Budget sees beer duty cut and scrapping of alcohol duty escalator
Beer duty is to be cut by a penny for the second year in a row, it was announced today by Chancellor George Osborne in his 2014 Budget.
In a Budget that he said was for "the makers, the doers and the savers", Osborne said he recognised that a cut in beer duties would help to save pubs and promote employment.
He also announced a freeze in duty on whisky - in a move clearly designed to unsettle the campaign for Scottish independence - and a freeze on ordinary cider, which was designed to help businesses hit by the flooding and severe winter weather.
Meanwhile, the alcohol duty escalator, which saw annual above-inflation rises on alcohol and was unpopular both with drinkers and pub and restaurant businesses, has been scrapped altogether. Duty will now rise in line with inflation.
The news came as Osborne unveiled the Office of Budget Responsibility's revised growth forecast for the UK economy, which now stands at 2.7% for 2014. It will drop slightly to 2.3% in 2015, and is forecast to be 2.6% in both 2016 and 2017, and 2.5% in 2018.
Other significant moves for the hospitality industry included:
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
Commenting on the beer duty cut, Brigid Simmonds, BBPA chief executive, said: "This is fantastic news, and George Osborne is again the toast of Britain's brewers, pubs and pubgoers. It will protect over 7,000 jobs over two years, mostly jobs of younger people in Britain's pubs.
"It also shows that the government has understood our case, that taxes on British beer had become far too high, and action was long overdue.
"I hope this becomes a trend in future budgets for this British-made, lower-strength drink."
Nigel Wright, chief operating officer of managed pub and bar group TCG, said: "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."
