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Beer duty escalator leaves £150m 'black hole'

The Treasury is facing a £150 million 'black hole' in the Budget this year due to increases in beer tax, according to the British Beer & Pub Association (BBPA).

Thirty-nine of the brewing and pub industry's most senior executives have written a letter to The Times, calling for a change in policy.

According to the group, 42% tax hikes imposed on British beer drinkers since 2008, coupled with "wayward estimates" of what the tax rises will raise, have led to the shortfall in revenues this year.

"Last year's tax increase was expected to yield an additional £100 million. However, the Treasury's own figures show it has seen declining revenues, estimated to be down £50 million by the end of the year," the letter says.

"This unpopular policy will therefore have left a £150 million black hole in the Treasury's accounts and cost 5,000 jobs, whilst making a pint in the pub an unaffordable luxury for many more people."

The industry is calling for the scrapping of the escalator in the Budget on March 20, a move which, according to the BBPA, would not hit the Treasury's bottom line.

Those who have signed, led by Jonathan Neame, chairman of the BBPA and chief executive of Kent brewer Shepherd Neame, said that a freeze is "essential to kick start growth in the thousands of enterprises" throughout the brewing and pub supply chain.

"It is time to call time on the damaging beer duty escalator," the letter concludes.

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