Boateng rules out cut in duty

Lower duty rate will not stop smuggling, says new C&E minister

Trade campaigners have hit out at new Customs & Excise chief Paul Boateng after he ruled out a cut in beer duty.

The newly appointed Customs & Excise minister told thePublican.com he did not believe that the solution to the problem of bootlegging was to cut duty, claiming the Government has no intention of cutting the rate.

This has angered trade campaigners who have been urging the Government to address the issue for many years.

They claim the difference in duty between the UK and neighbouring France has led to the massive growth in cross-Channel trade and has encouraged criminal gangs to turn to smuggling.

But Mr Boateng said lowering duty was not an option. "It isn't the level of duty that causes smuggling," he said. "It's criminals that cause smuggling. Duty pays for schools and hospitals and we will not be reducing it."

Stuart Neame, vice-chairman of Kent brewer Shepherd Neame, said: "If he thinks it is not the duty rates that are affecting this then he is out of step with a lot of people on this issue.

"Obviously the minister is new to his job - but I am disappointed he has come to this conclusion so quickly before looking at all the arguments put forward."

Mr Neame has been leading trade efforts to convince the Government to cut duty, and last year released the results of an investigation into the problem which showed the economics of a duty cut would not necessarily cost the Government any more.

Smuggling is estimated to cost the industry £150m every year and has contributed to the closure of many rural pubs.

Mike Benner, head of campaigns at the Campaign for Real Ale, said: "I am amazed he has taken such a simplistic view. Criminals exploit the opportunity to make a profit and the very fact that there is such a large duty differential between the UK and France gives them that opportunity.

"It sounds like a definite no when the Treasury has been telling us year after year that it is looking into the issue."

Georgina Wald, spokeswoman for the British Institute of Innkeeping (BII), said: "It is interesting to see Mr Boateng does not think the duty rate causes the problem when all other research shows it does."

The BII last year released a report showing bootlegged booze was being sold to children as young as seven.

Rob Hayward, chief executive of the Brewers and Licensed Retailers Association, said he would be requesting a meeting with the minister.

Mr Boateng said he would be announcing a strategy to tackle the issue of bootlegged alcohol, adding that £209m had been invested in clamping down on smuggling, which will pay for an extra 1,000 customs officers as well as x-ray scanners and increased publicity.

The trade welcomed a decision this year by Chancellor Gordon Brown to freeze duty as a positive step towards a cut.

But Mr Boateng's comments may have undermined this optimism.

Mr Neame said: "I regard the decision not to put up duty as a huge policy change but I would be an optimist if I thought a cut was on the cards. We need to review the campaign and start pushing ministers again."

Related stories:

New strategy to tackle bootlegging (29 June, 2001)

With licensing reform being dealt blow by the government, we take a look at the options open left to the trade.Back to square one for licensing reform (04 July, 2001)