Budget 2013: Chancellor George Osborne scraps beer duty escalator and cuts beer duty by 1p

The Chancellor today has scrapped the beer duty escalator after heavy lobbying by both the industry and The Sun Newspaper.

The beer duty escalator, which was introduced in 2008 by Chancellor Alastair Darling, puts up the price of a pint by 2% above inflation every year, which has resulted in a 42% tax hike since 2008.

Osborne said: "We will now scrap the beer duty escalator altogether. And instead of the 3p rise in beer duty tax planned for this year by the previous Government I am cancelling it altogether.

"I am going to go one step further and cut beer duty by 1p.

"We are taking a penny off a pint."

He added: "The sad fact is we have lost 10,000 pubs over the last decade.

"I intend to maintain the planned rise for all alcohol duties with the exception of beer."

He praised the work of All-Party Parliamentary Group chairman and MP for Burton Andrew Griffiths for being "a committed champion of the brewing industry".