, and the trade can expect to benefit from a significant feelgood factor."

ES Group (Edward Symmons LLP, Storeys Edward Symmons and Aaron)

"The chancellor didn't disappoint the business rates profession today. We expected nothing significant in the 2014 Budget and that's what he delivered, nothing significant! The chancellor announced an extension to the business rates relief in enterprise zones for a further three years. The regret is that Government just don't get it and have missed another opportunity to redeem themselves with the majority of UK business ratepayers.

"Business rates for most are going to be higher than they should be because Government postponed the next revaluation from 2015 to 2017. Rates bills after 2015 will continue to be based on 2008 rents before in many cases they then fell off the end of a cliff. If the revaluation had gone ahead in 2015, as statute laid out, then business rates bills would be based on 2013 rents which would reflect what is happening in the real world."

Julian Grocock, chief executive of the Society of Independent Brewers (SIBA)

"SIBA applauds the chancellor's decision to take another penny off the pint, following last year's historic decision to scrap the unpopular escalator. It is good to see that this Government believes in providing long-term support for the British brewing and pubs industry.

"SIBA's Budget submission to the Treasury this year was based on the very positive impact of the 2013 duty cut on the local brewing industry. Our members now feel more confident about the long-term prospects for their breweries, and are investing in them by buying new equipment, recruiting new staff or opening new pubs."

Mike Benner, CAMRA chief executive

"CAMRA is delighted to see the chancellor implementing an unprecedented second consecutive cut of a penny in beer duty. This is not only about keeping the price of a pint affordable in British pubs but helping an industry which has been in overall decline continue on its long road to recovery. CAMRA cares greatly about the future of the Great British pub and it is clear from this Budget announcement that the Government do too.

"Keeping the price of a pint affordable is vital for the long-term health of the pub sector and CAMRA would hope this latest vote of confidence in British pubs will go some way to slowing the rate of closures, by encouraging more people to make use of their local this summer.

"No doubt many of CAMRA's 160,000 members will be raising a glass to the chancellor this evening to toast another brilliant Budget for British beer drinkers."

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