Budget measures 'piling misery on pubs'

Campaign groups today slammed the Government for "piling misery" on struggling pubs.

The Chancellor announced duty on beer, wine and spirits will increase as planned from midnight on Sunday. Alcohol duties will also increase by 2% above inflation for two further years from 2013.

Tax on cider will increase by 10% above inflation from midnight on Sunday.

British Beer and Pub Association chief executive Brigid Simmonds said: "This latest beer tax hike piles on the misery for Britain's hard-pressed pubs and beer lovers. It is also a snub to voters, who by a majority of two to one wanted the Chancellor to scrap the beer tax escalator.

"Since 2008, beer tax has increased by an eye-watering 26% - a £761 million tax rise - and we have seen the loss of 4,000 pubs and over 40,000 jobs up and down the country. Beer sales are down £650m in the last year alone."

She added: "The Chancellor's claims that this is a Budget for investment and growth are hollow, considering he's just hit the beer and pub sector with a £161 million tax rise. The extension of the tax escalator for an extra two years also means more pain. Recently, there had been some signs of improvement in our industry but this recovery will be threatened by Mr Darling's tax rise, which is putting hundreds more pubs and thousands more jobs at risk."

Campaign for Real Ale (Camra) chief executive Mike Benner said: "Today's Budget is a charter for the large supermarkets who irresponsibly promote alcohol as a loss leader at the expense of our nation's community pubs, real ale and responsible pub goers.

"Today's duty increase has stamped down on the survival hopes of community pubs across the UK. This is a further tax raid on responsible beer drinkers and community pubs. It is however a tax raid that will yield little extra money for the Government as any extra beer duty will be outweighed by job losses, pub closures and reduced business taxes."

However, the Government won limited praise from health groups for raising tobacco duty by 1% above inflation and then increasing it by 2% in real terms each year until 2014.

Action on Smoking and Health (Ash) chief executive Deborah Arnott said: "The 15p rise in tobacco tax will encourage some adults to quit but is unlikely to have as strong an impact as a price rise of 5% or more above inflation would have had.

"However, we are encouraged by the commitment to raise tobacco taxes in future years and urge whichever party that wins the general election to adopt this strategy. Raising the price of tobacco is one of the most effective ways of reducing smoking."

Tobacco Manufacturers' Association chief executive Christopher Ogden said: "On January 1 the Government imposed the largest tax increase on tobacco products in ten years and now, less than three months later, taxes are to rise again.

"We question why Treasury would impose a substantial increase in such a short period, when latest HM Revenue & Customs figures show that up to 24% of the cigarette market and 63% of the handrolling market still avoids UK duty, costing the Treasury as much as £11 million per day in lost revenue.

"Today's announcement will only provide further stimulus to those who seek to profit from the illicit trade in tobacco."