Treasury’s beer duty plans will do nothing to help British pubs

Nik Darlington 7.49am

It’s culture week at Egremont, and what else finer an example of British culture than the simple, honest public house?

There is a campaign underway in Parliament to get the Government to abandon the beer duty escalator in the forthcoming Budget on 23rd March.

An Early Day Motion has been tabled by Andrew Griffiths, the Tory MP for Burton & Uttoxeter (home to the influential ‘Burtonisation’ brewing technique), which urges ministers to relieve financial pressures on a struggling industry (twenty-nine pubs close each week) that sustains nearly one million UK jobs. It is thought that the escalator, which would add an extra five pence per pint, could cost 10,000 jobs and a subsequent reduction in sales cost the Treasury £40 million.

Last year, George Osborne eased some of the strain by reversing Labour’s increase in cider duty (Labour MPs are few and far between in the West Country) and avoiding any greater rate of increase in alcohol duty. This was a positive move and a sign that the Conservative party was holding to its pre-election campaign to ‘Save the Great British Pub’. Since then, the Treasury has been conducting a review of alcohol taxation. Included in this is minimum alcohol pricing, banning outlets from selling drinks for less than their tax. It is hoped that this will stop the use of alcohol as a loss-leader, a tactic that supermarkets and other retailers employ to drive footfall and which encourages cheaper drinking in the home, instead of the pub.

So far, so sound for pubs. Another Treasury commitment is to introduce a new additional duty on high strength beers over 7.5% ABV and a reduced rate on beers of 2.8% ABV or lower. As a headline, it looks impressive: tackle excessive consumption of highly alcoholic drinks while protecting responsible drinkers of the sensible British pint.

Think again. Visit your standard local and scan the handpumps: how many of them are over 7.5% and under 2.8%? The answer, in all liklehood, is none.

In my home town, Richmond, we have a number of excellent pubs, the majority of which are divvied up between Young’s and Fuller’s. Young’s beers range in strength from their Ordinary Bitter (3.7%), through London Gold (4.0%) and Special London Ale (a strong 6.4%). Even their bottled Old Nick, a barley wine at 7.2%, doesn’t make George Osborne’s high strength grade. Similarly, Fuller’s regular range comprises one of my favourites, Chiswick (3.5%), London Pride (4.1%), ESB (5.5%) and Bengal Lancer (5.3%). Some, such as the barley wine Golden Pride (8.3%), go over the limit but it is an extreme rarity.

Your typical premium lagers like Stella Artois (5.0%), Heineken (5.0%), Carling (4.0%), Fosters (4.0%) and Kronenbourg 1664 (5.5%) also sit within the range. I cannot think of any drink - beer, lager or cider - at less than 2.8% apart from a non-alcoholic beer like Beck’s Blue.

So in order to find a drink that is covered by the Treasury’s new duty scale, you have to go to the specialist saloons that serve bottles of knock-your-socks off Trappiste beers from Belgian. They are marvellous watering holes but your ‘Great British Pub’ they certainly are not.

What this all amounts to is a policy that on the surface looks tough on irresponsible heavy drinking whilst being encouraging to the downtrodden traditional British boozer, but is actually a typically disingenuous sleight of Treasury arithmetic. Almost all beer sold in pubs will be unaffected by the new duty scales.

The worst part of it is the weaker rating, which is set far too low to be anything helpful to drinkers and publicans. A better measure would be that of an ‘ordinary’ pint of beer, such as something around 4% ABV. Of course, the Treasury doesn’t want to count ‘ordinary’ pints in a lower duty rating because it would cost a lot more in foregone tax revenue.

Even a focus on 4% ABV is misleading because it still does nothing about excessive drinking and anti-social behaviour. Go into any medium-sized town centre on a Saturday night and round up the rowdiest revellers. Ask them what they have been drinking. It doesn’t take a genius to guess that they are more likely to have been drinking Fosters or Carling (both 4%) than Fuller’s Special London Ale (6.4%) or Golden Pride (8.3%).

The Chancellor is not giving anything else away until the Budget but I am informed that ministers are considering all options, including the progressive beer duty. Minimum alcohol pricing is the right step towards reversing the increasing trend of drinking at home, although some doctors claim that the base price is too low.

On beer duty, however, it appears pubs will have to dig into their own pockets again for the next round. The Treasury is certainly not buying it.